Some studies suggest that Bitcoin will pass for a profound standardization of coin trades in the next years. They compare current phase of Bitcoin with golden days of Wild West – promising, but missing too much yet. One strength of a cryptocurrency is value its users assign it – and some economists compare Bitcoin like gold or silver, even if its price isn’t so stable. But it’s a double-edged sword: that means that, without your audience’s confidence, a cryptocurrency can crumble. And some big players know how to use it in their favor. We had some troubles with miners and assayers – mainly in the first years and while mining cost keeps rising. This led to governmental oversight and the creation of centralized exchanges.
The Bitcoin dream has been to police its own community and remain beyond the physical scrutiny of any global government. But a security breach at Mt. Gox, a big Bitcoin exchange company, has exposed how far Bitcoin and other currencies are from finding this perfect, safe ecosystem. Such situation took off the sleep of many Bitcoin users – and not only those with deposits and wallets in Mt. Gox. But it’s really difficult if that big issue was really caused by a cyber security vulnerability. Despite this, most popular cryptocurrencies has shown great resilience – and it isn’t different with Bitcoin. This resilience could very well be just the boost needed to legitimize the currency and the lean towards governmental involvement that may actually help this fledgling store of value soar to its mainstream potential.
The timing of the Mt. Gox incident may prove to be a boon for the currency. Tera Group, a New Jersey organization, has planned and negotiated a bilateral agreement with CFTC to trade Bitcoins and other crypto coins through swap exchanges. The vast majority of commercial currency trading is done through swaps agreements which is why we follow the commercial traders in our own trading. A swap agreement is basically an insurance policy that provides a guaranteed value at a specific point in time to protect against currency fluctuations. For example, a company paying a variable rate of interest may swap its interest payments with another company that will then pay the first company a fixed rate. The swap markets are the superhighways of the financial industry. Crypto transactions cost a small fraction according to volumes processed. Therefore, the cost on the individual swap is small but the sheer volume of swaps processed makes it a huge revenue source for all of the major banks.
One of main challenges faced by Bitcoin is keeping or even increase its value, because it depends on value perceived by its users. Its creator, Satoshi Nakamoto, developed whole infrastructure aspect and gave your community a new way of purchasing, but when dealing with a “coin market”, it isn’t enough. Crypto-coin value depends heavily on its community.
Bitcoin is a global marketplace executing transactions on an electronic network. That sounds an awful lot like the forex markets. But, even if there are some troubles on the way with crypto transactions, it didn’t demotivate crypto users. However also “bitcoiners” wish some level of security in their transactions when buying or selling Bitcoins. Thus, some experts consider Bitcoin is becoming mature and, in a short future, we can see it in many local stores.