In between the calls of bubble, digital currency called bitcoins with the worth of over $2 billion now passes around on the internet-amount which is more than the total value of all the currency stock in countries such as Guinea, Montenegro and 40 others.
Now the question is that what is “bitcoin” and what purposes do people use it for?
Bitcoins aren’t issued by government or any private company, unlike the traditional currency.
In fact, such currency is run by such a computer code which allot new bitcoins according to a definite rate to the people devoting web servers in order to cause the running of code to continue. Bitcoins then are sold and bought online for standard U.S dollars.
BitPay.com’s CEO, Tony Gallippi says that people buying the bitboin is equivalent to buying and putting it under mattress.
These days, Bitcoin has much demand and each bitcoin sells at above US $190, which the bitcoin insiders think is due to the events in world which have served to shake the confidence in currency issued by government.
Tony Gallippi also says that because of what’s going on in Cyprus and Europe, people are trying to pull their money out of banks there that enables the businesses to accept bitcoins easily as a mode of payment, told by FocNews.com.
In Cyprus, it is in consideration by the government to take a percentage out of bank accounts of all citizens in order to solve the country’s own fiscal woes. This has caused Cypriots and many other Europeans to be apprehensive that the same will happen to them so they are taking out their money from the banks.
As Gallippi said that this is the reason they buy the gold and then put it under their mattress.
He also added that demand is also increased because U.S. regulators just issued official guidelines meant for the digital and private currencies, last week. Before the regulations were issued, the currencies’ legal status was uncertain.
Further, Gallippi said that now people can see that it’s not illegal and that it’s not banned.
The companies exchanging the digital bitcoin for the real money would’ve to act in accordance with the regulations similar to those of the exchangers for traditional currency‒e.g. they should confirm the identity of those exchanging the money for these bitcoins and also report the significant transactions to government.
However, use of bitcoins for the purchase of goods is particularly exempted.