It was recently reported that the twin brothers who successfully sued Mark Zuckerberg for stealing the idea for Facebook have just become the first ever Bitcoin billionaires. Cameron and Tyler Winklevoss, both played by actor Armie Hammer in the movie “The Social Network,” bought in 2013 one percent of all currently mined Bitcoin for a price of $11 million – the money they earned from settling the lawsuit with Zuckerberg.
The digital cryptocurrency just surpassed $11,700 on Sunday after starting the year below $1,000 per digital token.
For those still not familiar with Bitcoin, it is the name of a cryptocurrency that offers lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies. Bitcoin is not a physical currency and is only kept on a public ledger in the cloud that is verified by a substantial amount of computing power. Cryptocurrencies are created through cryptographic algorithms that are maintained and confirmed in a process called mining, where a network of computers process and validate the transactions. Other notable cryptocurrencies in the market are Litecoin, Dogecoin, and Monero.
As of writing, the market cap for all Bitcoin in circulation exceeds over $200 billion.
How prevalent is cryptocurrency today?
The Australian government already recognized digital currency as a legal payment method. Even better, purchases done using digital currencies are exempt from the country’s Goods and Services Tax to avoid double taxation.
Japan, which also legitimized Bitcoin as a form of payment, is now expecting more than 20,000 merchants to accept Bitcoin payments. Meanwhile, businesses and some public organizations in Switzerland, Norway, and the Netherlands are joining the bandwagon.
Many brands are now accepting cryptocurrencies as payment as well. In America, online tech stores like Dell and Newegg have started to accept Bitcoins, while online travel agencies like Expedia.com and airlines like airBaltic accept Bitcoins as well.
What’s working against its favor?
Just like regular money, cryptocurrencies like Bitcoin are not immune to theft. $30,950,010 USDT (a cryptocurrency asset) was stolen from the Tether Treasury wallet on November 19, 2017. There are also cryptocurrency-mining malware that are designed to zombify botnets of computers to illegally mine cryptocurrencies.
Because cryptocurrencies unwittingly gave criminals in the cyberspace encouragement to engage in illegal activities due to its almost untraceable transaction process, governments across the globe are taking steps to stop malicious entities from abusing it. The UK and other European governments are planning to stage a crackdown on Bitcoin due to the rising concerns that the cryptocurrency is being utilized for money laundering and tax evasion. Because of the plans to regulate Bitcoin and other cryptocurrencies to align them with anti-money laundering and counter-terrorism financial legislation, traders will be obliged to reveal their identities, which will end the anonymity that has made the currency attractive for drug dealing and other illegal activities.
Bosses of big corporations denounced Bitcoin as a vehicle to commit fraud and other crimes. Vietnam and China already banned the use of cryptocurrencies, and it’s really no surprise as far as big corporations and banks are concerned. The use of cryptocurrencies allows people to trade directly with each other which renders the purpose of middlemen (banks, typically) useless.