Bitcoin in the world of finance
Meet Eric Finman. He started buying Bitcoin in 2011 at $ 12 when he was only 12 years old. The teenager used a $ 1000 gift from his grandmother. In June, Finman owned approximately 400 cryptocurrencies, and his fortune exceeded $ 1 million.
There are many such stories of crypto success, and bitcoins have already come to the attention of well-known investment structures. In July, the Rothschild Investment Corporation fund acquired securities of the Bitcoin Investment Trust (GBTC) in the amount of $ 210 thousand.
JP Morgan CEO Jamie Dimon compared Bitcoin to medieval tulip rush. Meanwhile, The Wall Street Journal reported, citing informed sources, that Goldman Sachs is preparing to enter the crypto market. The GS press service noted the interest of clients in digital currencies and the bank’s readiness to satisfy their requests. But they also added: “When people think about [Bitcoin] it seems like nothing more than money laundering or just something for illegal online activities.” (Source – WSJ). We understand there is some misunderstanding regarding this point as we will explain below. We believe today investors must be careful not go overboard with purchasing Bitcoins because you can easily lose them due these rumors concerning Bitstamp and Coinbase. Let us make sure no mistake on how banks deal bitcoin trading before anyone buys your tokens!
What is Bitcoin ?
Digital currency, exists in electronic form, operates on the basis of blockchain technology. It is based on mathematics, not real assets (in theory, the emission of central banks is backed by gold). Created by computer mining and used as a means of electronic payment.
In 2008, a man or a group of people under the pseudonym Satoshi Nakamoto published a file describing the protocol and how the payment system works. In 2009, Nakamoto finished developing the protocol and published the client program code. The Bitcoin network was launched.
The number of bitcoins is limited to 21 million. In October, the number of BTC in circulation was about 16.6 million. In this case, the cryptocurrency is divisible into parts, the smallest is called “satoshi” (1 bitcoin includes a hundred million satoshi).
Bitcoins are now considered a potential competitor to traditional (fiat) currencies. We may have “new gold” in front of us….and we also need that money for things which matter: pensions, student loans etc …
In Russia, there is no clear position on this topic, legislation is being developed. One of the Russian exchanges plans to admit cryptocurrency to trading, said earlier the Deputy Chairman of the Bank of Russia Sergei Shvetsov. “Now there is a project of one of the Russian exchanges to admit cryptocurrency for trading on its market. There is a discussion – whether it is a product or not, ”he said during a speech at the St. Petersburg International Economic Forum.
At present such operations in other countries are done through exchange markets provided by banks and financial institutions rather than issuing shares under any name. The reason behind banning coin sale: “We don’t want people to be involved in illegal activity”, explained Sergey Kostov, director-general with State Duma’s Public Administration Committee (PAC). Other participants indicated that they would allow them if their members were interested. Some believe Bitcoin will become easier and more popular due time; others think crypto can help decrease government spending as well