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Month: December 2017

What Should Bitcoin Be Worth?

The cryptocurrency feeding frenzy continues as you can now trade bitcoin futures. So much has been written about how bitcoin trading is like the tulip bulb frenzy in Holland centuries ago. But those who believe in bitcoin believe that the cryptocurrency will eventually replace currencies like the dollar, euro and yen. If you are interested in making money in cryptocurrencies or their futures contracts you need to have a basis on which to make your decisions. The question is what should bitcoin be worth? Investopedia poses the question, why do bitcoins have value. Currency also provides a universal measurement for accounting purposes. For instance, without currency, it is difficult to compare companies that sell different goods. Currency is used as a store of value, which makes saving, investing and banking easier. Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status and only accept taxes through them. Bitcoins do not have value as a physical commodity like gold and are not widely accepted as legal tender like dollars. Bitcoin has value to those who by them for the following reasons. There are buyers and sellers of bitcoin making it possible to buy bitcoins with dollars and to buy dollars with bitcoins. For those in the bitcoin world bitcoin is an...

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Could You Be a Bitcoin Billionaire?

Bitcoin just keeps going up despite repeated comparisons to the Dutch tulip bulb mania and crash centuries ago. Now, according to the news, there are two bitcoin billionaires, the Winklevoss twins. These guys successfully sued Marc Zuckerberg for $64 million claiming that he stole the idea for Facebook from Harvard Connection, of which they were co-founders. That is where the money came from to buy bitcoins. Business Insider notes the billionaire status of the Winklevoss boys as bitcoin goes above $11,500. Bitcoin’s rise comes amid continued interest in the digital currency from both ordinary investors and institutions. Last week it emerged that exchange operator Nasdaq could follow rival CME Group in launching bitcoin future contracts next year, a sign that professional investors are increasingly taking the asset seriously. Former Olympic rowers Cameron and Tyler Winklevoss disclosed in 2013 that they owned $11 million worth of bitcoin. The cryptocurrencies meteoric rise since then – it has risen over 1,000% this year alone – has propelled that investment to over $1 billion, according to the Telegraph. Could you be a bitcoin billionaire? First, it helps to start with a few million and then you need to go back in time to at least before the start of 2017 for the most recent impressive run up. But people are still putting money into bitcoin so it would appear that folks still expect...

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