(FOX 11) - When you reach into your wallet and pull out a dollar-- that money is secured by the United States government.
That's the way currency works all over the world. But that's the past-- the future may be digital currency or "Bitcoin".
At the end of 2017, many people bought expensive items like Lamborghinis, and they didn’t spend a dime. That’s because the value of Bitcoin was rising at an alarming rate, and people took the perfect opportunity at the time to cash out to buy expensive products that were unattainable in the past.
Bitcoin is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. It’s not a physical currency, and only lives online.
The price of Bitcoin has gone from pennies in 2009 to as high as 19,843 per coin on December 17, 2017. In fact, the value of Bitcoin increased in value 13-fold in 2017 alone. Right now the price of Bitcoin has dropped quite a bit since its all-time high. The current value as of this writing is $8,444 per coin.
Some people are referring to the Bitcoin boom as ‘the digital gold rush, hoping to get 15-20 times the return they put into it over the next few years. But unlike the dollar, Bitcoin is not government backed, and that’s why naysayers pan cryptocurrency, and that’s also why Bitcoin buyers love it.
The underlying technology behind Bitcoin is what’s called blockchain – a digital ledger in which transactions made are recorded chronologically and publicly, and it’s done quickly and securely. This distributed ledger technology (DLT) is appearing in a variety of commercial applications today. Experts believe blockchaining is what will propel cryptocurrency from curiosity into everyday use.
Even though the value of Bitcoin has trended down, the interest in cryptocurrency has remained steady. The recent Crypto Invest Summit at the LA Convention Center a couple weeks ago was sold out, as people are talking more than just Bitcoin; there are other cryptocurrencies such as Litecoin, Ethereum, Zcash, Dash, Ripple, Monero, and The Bottom Line -- just to name a few. There are even Bitcoin ATMs and mobile banking apps like Square Cash that can convert Bitcoins to cash.
If you’re interested in getting into the cryptocurrency game, most investors buy and sell on an exchange like Coinbase or Kraken, and there are mobile apps that can track the value in real time. Some people buy fractions of fractions of Bitcoin, such as $20 worth of Bitcoin and they see where it goes as an investment.
But before you start feeding your retirement fund into a Bitcoin ATM, USC’s Director of Technology Commercialization recommends you pretty much stay away from it and says you have to treat it like gambling.