Bitcoin is now available to buy online for a small fraction of what it was back in 2013, thanks to an uptick in demand by merchants and cryptocurrency enthusiasts alike.
Bitcoin was worth around $1,000 back in March, but its price jumped nearly 25% to over $8,000 this week.
This is due to the recent surge in interest in digital currencies and its subsequent price appreciation.
“I think people are getting really excited about cryptocurrencies,” explained Ryan Stinson, an associate professor at the College of Business and Marketing at the University of California, Berkeley.
Stinson said his research found that Bitcoin’s recent rally in popularity has been driven by consumers and businesses wanting to buy cryptocurrency in a safe and secure environment.
Stiner said Bitcoin’s popularity is particularly important for merchants because they don’t have the infrastructure to handle transactions that require more sophisticated security and encryption.
“It is very difficult for a merchant to get into Bitcoin,” he said.
“If you’re a small business, if you’re not a large business, it’s very difficult to get a bank account.”
Stinson, who previously worked at PayPal and Square, said businesses can’t afford to wait until they’re ready to accept Bitcoin.
He said he recently advised a company on how to set up a Bitcoin ATM, but the process can be complicated.
“A lot of businesses have never done anything like this before,” he added.
“They want to get in as soon as possible,” he continued.
“That means they need to make sure they are on the most secure software, they need a lot of security measures.”
The price of Bitcoin has surged so much this year that it has surpassed $10,000 for the first time, according to CoinMarketCap.com.
Bitcoin’s value has soared since the summer, with a recent surge that has put it at the forefront of a growing list of altcoins.
Bitcoin’s rise has caused concern among the Bitcoin community, who say its rapid price gains make it an attractive investment for speculators.
Bitcoin is also not regulated by any nation, making it a risky investment for governments to regulate.
But for some, the rise in price has made them eager to try out the digital currency.
“If Bitcoin is becoming more popular and people are more interested in buying it, I think that’s going to drive a lot more activity into it,” said Stinson.
“The more people are willing to invest in Bitcoin, the more there will be demand for it.”
While the value of Bitcoin’s digital currency may have been skyrocketing, many experts warn against using cryptocurrency to make large amounts of money.
“You’re not going to make a fortune out of Bitcoin,” said Ryan Stanton, an Associate Professor at the UC Berkeley School of Business.
“The biggest problem with Bitcoin right now is that it’s not secure.”
The Bitcoin blockchain, the ledger of transactions that record all the digital transactions on the internet, is designed to prevent fraud, allowing anyone with access to it to verify transactions, while also making it possible to securely store and spend digital currencies.
Stanton said people should not use Bitcoin to make purchases because it is not backed by a real currency.
He said the digital wallet apps like Bitcoin Dash, Litecoin, and Dogecoin are a great alternative for people who want to store their Bitcoins and make small purchases.
“When people are making large transactions using Bitcoin, there’s always a possibility that they’re going to lose their Bitcoins,” he explained.
“So, it is important to use Bitcoin if you want to make small transactions and don’t need to store the whole Bitcoin transaction.”