The virtual money reached one million dollar. Based on the number of BTC in flow, the value of Bitcoin reached a rate of $0.50 per BTC.
A controversy arose when Silk Road, an illegal drug distributor was established. They used bitcoin as a way to anonymously buy and sell drugs online.
For the first time, BTC reached parity with the US$ and in June the same year, Bitcoin wallet had an equivalent value of $31 which gave it a market capital of $206M.
The first bitcoin theft was reported where Bitcoin Forum founder Allinvain claimed to have lost 25,000 bitcoins from his BTC wallet. 25k BTC equals to $375,000 at that time. Also, in the same month, a major security flaw was seen where BTC value go from $17.51/BTC to $0.01/BTC.
FINCEN or the US Financial Crimes Enforcement Network issued the world’s first regulation for BTC using a guidance report for individuals who administers, exchanges or uses bitcoins. This had caused the start of the ongoing debate on how to best regulate the virtual money.
Also, in the same month BTC’s market capital reached 1 billion dollars.
In a case against Trendon Shavers, tagged as ‘Bernie Madoff’ of bitcoin, Federal Judge Mazzant noted hat the virtual money is clearly useful as money in buying goods and services. Bloomberg started trying bitcoins on its terminal though there are other ticket alternatives, the endorsement added more institutional legitimacy to Bitcoin.
Bitcoin wallet US$ rate increased to $700 as the US Senate had its first hearings regarding digital currency. Ben Bernake, the Federal Reserve chairman, gave his blessing to BTC. He noted in his letter to the government affairs committee and Senate homeland security that bitcoin wallet may hold great promise especially if it will raise a faster and more secure and efficient payment system.
Central bank in china did not permit financial institutions to handle BTC transactions. The ban was implemented when the People’s Bank of China said that BTC is not a real currency and is not legal compared to fiat money. The ban sees a risk of bitcoin to China’s financial stability and capitalisation controls. But today, China is the biggest bitcoin trader with over 80% of the world’s bitcoin transactions happening in china.
Bitcoin regaining credibility and traction – January 2014
Elliptic, a Bitcoin storage service provider, launched the first bitcoin storage insurance service for business clients. Bitcoins stored in Elliptic are insured by Fortune 100, an insurance company, and are held in full reserve. Which means, Elliptic does not use their clients’ bitcoins for reinvestments, instead they keep them securely in a cold deep storage.
The first online retailer to accept bitcoin payments in the US was Overstock.com and is still one of the biggest companies today that embrace BTC.
Bitcoin was classified as private assets by HMRC which means that mining and trading of bitcoin is exempted to VAT. This treatment to bitcoin wallet has been one of the most important and most progressive. UK government played an important role to bitcoin taxation for its comprehensive and forward thinking towards it.
When Silk Road, the illegal online market that sells illicit drugs, seized by the US government, the exploited 29,000 bitcoins was then auctioned. This case gave an understanding on the potential uses of bitcoins to the BTC community. Also, the seizure and the bitcoin auction has remained Bitcoin’s legitimacy. This means that bitcoin will nevee be considered as the currency for crimibals. Although bitcoin remains to gave anonymous transactions, user’s identity can often still be established.
The New York State Financial Services Department released the first draft of its proposed regulation for digital currencies. Also, the European Banking Authority had their opinion that virtual currency exchanges should comply requirements on AML or Anti-money laundering and Counter-terrorist financing.
Also, in the same month, Global Advisors Bitcoin Investment Fund (GABI) launched the world’s first Investment fund for BTC.
George Osborne Exchequer’s Chancellor showed support to bitcoin by purchasing £20 worth of BTC. He also anniunced that HM Treasury calls for Information in digital currencies, giving bitcoin businesses the chance to give comments on the benefits and risks and the possibility to influence government policy in the future.
Microsoft started accepting BTC payments. This paved the way for powerful integration on one of the biggest leaders in technology.
The NYSE (New York Stock Exchange) invested on Coinbase’s $75 million funding round aiming to reach the new asset class with security, transparency and confidence to BTC.
Bitcoin in the future
Bitcoin continues to go its way to a widespread and legitimate adoption by major institutions by having solid regulations. New York’s BitLicense lately has been the world’s first digital currency regulatory jurisdiction. European Banking Authority and European Central Bank have also released legalities and regulation of the industry by the EU to have more control on price changes.
Also, Bitcoin already made its way to the financial influences with HM Treasury’s reports regarding anti-money laundering (AML), consumer protection and standardisation for UK bitcoin companies. In result, more and more financial services will be engaged with the bitcoin technology.
How is Bitcoin being used
Bitcoin is a digital money. It is used to buy any products and services electronically. You can sign in an account from a number of bitcoin wallet services online such as Coinbase.com. There are three major ways to obtain bitcoins. First is by buying them from a bitcoin exchange. Secondly is by selling goods and services in exchange for them. Third is through bitcoin mining where you use a software to verify bitcoin transactions. Of course the simplest way is to buy them using fiat money.
In bitcoin transactions, the sender usually enters his bitcoin address to pay a certain amount of bitcoin and a private key. It depends upon the interface of the website you are visiting. Also there are companies now that offers ATM cards to let users buy items at real physical stores that accept bitcoin. The ATM card is linked to their bitcoin wallet account online. 2014 was already a great year for Bitcoin. You can go for freewallet Bitcoin wallet.
There is a lot of promise this virtual money can offer. If regulated properly and tightly, this could lead to more good things than what we expect for.