Even though Bitcoin’s all-time high recently crashed, some are continuing to defend the digital currency that has seen a recent spike in popularity and public awareness. In fact, the unregulated currency, which has been called a “Libertarian fantasy,” is actually accepted as a form of donation by some affiliating themselves with the Libertarian party.
As the Atlantic Wire pointed out, Libertarian candidates for state senate in North Dakota and Vermont began accepting Bitcoins in the fall of 2012. More recently, the Libertarian Party of Canada began accepting the digital tender in March. The Libertarian Party of Canada’s press release regarding its new form of donations stated:
The most significant advantages of Bitcoin are that the amount of Bitcoin is finite, and the software is open source (meaning anyone can read and understand exactly how the software works). Consequently, the amount of Bitcoin cannot be expanded –all current day government currencies are expanding their currency. Expanding currency, also called ‘quantitative easing’ or ‘inflation’ is the worst way that government makes money – the other two are through taxes and borrowing. Inflation hurts lower income families the most. The Bank of Canada is continually expanding the supply of Canadian dollars and the Canadian dollar is continually losing value. As the dollar is devalued, the price of goods and services tend to go up, resulting in an insidious tax on the productive working citizen.
Bitcoin is an option that Canadians should be free to use in financial exchanges, free from all governmental regulatory meddling.
One caveat to donating via Bitcoin in Canada is that it is considered the same as a cash donation and based on current laws, only a maximum of $20 Canadian dollars can be donated in this fashion.
As of Friday morning, according to Mt Gox, Bitcoin was valued at just around $80 per Bitcoin. This is a sharp fall from the high of $266 it saw earlier in the week and its high around $94 last week. On Thursday due to fluctuations, Tokyo-based Mt. Gox, temporarily suspended trading for what it described as a 12-hour “market cooldown.”
What many want to know at this point is if Bitcoin will survive or sustain some of the popularity it has seen within the last couple months.
“At this point I would say yes, since it has before,”Chief Market Strategist for the ConvergEx Group Nicholas Colas wrote in an email to the Associated Press. But he noted that, unlike previous oscillations, Thursday’s collapse was taking place in the full glare of international media attention.
“A lot more people know about Bitcoin than during the prior problems,” he said.
For Colas, the most important thing to keep in mind was that Bitcoins suffer from the same weakness as any other form of money. If people increasingly believe they’re not worth anything, then they’re not worth anything – no matter how clever the currency’s design.
“The future of Bitcoin is, like all currencies, going to come down to trust,” he said.
And although Bitcoin ownership is largely anonymous — that’s much of the appeal to users — a famous set of entrepreneurs recently came out stating they own $11 million worth of the digital currency, as of Thursday morning.
The Winklevoss twins, Cameron and Tyler, who are famous for their row with Mark Zuckerberg over who truly founded Facebook, have been mining Bitcoins since the summer and, according to the New York Times, have one of the largest portfolios of the money.
As owners of a significant stake in the $1.3 billion market (again this was as of Thursday), the Winklevoss twins defend the recent drop, like other Bitcoin believers, as being expected growing pains.
“People say it’s a Ponzi scheme, it’s a bubble,” Cameron Winklevoss told the Times. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”
Tyler Winklevoss added that in the four years since Bitcoin became official — it was launched as an idea in the 1990s and officially established in 2009 — “it has yet to be discredited.” But he admitted, “We could be totally wrong, but we are curious to see this play out a lot more.”
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The Associated Press contributed to this report.