There’s no doubt that you’ve heard the saying that technology makes the world smaller. This is certainly true when it comes to international marketplaces, but that doesn’t mean that the way that business is run between nations has changed all that much. In reality, the system has just become much faster because of the instantaneous communication that computers give us. If you think about it, the way that business is conducted hasn’t changed a lot at all. The double entry system that most banks use to track their accounting practices when international exchanges are made dates back to the 14th century. Instead of ink and paper to regulate things, computers process the info today.
One other change is the sheer volume of money changing hands. There’s about $22 trillion that changes hands each day now, and banks are able to process these exchanges within the Forex and other markets because they control the converting of one currency to another. This is how Forex trading works, and it is how banks and businesses are able to interact with other countries.
The BitCoin is beginning to change this. It’s not considered an actual currency because it doesn’t have a home location. Instead, it acts more like a commodity, except it has proven to be very volatile and commodity exchanges are not picking it up for regulated trading. In reality, though, where it is accepted as payment, it acts just like a currency, but without borders. It is a currency that has value all over the world, and no exchange or Forex intermediary is needed. In essence, the BitCoin acts as a global currency. It eliminates a ton of work, simplifying the process considerably. There’s no need for third parties to monitor who owes what, but rather it is one scarce currency spread out over about 12 million people who currently have some of the digital currency to call their own.
The future of the BitCoin is uncertain. It has the potential to completely change how international business is done. It won’t happen in the near future, though. There is too much uncertainty here, and not enough people trust it. 12 million people sounds like a lot, but there are more than 7 billion people in the world that would need to use it. Technology is necessary for its use, immediately limiting the number of people that could possibly access it. However, the currency has survived its first several sets of growing pains, and this is a good sign. It shows that growth is possible, and even probable–once it finds a good settling point, that is.
Technical data is not going to be reliable on the BitCoin for some time to come. If you are trading it, be careful. It’s still too new to know how it will act. Instead, focus on sentimental and news trading, while keeping an eye on what fundamentals are available. Some binary options brokers do offer the BitCoin in comparison to other currencies right now, but for the most part, these are still novelty trades. Unless clear information comes forward, trading the BitCoin heavily over the short term (anything below a couple hours) is too risky to prove to be profitable long term. You can profit off of trading the news with this, though, and that’s where your focus should be if you have any interest in short term trading with the BitCoin.
The other issue is that there will be backlash if the BitCoin gets too big. Governments want to protect their economies and their currencies, and if the BitCoin proves to threaten any of those things, there will be crackdowns. These will have a negative influence on the price, so keep your attention on this aspect of the news, too.