Bitcoin – from bizarre to bankable | Republic-Times

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Pictured is a Bitcoin kiosk located at Midwest Petroleum Phillips 66 in Colombia.

Bitcoin began to be produced electronically in 2009. Computer “cryptocurrency” has since become a global phenomenon.

While Bitcoin and other digital currencies remain a mystery to many, they have spawned a lucrative international industry and are now found in local convenience stores and grocery stores.

IGA stores in the area and three gas stations in Monroe County now have ATM-style kiosks that allow users to buy and sell different cryptocurrencies, including Bitcoin.

A cryptocurrency is a digital or virtual currency protected by computer cryptography, which makes it almost impossible to counterfeit or manipulate. Most transactions are done online, with purchases held in a “digital wallet”. Kiosks allow users to buy cryptocurrency through a secure network using cash or receiving cash from the machine when selling.

Craig Norrenberns, manager of IGA stores in Millstadt and Red Bud, told the Republic-Times that the machines were placed in stores through UNFI, IGA’s food distribution provider.

Norrenberns said UNFI has entered into a business deal to place the kiosks in the stores of the company’s customers. He explained that the process was similar to the location of the propane tank rental stations that can be found in many stores.

Norrenberg described the activity at the kiosks as “slower so far”.

Chris Rico of Sumbits, a St. Louis company that provides cryptocurrency machine services in Missouri, explained the benefits of using a “currency exchange kiosk” rather than a computer to buy and sell. cryptocurrencies.

One of the reasons for using the physical machine is speed. He said purchase transactions typically take less than an hour. Online cryptocurrency trading also requires “linkage approvals” and other barriers to fast transactions, according to Rico.

He also noted that a kiosk-based exchange carries less risk than its online counterpart. In a kiosk, users can sell or buy up to $ 500 worth of cryptocurrency using just a name and phone number. Rico explained that trading on the Internet often requires a wire transfer or other connection to a person’s financial information, which can be vulnerable to misuse.

Rico said the transaction fees associated with cryptocurrency kiosks, typically around 8%, are a trade-off between “privacy” and “convenience.” He also warned that like “what happens with everything” online, accounts are prone to hacking and scams.

For those who have secure crypto “wallets” and know how to avoid scams, Rico says Bitcoin itself can be a “valuable commodity in today’s monetary climate” and a “hedge against inflation.”

He explained that Bitcoin is on a “fixed schedule” which means that the number of Bitcoin that will eventually be produced, 21 million, will never increase and therefore will not lose value due to hyperinflation.

Government-issued legal tender, such as the U.S. dollar, can lose value or drive up the price of goods as more currency is released into the economy. For example, the increase in circulation of Federal Reserve banknotes (printed currency) between June 2019 and June 2020 was $ 226.3 billion, an increase of 35% from the previous year.

As with any investment, Bitcoin is not without risk.

Rico described it as an “asymmetric investment”, meaning that there is a “high chance” that the value will increase, and less chance that the value of Bitcoin will “stay the same or go down” and a “chance. even smaller that it goes to zero, ”or becomes completely worthless.

“The value (Bitcoin) increases as more people use it,” Rico explained.

With multi-billionaires like Elon Musk backing cryptocurrency and companies starting to invest their profits in Bitcoin, it doesn’t seem likely that the phenomenon will go away anytime soon.

There is still a lot of hesitation regarding cryptocurrency, as evidenced by volatile Bitcoin exchanges in recent weeks. Its uncertain nature and bizarre beginnings have led some investors to delay the purchase until it becomes a more stable asset.

In early 2009, a person known as Satoshi Nakamoto, whose true identity was never revealed, began to electronically “mine” Bitcoin’s first block.

Mining is the process by which a computer runs a program to verify data in each unique “block” of a cryptocurrency “mine” program. Once verified, a portion of a cryptocurrency is released from the “blockchain” and added to a ledger, the electronic means of accounting for the location and movement of the cryptocurrency.

The process of mining Bitcoin makes it almost impossible to steal anything using cryptocurrency, according to Rico.

Bitcoin itself was first used as a form of payment on black market websites and then became an easy way for enthusiasts to conduct financial transactions, but now it is a form of widely accepted currency.

In 2010, just over a year after mining began, it was used at a Papa John’s restaurant in Jacksonville, Fla., To purchase two large pizzas. Over a decade later, the construction of a “Bitcoin City” in El Salvador is planned using money from Bitcoin-backed bonds.

With the current price of a Bitcoin fluctuating between $ 55,000 and $ 60,000, the value of the nearly 19 million Bitcoins currently in circulation exceeds $ 1,000 billion.

Each Bitcoin can be divided into eight decimal places, so buyers and sellers don’t need tens of thousands of dollars to start investing. The smallest commercial unit is called a “Satoshi”, which Rico describes as the equivalent of a penny, although it is roughly equivalent to 0.000001 of a penny valued at $ 55. .

The prevalence of cryptocurrency use has caught the attention of lawmakers, who see its use as a way to avoid taxes, which has been one of the benefits for those who have used cryptocurrency. these last years.

A caveat from the recently signed Infrastructure Investments and Jobs Act is the taxation of Bitcoin. US Representative Mike Bost (R-Murphysboro) called the idea “weird”.

“By doing this, we are the only country to tax a part that you can instantly move overseas. So we won’t generate taxes on it, (the owners of Bitcoin) will move it, ”Bost explained.

“This is how you generate taxes on Bitcoin,” Bost continued. “When you liquefy Bitcoin, it gets reported to your bank account and then you have to report it through the IRS. So we were collecting taxes on it, but now they’re going to tax Bitcoin in a way that no other country has ever done and they think they’re going to stay here.

Regardless of how different governments around the world are tackling the challenge of traditional monetary systems, cryptocurrency is likely to exist in the future.

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