A South African banking and mobile expert believes the recent fluctuations in Bitcoin value further legitimise it as a currency.
The value of a Bitcoin dropped from around US$140 to US$129 last week after the controversial Silk Road website, which sold drugs and weapons to some buyers using the digital currency for payment, was shut down by the FBI after founder Ross William Ulbricht was arrested.
A regular criticism of Bitcoin is that it is predominantly used for illegal online activity because account holders can retain anonymity.
Duncan Arthur, an independent payments, mobile and African banking expert, told HumanIPO: “It’s behaving like a real currency. Look at movements of a state backed means of exchange if you don’t believe day-by-day fluctuations can be so dramatic.
“If a real country suddenly had a stream of revenue drop off, it’s currency would take a knock.”
HumanIPO reported in August Germany had become the first country to officially recognise the “borderless currency”, which had not yet been regulated by any government or supported by any central bank.
Arthur believes critics should ignore Bitcoin “at your own peril!” and is confident it could have a range of uses.
He added: “What’s interesting is that Bitcoin didn’t crash entirely. Either Bitcoin is a source of reserve where investors are in for the longer haul, enough people have built enough faith in its future as an alternative means of exchange or a mix of both.”