Bitcoin claims to be a new and convenient form of money. However, the SEC has just ruled that it is a security. It's a debt instrument. As such, it can still function as money, but its use is far from convenient. It involves exchanges and electronic wallets. To be legally used, all transactions must be according to the rules and regulations of the SEC.
Pretty soon, the SEC will no doubt demand to know the details of every transaction. Why not? All transactions are stored on a public ledger. Tracing transactions back to the accounts used to purchase the Bitcoins in the first place is far from impossible. Demanding to know the identity of every person that ever bought a Bitcoin, or a fraction of one, is not any more unreasonable than a lot of other rules and regulation that the SEC is imposing on the world economy.
As a currency, Bitcoin in no doubt heading towards disaster. It was never very convenient as a means of exchange. With the new ruling by the SEC it's not going to get any better.
Bitcoin is a security backed by absolutely nothing. It will never deliver on its promise to become a convenient money, and there's nothing of substance backing it up. Yet, in the current insanity of financial markets, that's no reason for Bitcoin not to fetch ever-higher prices.
An asset with no practical use outside transactions
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