Digital Currencies legalized in California

http://johnrosenbaumlaw.com/2014/07/california-legalize-bitcoin/
Digital Currencies legalized in California
California has legalized the utilization of BitCoins as well as other digital currencies inside the state simply by taking away certain content inside California’s Corporations Code which prohibited use of “anything but lawful money of the United States.”
The switch represents a developing trend amid states to spellout digital currencies along with their validity as use for paying for products. Some noted that before signing this bill (AB 129) several currency forms were technically against the law, including “Amazon Coins” or “Starbucks Stars”.
The last weeks have observed other progress in direction of digital currency adoption, with industry juggernauts including NewEgg.com, 1-800-Flowers.com and Expedia subscribing to the BitCoin bandwagon by accepting the e-currency for payments. BitCoin is now so widely accepted, that a family has taken to the road on a BitCoin-oriented effort at living off the currency as exclusively as possible. At this point they have been fairly successful, being able to pay for gas, food and hotel by using BitCoin.
At this stage I am aware that merely a small portion of the reading audience truly is aware just what exactly BitCoin is. Sure it’s a trending expression many have heard often, but most have little idea as to the specifics.
Simply put, BitCoin is a peer-to-peer currency which holds no tangible value (as an example, the gold standard). Instead the worth of BitCoin is rooted entirely in the value that the market places on it. Currently, a single BitCoin is worth just under $650. It’s for this reason that generally transactions are carried out in fractions of a BitCoin, the most popular denomination being the “millicoin” (or rather, one 1/1000 of a BitCoin, about $0.64 at the time of writing this).
Lots of people are left scratching their heads at the point of this sort of system, or exactly why someone would put money into it when there are numerous viable options on the market for tangible investments. It’s a legitimate concern, and to answer the question it’s the possibility of huge profits.
Some great benefits of BitCoin are that each transaction is reasonably anonymous, that one could send money from one side of the world to the other with no accrued fees, and instantaneously. The currency transcends international borders, being utilized and traded in just about every country on the planet. It has no central system that can manipulate it (i.e. the Fed), instead the system is just as strong as each user.
Sounds great huh? Well for all the positive aspects, you can also find negatives. Without control the system is hugely erratic. There are currently 13,000,000 BitCoins in circulation. The most there may ever be is 21,000,000. This amount is fixed. Contrary to the number of dollars in the system, there cannot ever, by design be more than 21,000,000 BitCoins produced. But take into consideration that this number will be lower granted that BitCoins can be quite easily lost, not to ever be recovered. Of course, US Dollars can as well, though the difference is a new one can be printed, and everyone moves on with their life.
So, keeping that in mind, if BitCoins are to gain mainstream popularity their value is going to skyrocket. Excellent for those holding them, terrible for those not. One more problem with this is that there will be inherently a group of people whom have already been with BitCoin (back before the value was less than a dollar). These people hold a huge number of them, and anytime can flood the system and cause the value to plummet. This has happened, when from December 5 to December 7 the cost of a BitCoin dropped from a high of $1,140.00 per coin, to a low of $585.00.
The legitimization of electronic currencies in California and elsewhere is surely an exciting thing. How we will be completing financial transactions five or ten years from now is yet to be seen, but there is a good chance that the regulations we see addressing the matter now are a strong indication for things to come. Investors who take the time to understand the systems now, will see themselves at a great advantage if digital currencies ever become the law of the land.