If you don't know what bitcoins are, now might be the time to learn. They're actually a digital currency, unrecognized by all countries or banks. That's the draw of bitcoins, which are bought, sold and spent mostly online. It's traded outside of the realm of government.
Now, some people are trying to legitimize it. Cameron and Tyler Winklevoss filed a proposal Monday (July 1) to bring larger retailers and investors into the bitcoin world, the New York Times reports. If the name Winklevoss sounds familiar, it's because the twin brothers were a big part of the Facebook controversy that went on to become the movie "The Social Network."
They are looking to establish the Winklevoss Bitcoin Trust, in hopes of bridging bitcoins with the rest of the world. "The trust brings bitcoin to Main Street and mainstream investors to bitcoin," Tyler says, "It eliminates the friction of buying and reduces the risks associated with storing bitcoin while offering similar investment attributes to direct ownership."
As the Washington Post points out though, there are several problems that can arise from bitcoin investing. One of bigger ones is volatility in price. At the beginning of 2013, one bitcoin was worth $13. By April the price had jumped to $266 before dropping down to $50. Currently, one bitcoin sits at a price of about $90.
Whether the Winklevoss' trust fund gets approved or not, this could be simple the first step in a much larger picture. According to Carol Van Cleef, head of emerging-payments practices for the Patton Boggs law firm, "Digital currencies are not going away." She also believes that as bitcoin's popularity grows, financial products will begin adapting to it.
Photo/Video credit: Getty Images
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