Getting Involved in Bitcoins is Easy, How to Do It?

By Brett Martin |

Published 02/14 2014 07:11AM

Updated 02/14 2014 08:51AM

ST.LOUIS, Mo. -- The newest virtual currency, Bitcoins, are heating up in Missouri. Bitcoin is a currency that can be used across the globe universally. While it may be getting more and more popular, one economist says questions are rising from the uncertainties.  

Ken Cox is the founder of River City Mining in St. Louis and says he's earned his fair share by getting involved in bitcoin.

There are multiple ways of getting involved in the virtual world.

"There’s a lot of different avenues for Bitcoin. There’s the trading, mining, the storage. The best thing that I can think of would be any currency, the dollar or gold," says Ken. 

Dr. David Mitchell is the director of Bureau of Economic Research at Missouri State says it can not be compared to the dollar because it has no government regulating it.

"The problem with Bitcoin is one of credibility and its not backed by a government and its not backed by a precious metal," says Dr. Mitchell.

He says the only way for the Bitcoin to earn credibility is by people trusting it.

One of the biggest problems he’s seen is the value changes every minute. Since Bitcoin isn't regulated, the exchange rate can fluctuate drastically within hours and has a wide range of values.

Ken says when it first began people used Bitcoin like the stock market, now, its more like every day currency.

"We are through the batch of the Bitcoin millionaires who were mining the stuff when it was brand new."

Dr. Mitchell says its not being used enough though.

"One of the problems right now is that it is not traded enough to have a lot of the fluctuations be smooth, there's too much volatility."

Ken says, if more people get involved, it will level out and save money in the end and can help reduce debt.

"When you start living your life on Bitcoins, you live your life on Bitcoins. You can spend what you have, you can’t buy it and then charge it later."

Bitcoin has been involved in multiple investigations, mostly along the Silk Road. It is a website accused of drug trafficking. 

Recently, the Bitcoin Foundation Vice President, Charlie Shrem, was arrested and charged with money laundering in New York City.

Ken says the negative attention hit the Bitcoin market but he knows it’ll bounce back.

"I think in the long run as the authorities get a better grasp on what is going on to be able to track the people that are doing illegal activity is much simpler than us dollars."

Dr. Mitchell says the illegal uses and the few places accepting could hurt its growth.

"They have to be universally accepted. I have to believe that my employer can pay me in some currency and I can take that currency and use it to buy the goods and services that I want," says Dr. Mitchell.

Ken says if you do want to get involved, it is easy.

First, you would want to download an application or sign up for a coin base on the internet and create a virtual wallet. Next, you would connect your account using a credit card and begin converting dollars to Bitcoins.

"You are just going to buy Bitcoins like a stock, you are going to do that every month. You’ll set your budget to something that you can afford to risk in the market."

While we haven’t found any places in southwest Missouri that accept it but with more trust; both Ken and Dr. Mitchell think it could be the next form of cold, hard cash.

"Its evolving and its evolving quickly, and a lot of technology is being put behind it and a lot of smart people are trying to figure this out," says Ken.

"If people begin accepting it as a form of currency, then yeah, it would be a form of currency," says Dr. Mitchell.

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