Use Bitcoin in Real Life and Invest on It
Bitcoin is a cryptocurrency and payment system invited by Satoshi Nakamoto in 2009. The network of bitcoin is peer-to-peer which means users in the network could transfer bitcoin directly without intermedia. In 2017, bitcoin price was like a skyrocket and everyone talked about bitcoin. Investing on bitcoin is a popular topic. Besides, as of February 2015, there are more than 100,000 bitcoin-friendly vendors and merchants around the world. It seems we can live only use bitcoin without using notes, especially in NYC. Is this true? Before you really do it, there are several facts you should know. This is bitcoin data visualization app and feel free to play around it.
All datasets are from OpenDataSoft and the latest data is as of January 24,2018. For bitcoin map, although according to the Wiki, there are more than 100,000 venders accepting bitcoin, the dataset in OpenDataSoft only contains less than 20,000. Besides, more than 60% vendors don't have an explicit category which leads to inaccurate structure of vendors. For price chart, 14 price data of other cryptocurrencies is used to compare with bitcoin price. During the research, I found a website providing more comprehensive analytics for cryptocurrencies. Its data is day-to-day updated and articles on it sharing methods how they gather data and downsides of methods.
Features of App
- Real-time Transactions
Through bitcoin bubbles, users could have an understanding of bitcoin transactions based on real-time.
- Bitcoin Map
Users could use either CLUSTER or CIRCLE choice to view the bitcoin map.
CLUSTER allows users to see how many vendors in each area based on a certain time and categories.
CIRCLE shows vendors as little circles on the maps with different shades and users also could filter vendors based on vendors' categories and the date they accept bitcoins. Clicking on the single circle, users would get detailed information for vendors through a popup. For good-looking concern, the map doesn't go with legend. Because there are too many categories for vendors and each category corresponding to a unique shade. Popups would help if users want to get more information.
The pie chart on the map illustrates the proportion of each category. Since this chart is based on the time and categories users choose, it would change. Users would get the name of each proportion of chart if move the cursor on it.
- Cryptocurrencies Prices chart
The chart for cryptocurrencies prices allows users to compare prices among 15 digital currencies at the same time. Using the time bar below the charts, users could zoom-in to a certain period.
Facts We Should Know Before Using Bitcoin and Investing on It
- Transaction fees
Using bitcoin as notes is not free. Transaction fees are imposed by bitcoin rules. As mentioned above, the network is peer-to-peer and users in the network are incentivized to keep bitcoins instead of trading them too frequently because of security concern. How much do we pay. It is case by case and complicated. This article would give you an understanding how to calculate fees. Generally speaking, average transaction is $28. Someone on twitter claimed he paid $16 transaction fee to get $25 bitcoin.
- Tax Concern
The second issue there is using bitcoin in the U.S. Although we treat bitcoin as cryptocurrencies, IRS regards it as goods. Since bitcoin is goods, we would pay tax when we make gain on it, which means selling price is higher than buying price. What type of that gain? Capital gain or ordinary income? It is another complicated question. Even if you say ok, I will pay for tax, but the problem is you have to trace the time you using it as selling price. This doesn't make your life easier. If you just buy a cup of coffee spending $5 and you have to pay more than $5 as transaction fee and tracking bitcoin price at that time as selling price, would you want to use bitcoin?
- Buying Bitcoin as Investments
As we can see in the chart, the line of bitcoin price is flat until 2017. It goes up with such a sleep slope. We can analyze companies' stock based on their cash flow and other financial statements to get their instinct value. We can't analyze bitcoin since it is not a company and we don't have much information about it. So it is much riskier to invest in bitcoin. As of Feb 4, 2018, the bitcoin price is $8020. Just one and a half month ago, it was at peak value $19,343. Beside, there is a chance bitcoin will fail and other cryptocurrencies will survive. So many other reasonable investments other than bitcoin and some of them are tax-free investments, such as make investment on pensions. Buying in bitcoin is like gambling, you know you probably will lose but there is a hope to get huge payoff. It is gambling not investing.
Buying Bitcoin? Here are the investment risks you should know about. Retrieved February 04, 2018, from http://money.cnn.com/2018/01/25/pf/should-i-buy-bitcoin/index.html
Bitcoin Price Falls To $13,100; Good Time To Buy? (2018, January 14). Retrieved February 04, 2018, from https://cryptocrimson.com/bitcoin-price-falls-13100-good-time-buy/
Bitcoin. (2018, February 04). Retrieved February 04, 2018, from https://en.wikipedia.org/wiki/Bitcoin