You’ll Never See Bitcoin On The Stock Exchange

You’ll NEVER be able to purchase stock in Bitcoin because Bitcoin as a company does not exist. While there are many Internet based companies (such as Google, FaceBook, Twitter, etc) that are, at their core, just software, their developers (unlike BitCoin’s) decided to use a “corporate” model or envelope in which to own their software. The original developer of Bitcoin released the Bitcoin software as Open Source. On the Bitcoin.org website they say “The software is a community-driven free open source project, released under the MIT license.” You can visit each of those links if you are not familiar with their meanings. Much of the negative writings about Bitcoin are by writers who are totally ignorant of the Open Source software movement and miss the ideas behind this business model when they criticize Bitcoin.

The companies that release their software in a manner known as “proprietary” (not open source) often transfer their rights to a corporation they formed for that purpose. After a period they then launch what is know in business and stocks  as an IPO (an Initial Stock Offering) as a way to raise money to grow their idea and company. As an example, Google’s stock started out at $100 per share and is now trading at $783. Investors purchase the original stock in the hopes that the stock will appreciate. Companies have to reached a certain size in order to even be eligible to offer their stock in an IPO.

There is also something in the world of stocks called a “stock split” where the per share stock price is reduced and, at the same time, the owners of the stock receive more shares. To see an example of a 1987 stock split of Microsoft stock visit this historical chart. Scroll down to Sep 21, 1987 and you will see the result of a 2 for 1 stock split. One share was worth $116 before the split and each share was worth $53.50 immediately afterwards.  But the very first trading price of Microsoft stock is listed at  $25.50 in March 13, 1986.

So the idea I’m proposing here is that at least some of the value of owning Bitcoins is attributable to the fact that, because there will be a finite amount of Bitcoins produced, each Bitcoin doubles as a pseudo-stock certificate in an Open Source “pseudo-company “. Since the pseudo-stock Bitcoin is indistinguishable from the Bitcoin currency the stock aspect goes largely undetected by the public and the media.

As the software and Bitcoins gain acceptance, and users start to better see its potential, some aren’t necessarily in it with the expectation to turn a “quick buck”, nor even to use it for transactions but instead look at their Bitcoins as a long-term investment in a new type of pseudo-corporation unlike any other. Since their value will go up as demand for the limited number of them increases holding Bitcoins long-term functions basically the same as holding stocks for a long period.

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