The virtual currency Bitcoin is becoming more and more popular. Since the Cyprus crisis it has gotten a lot of media coverage all over the world drawing a lot of unknowing people towards Bitcoin. This has been responsible for reaching a market cap of over 1 billion US Dollars and the rise of Bitcoin to more then 100$ per coin today.
The past few weeks something remarkable happened. After it became known that bank depositors in Cyprus have to contribute some of their savings to their banks Bitcoin more then doubled in price. Since Bitcoin is not controlled by any authority it insures that all money is covered and and can’t be touched by authorities.
Bitcoin rise correlated to declining trust in the euro
Consulant Jacob B from Innopay: ” You can see that the confidence in the euro has declined in some countries and after that you see the value of Bitcoin rise sharply. I definitely think that there is some connection between that. How much that is, I’m not sure about”
Bitcoins exists since 2009. An anonymous user devised a way for people to pay without banks being involved. The coin is nothing like real money, but created by complex cryptographic formulas. Anyone can join the Bitcoin network as the software is openly available. The system also ensures that coins can not be copied and that there will only be a limited number available and is thus a deflationary currency.
Bitcoin not the first virtual currency but different
Virtual currencies have actually been around for a very long time but not in the form of Bitcoin Often they are used by stores or at the fair in a form of plastic coins but they are not very special. The big difference is that Bitcoin has not central issuer, it is created by many miners around the world.
More and more can be bought with Bitcoin, recently it became possible to pay your pizza with them and now some dutch guy even has his house for sale for bitcoins.
Bitcoin however, is not completely without risks. Since your wallet is stored in a digital form it can be stolen by hackers. This is not very different from real currencies though as there are may ways hackers to get into internet banking systems for consumers with scams and skimming.
Share and Enjoy