Of all the talk over the past month about failing currencies and bailouts, there seems to be a virtual light at the end of the tunnel in the shape of Bitcoin. The digital currency has shared the headlines in recent days alongside a certain nuclear-laden despot with news that it has been valued at $1Bn. The turn in fortune of Bitcoin has been nothing short of astounding; in 2011, 1 Bitcoin was valued at $2. Today, 1 Bitcoin is worth an incredible $139, and it’s largely thanks to the uncertain economic climate in the wake of the Cypriot meltdown. More and more people are starting to view Bitcoin as a more secure form of money.
The concept of Bitcoin is a lot simpler than it appears. It is defined as an alternative currency and many sites online use it as their preferred currency, including Reddit. As opposed to ‘normal’ currency, there is no central banking. On the face of it, Bitcoins are no different to the Pound or the Euro. All currencies have a value so long as it is traded. If people were to stop trading Bitcoins, the value would reduce to zero, much as the Pound or Euro would.
Whether or not Bitcoin will become a prominent part of our lives is yet to be seen. Though interest is undoubtedly sky-high at the moment, people see it merely as the ‘Harlem Shake of money’; a fad that will disappear from our minds as quickly as it arrived.
There is also a sinister side to the currency. As it is untaxed and pretty untraceable, there are certainly criminal undertones that can be very easily exploited by those who want to. Either way, given the ever-present uncertainty of today’s financial system,-which every week seems to be reaching new lows-Bitcoin’s big secret is out. But is it a bubble that is about to burst?
Image courtesy of Jason Benjamin, flickr.com
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