Bitcoin is a virtual currency, in other words, a kind of computer code to which people attribute a certain value. Unlike the euro, the dollar and other “traditional” currencies, physical bitcoin does not exist. You cannot have any in your wallet.
Unlike traditional currencies, bitcoin is not issued by a central bank. It was created as a means of retribution for users who help to verify, record and secure computer codes on a decentralized system to which everyone has access: the blockchain. Each block accepted is paid for by newly generated bitcoins in jargon, bitcoin mining.
What explains the sharp rise in bitcoin?
The recent popularity of bitcoin is due to several reasons. Following the long period of low interest rates that we are experiencing, more and more investors are ready to try their luck with an alternative currency, certainly riskier, but with a better potential in terms of profits. The “classic” financial world – banks and stock exchanges is also beginning to take an interest in it. From Bitcoin Forum this is the best deal here.
Is there a risk of a speculative bubble?
After a rise of 1,000% since the beginning of the year, we can only see the huge popularity of bitcoin. When it passed the $ 10,000 mark, the total market value of the currency was higher than that of the US computer group IBM, which has existed for 106 years and employs 386,000 people worldwide.
- The future of bitcoin remains very uncertain. Even though it all started with the payment of a pizza, bitcoin is still far from being used as a means of universal payment. The blockchain technology that supports virtual money is still not able to process a large number of transactions quickly. This is why it sometimes takes several minutes to close a simple transaction in bitcoins, like paying a cup of coffee. In addition, the high volatility of bitcoin which can earn or lose 10% of its value in a day – does not make it a particularly attractive means of payment.
- Even if early fans continue to say that bitcoin could eventually become a means of payment – with some adjustments the currency seems to be primarily under the influence of investors speculating on a rise in the price. And as long as they are convinced that there are other people willing to pay more for a bitcoin, the price will continue to climb.
Clearly, this motto is not meant for everyone. Bitcoins are not regulated by the authorities, so if you are hacked or if the price falls sharply, your assets are not guaranteed. The investor estimates that eventually, bitcoin could reach $ 100,000.