Blue-chip investment houses remain cautious, pointing out that, while a cryptocurrency may end up part of our everyday lives, there is no guarantee it will be Bitcoin. When a pernicious internet virus swept through 150 countries in May this year, it claimed at least 200,000 victims by infecting computers across the world. The targets of the biggest-ever hacking attack of its kind had one thing in common: the ransom coal mine bitcoin solo were asked to hand over in order to regain access to their computer systems had to be paid in a little-known form of electronic money called Bitcoin. Bitcoins are a currency that can be bought and sold using regular cash.
They exist only in cyberspace, in the form of a numerical code. The ransom demand coincided with Disney’s chief executive Bob Iger revealing that hackers had also recently demanded his film studio pay a ransom in Bitcoins. In this case, it was to prevent one of its forthcoming movies, believed to be the latest in the Pirates Of The Caribbean series, from being illegally released online. Weeks earlier, hackers also leaked upcoming episodes of the popular TV series Orange Is The New Black after the online broadcaster Netflix refused to pay a ransom — again in Bitcoin. So, what is this mysterious cyber-currency, which seems to provide an almost perfect means for organised criminals to collect and keep hold of their illicit gains? Put simply, Bitcoins are a currency that can be bought and sold using regular cash.
Once purchased, they can be exchanged for some goods and services, like normal money. Unlike other currencies, issued by banks and heavily regulated by governments, Bitcoins — which were invented in 2009 — are untraceable and can be exchanged anonymously, with anyone in the world, at the click of a mouse. That means they occupy a medium far beyond the reach of either the taxman or the normal rules of law. They started life in 2010, with an official value of just five cents in the U. Bitcoin, and stayed below a dollar all year. 1,000 over the ensuing 12 months.
200 in 2015, before beginning a vigorous surge. But that means it has increased by 200,000-fold since its launch. Fuelling this rise have been private investors, currency speculators and celebrities who believe that, despite its reputation as a means for crooks and computer geeks to exchange cash, Bitcoin could become a common currency for middle-class consumers. To this end, underwear tycoon Michelle Mone, a British peer, announced in September a venture to sell property in Dubai that would be paid for in Bitcoins. Twitter to endorse a rival currency called Electroneum. But is the Bitcoin gold rush the next big financial bubble about to spectacularly burst?
Such a warning was made in blunt terms this year by one of the world’s most powerful bankers. 17th-century bubble when investors manically piled into buying Dutch tulips. Someone is going to get killed. But it had little effect. Since then, it’s almost quadrupled in value. The FCA said anyone investing in them should be prepared to lose everything.
In China, where this trading has been most frenetic, authorities say they intend to ban trading of Bitcoin and other virtual currencies on its domestic stock exchanges. Bitcoin has already been banned from Chinese banks and financial institutions. Bitcoin’s attraction to criminals is obvious. It, and other online currencies, are highly encrypted, making transactions incredibly difficult to spot or track.
A Bitcoin alternative called Monero has so far proved anonymous and pretty much impossible to trace. Instead of a bank, a loosely linked network of computers globally tracks Bitcoin transactions. Anyone with internet access can anonymously create a Bitcoin address. For Bitcoins to be worth anything they need — like gold — to have a rarity value. Bitcoins by solving complex mathematical puzzles that take up vast amounts of computer power and time. 21 million will ever exist.