Bitcoin is the first and best known ‘crypto currency’. Essentially these entirely digital currencies use a new technology called blockchain. Every Bitcoin transaction is logged in a global network of computers, which are rewarded for their har work by ‘mining’ Bitcoins. There are now several hundred competing crypto currencies. Anyone backing the next big one could get very, very rich.
Bitcoin hit the news around 2017 when the price shot up from 900 to 20000 USD. It didn’t last long, soon losing half its value.
Bitcoin can be used to purchase some good and services, however this is currently very limited (if you want to buy vapes online though you’re ok). It’s also the currency of the ‘dark web’ and extortion hackers, due to its anonymous nature. Governments are understandably nervous about crypto currencies, since they have no visibility if transaction, therefore cannot trace or tax them.
Facebook is currently talking about launching their own currency, which could give the company government-busting economic power.
Investing in Bitcoin
Buying Bitcoin is quite straightforward now, though there is a complication. Since you are essentially just buying an encryption key, you need to store it. You can use an online ‘wallet’ service to store it, however hundreds of millions of £s have been stolen from these. A British guy lost coins worth around £45million by throwing out his hard disk. That’d be really annoying.
One solution is the humble home printer…