Bitcoin is a digital currency, used to buy and sell products on the Internet. Its creation and distribution is not tied to any central authority, government or institution, it can even be used in any country in the world. It is a currency controlled and stored in computers, which uses cryptography to validate each transaction. It is a form of payment, like credit cards or PayPal. This currency can be stored in digital wallets, mobile phone, hard drives or specialized web portals. As there are no intermediaries between those who use bitcoin, there are no additional costs or restrictions. No taxes.
Bitcoin was introduced for the first time in 2008. The protocol was created by a programmer known under the pseudonym of Satoshi Nakamoto. The system was designed to work thanks to a huge network of computers. The bitcoin is, in essence, long Internet addresses, of 33 characters, which are stored in an account book called “Blockchain”.
The bitcoin virtual currency faces one of its worst moments since it acquired fame and value in the market. On January 14, its price plummeted 21 percent compared to the previous day, which put it at 127 pounds. It is the lowest price of this electronic currency since March 2013. On January 15, it recovered slightly and is around 142 pounds per unit. The currency has already fallen 39 percent since December 31 of last year and its value is already 83 percent lower than its historical maximum of almost 852 pounds per unit, registered in January 2014. The future of this currency is committed. For the experts of the CoinDesk portal, it is at risk because its price is below 177 pounds. Marshall Swatt, director of technology at Coinsetter, a currency exchange house, believes that bitcoin is passing through a passing moment, as it happens with oil, and hopes that the collapse will not continue.
The sharp fall has begun to generate panic among those who invested in bitcoins. On January 14, a massive sale of this currency was reported. Part of those who believed in their future, now want to get rid of it as quickly as possible. This deepens their depreciation.
On January 12, the BitStamp exchange house suffered a cyber attack that resulted in losses of 5 million pounds. 19,000 bitcoins were stolen.
It was one more blow to the fragile credibility of bitcoin. We still remember, with suspicion, the bankruptcy of the Japanese exchange house MtGox, which closed its website in February 2014 after a cyber attack in which 700 million pounds were stolen in digital currencies.
As a result of the fluctuations of bitcoin during 2014, the medium specialized in economics Bloomberg, did not hesitate to classify it as the worst currency of the year. The Quartz business website was launched at the ready against the cryptocurrency and crowned it as the worst possible investment. Bitcoin started 2013 with a value of fewer than 10 pounds and, in a matter of 4 months, it was already above 200 pounds. The virtue of speculation and exaggerated enthusiasm took off.
The collapse contrasts with the support it has received from some companies and governments. For example, in July 2014, the State of California (USA) approved it; In December, Microsoft announced that it will allow the payment of applications and services with bitcoin in some of its stores in that country. Other companies have already adopted or plan to do, such as Zynga, Paypal, Overstock, Target, Amazon, Victoria’s Secret, Reddit, Virgin Galactic and Subway, just to mention some of the most representative.
Will you risk it and invest money or you will layback and see how the digital world goes crazy?