A BEGINNER’S GUIDE TO THE BITCOIN BUBBLE

This week the cryptocurrency Bitcoin soared to a value close to $17,000 – and will probably have fluctuated more by the time you read this! Bitcoin was created in 2009 by a character or group, with the pseudonym Satoshi Nakamoto, who’s identity still remains a mystery. It is what’s known as a decentralised currency. No-one owns the Bitcoin company, instead it works like a huge public ledger. Details of all transactions, where people send payments in the Bitcoin currency to each other are all held on a public ledger recording who paid and who received. The technology underneath Bitcoin, is the real magic of the this story. It’s called the Blockchain and is now being used by financial institutions, by legal firms and even by shipping companies to manage transactions and records. Bitcoin has been lauded by enthusiasts as a way to reduce bank-charges and currency transaction fees and make online payments cheaper for sellers and buyers. While others, including some of Wall Street’s big names have called the whole thing a scam. However, private investors around the world have been bitten by the bug and total value of cryptocurrencies has now exceeded $400billion. Security in numbers was an early slogan used by the Bitcoin community, however, caveat emptor seems more appropriate for anyone thinking of dipping their digital toe in to the choppy waters of cryptocurrencies.