None indifferent to bitcoin wave

BITCOIN’S surge in popularity has seen the cryptocurrency’s value soar in recent months.

Some of that shine has come off in the last two weeks, though.

The decline was hastened by word that China was proposing a ban on bitcoin trading on regulated exchanges.

Even so, the digital currency (and here purists question whether it amounts to a currency at all) has seen a 284% net gain this year alone, a phenomenal return for holders of bitcoin.

Inevitably, the gains have sparked debate over whether bitcoin has entered bubble territory. Time will tell.

But the sudden retreat from all-time highs of just under $5 000 on September 1 hasn’t deterred enthusiasts.

Fans of bitcoin say its detractors are ignorant of how the digital asset actually works, which is not entirely a misplaced charge.

For those generations more attuned to the transactional exchange of notes and coppers, bitcoin does require a new way of thinking.

One of its key attributes – and it has several distinguishing features as an instrument of legal tender – is the absence of a central issuing authority.

To critics, this is enough cause for alarm and raises the risk of holding onto bitcoin as one might by investing in a more conventional asset, like a share, where the investor at least has a proportional claim in the event that it liquidates.

This week JP Morgan boss Jamie Dimon predicted bitcoin’s collapse, saying he would fire any of his traders who speculated in bitcoin, “For two reasons: it’s against our rules, and they’re stupid. And both are dangerous.”

If bitcoin was a fence, fairly assume that most people would be on either side of it, and none sitting on top. Bitcoin clearly divides opinion.

Underlying the currency part of it, however, is blockchain, which is an electronic ledger spread out across open source networks where the verification and recording of transactions take place.

It offers transparency and security, which is why companies, including traditional banks, are looking at its greater application.

The infrastructure, indeed, has much to offer the world.

Just don’t bet the house on bitcoin yet. The easy money has been made.