The price of a single Bitcoin has just hit an all-time high of $10,000(£7,495). There was excitement when the rate for a single Bitcoin reached $5,000 (£3,750) for the first time in October, but since then it has doubled in value again.
However experts fear an economic bubble may be fuelling the speed of the increase in value and levels of interest and investment.
What is Bitcoin and what is driving this rise in value?
In reality only a few people genuinely understand blockchain and how it can be used. This is understandable given the contrasting information and conflicting opinions surrounding cryptocurrencies.
Blockchain (or distributed ledger technology) is a permanent digital database that is, in theory, tamper-proof. The aim of this technology is to provide security and transparency for transactions where multiple parties do not know or trust each other.
The technology has been available for around a decade and until recently has been dominated by the Bitcoin. However, a growing number of blockchains have recently appeared including Ripple, Ethereum, Evergreen and Azure. I will be looking into what the difference between these cryptocurrencies is and how they are being used in a series of blogs we’ll publish over the next couple of months.
The value of the Bitcoin has risen rapidly over the last couple of months which is somewhat at odds with the speed the volume of Bitcoin transactions is growing. To us this suggests many of those who are buying Bitcoin are speculating on its value rather than using it to purchase goods.
That said Bitcoin is finally gaining some serious interest from some financial institutions who aim to use it to lure in more cautious investors. This is likely to boost Bitcoin’s price further and hopefully mean that Bitcoin will finally establish itself as a major digital currency.