The more bitcoins that have been 'mined', the longer it takes to mine new coin, and the more electricity is used in the process. New bitcoins are created by “mining” coins, which is done by using computers to carry out complex calculations. In November 2021 it hit a record high of more than $68,000, as a growing number of investors backed it as an alternative to other assets during the Covid crisis.īitcoin has been criticised for the vast energy reserves and associated carbon footprint of the system. In practice it has been far more important for the dark economy than it has for most legitimate uses. In January 2021 the UK's Financial Conduct Authority warned consumers they should be prepared to lose all their money if they invest in schemes promising high returns from digital currencies such as bitcoin. The exchange rate has been volatile, with some deeming it a risky investment. This means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person.

The lack of any central authority oversight is one of the attractions.

These transfers can be done with minimal processing cost, allowing users to avoid the fees charged by traditional financial institutions - as well as the oversight and regulation that entails. Invented in 2008, you store your bitcoins in a digital wallet, and transactions are stored in a public ledger known as the bitcoin blockchain, which prevents the digital currency being double-spent.Ĭryptocurrencies can be used to send transactions between two parties via the use of private and public keys. Bitcoin is a 'cryptocurrency' – a decentralised tradeable digital asset.

Bitcoin price december 2017