The Astounding Rise—and Risk—of Bitcoin
by: The Knowledge Group
What Is Bitcoin?
At hundreds of billions of dollars, the currency’s value rivals top banks. In 2009, its anonymous inventor, publicly known as Satoshi Nakamoto, introduced this borderless currency for the social age, one that isn’t backed by banks or governments.
It’s based on a fascinating premise: “miners” with computers tackle puzzles of ever-increasing complexity. Each one solved earns a bitcoin. Sixteen million of the total 21 million bitcoins have so far been unearthed.
How Do You Buy It?
Virtual currency hedge funds are forming—more than 90 this year alone.
To buy small amounts of virtual currency, the popular retail ramp is Coinbase. After a two-step identity verification process (and a robocall from your bank’s anti-fraud department), Coinbase connects with your preferred account, ready to run on a smartphone app.
But Is It Safe?
It’s touted as a secure form on online payment. Merchants never see your financial details.
But then there’s the hacking. Most recently, on Dec. 7, digital currency platform NiceHash was robbed of $75 million in bitcoin.
WikiLeaks, blocked by the U.S. government from receiving credit card payments in 2010, requested funding by bitcoin. Not a bad move. Bitcoin reached parity with the dollar in 2011; last year, it approached $1000; as we write, it’s priced at about $17,000.
Caveat emptor. Without dismissing digital currency as a whole, some compare the astonishing rise of bitcoin to the dot-com bubble. Stay updated with the latest in the finance field whilst earning CLE and CPE credits by viewing our webcasts, be sure to view our extensive library by clicking here.