Bitcoin is not for nerds anymore; it’s mainstream. It took the front page of the Financial Times – the UK’s largest investment newspaper – and has made thousands of appearances on media outlets online. But bitcoin is still a very mysterious subject. If you’re not familiar with the digital currency, there is a great guide to bitcoin on the poker comparison site, bitcoinpoker.org, but for those that are, here’s why you should care (and possibly worry) about the virtual currency.
- Bitcoin creator, Satoshi Nakamoto has never been fully identified. It is expected that Satoshi is planning on remaining anonymous indefinitely, however there are reports that on creating the currency, he ‘mined’ millions of bitcoin (which would now be worth millions of dollars).
- Bitcoin is associated with some incredibly immoral goings on. A heavily encrypted online market place, The Silk Road, allowed users to buy and sell drugs and guns using this anonymous currency. A scary thought, and one that many governments are trying to keep a close eye on.
- Bitcoin is incredibly unstable; we have seen prices rise from $10/BTC to over $250/BTC in a matter of weeks. Speculators are thriving on this high risk, high reward investment and creating what appear to be small (or potentially huge) bubbles. Bitcoin is now a billion dollar industry, volatility like this is unheard of and incredibly dangerous for the personal wealth of thousands.
If you’re considering investing in bitcoin, small doses are recommended. There are legitimate reasons as to why someone would want to deal in the currency (low transaction costs for example), however storing significant volumes of real fiat money in this virtual world is highly unadvisable.