Bitcoin Tops $1,000 as Virtual Money Gains Popularity

bitcoin

From: Bloomberg.com

Bitcoins were trading at $1,003 apiece today on Mt. Gox, one of the exchanges where the digital money can be traded for other currencies. On Bitstamp, the most active dollar-based marketplace among online exchanges, they were at $949.90. Bitcoins were trading at $12 to $13 a year earlier, and have quintupled this month.

Bitcoin Origins

Introduced in 2008 by a programmer or group of programmers going under the name of Satoshi Nakamoto, Bitcoins exist as software, which contain the rules governing their supply. New Bitcoins can only be created by solving complex problems embedded in the currency, keeping total growth limited. There are more than 12 million Bitcoins in circulation, according to Bitcoincharts, a website that tracks activity across various exchanges.

Bitcoin is being used to pay for everything from Gummi bears to smartphones on the Internet. The virtual curency can also be traded without being tracked, potentially reducing banking-transaction fees and making it an attractive tender for those seeking to buy and sell via the Web or in stores.

When Silk Road was shut down, the virtual currency lost a third of its value within days as holders sold, predicting a crackdown. Instead, the willingness of authorities to stamp out illegitimate use has come to be seen as an endorsement for Bitcoins, making users and investors more comfortable taking risks with digital money.

Bitcoin also gained further legitimacy and attention when a subsidiary of Baidu Inc. (BIDU), China’s top search engine, started accepting Bitcoins on Oct. 15. Chinese Bitcoin activity has exploded, with the number of yuan-based trades jumping 30-fold in the past two months and making BTC China the top online-exchange by volume.

Read more FULL ARTICLE AT BLOOMBERG.COM

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