The Bitcoin Buzz – Is it fading or still luring?

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Australian Economy

Bitcoin is the world’s first completely decentralized peer-to-peer digital currency. Unlike currencies in the conventional banking system, Bitcoin works without a central bank or system administrator and transactions are usually priced for a minimal fee, or most of the time, for free.

Bitcoin is the largest form of cryptocurrency, a medium of exchange that uses cryptography to make transactions extremely secure. While it remains as a relatively new phenomenon, more and more people, establishments, and firms use bitcoins to buy and sell products and services.

Bitcoins, according to websites that provide these offerings, can be bought or sold through “Bitcoin exchanges” via different currencies or mined by computers solving complex arithmetic problems. The general public is now realizing that this may not be a risk-free, get-rich-quick, investment opportunity and interest has been fading away with many diverse opinions coming into picture. For instance, Warren Buffet lately described these to be not worth a consideration. ‘When you buy non-productive assets, all you’re counting on whether the next person is going to pay you more, because they’re even more excited about another next person coming along,’ Buffett said. ‘The asset itself is creating nothing. Basically, no body knows what exactly bitcoin is’, something he emphasized on.

On the other hand, Bitcoin has mostly become a virtual investment, stored in digital wallets and traded on mostly unregulated exchanges around the world, and for some it is still said to be becoming a revolutionary asset. Particularly, the news that the parent company of the New York Stock Exchange, Intercontinental Exchange, or ICE establishing an online trading platform to help large investors trade in this cryptocurrency in terms of buying and holding Bitcoin has given a spark to the otherwise subsiding trend as seen in the last couple of days. This move has been unearthed from emails and documents that were viewed by The New York Times and few anonymous personalities. This follows the recent support to cryptocurrency from Goldman Sachs that intends to open a Bitcoin trading unit at a Wall Street bank. As of now, details of the platform are yet to be uncovered and remain confidential.

What made the currency so popular was the meteoric rise of its value – from over US $960 per bitcoin in January last year to about US $20,000 in December 2017. While the currency is almost down 50% now, some of the biggest names on Wall Street are gearing up to trade in Bitcoin, through the above virtual platform. While the skepticism remains high, and the trends over the last few months have been sinusoidal but needless to say that if you decide to invest in bitcoins you’ll need nerves of steel given the risk factor.

On the other hand, by virtue of this, blockchain technology has gained lot of traction and has become useful representing innovation in information registration and distribution that eliminates the need for a trusted party to facilitate digital relationships. This has been, thus, referred to an orchestration of three technologies (the Internet, private key cryptography and a protocol governing incentivization), by many experts.


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