Feeds

Bitcoin briefly soars to record $147 high, driven by Cyprus bank flap

Attraction of non-gov currency draws punters

Security for virtualized datacentres

Virtual currency Bitcoin soared to a record high of nearly $147 yesterday as Euro-spurred interest continued to boost its exchange rate.

The e-cash fell back later in the day to $117, but the value of all Bitcoins in circulation is still well on its way to $1.4bn.

The online dosh has rocketed from just $10 last November as the crisis in Cyprus and the spreading lack of faith in governments and currencies in the wake of austerity and recessionary pressures push folks to invest in something out of the control of The Man.

Bitcoins aren't government-backed and don't have a central bank, leading some investors to treat it as a kind of online version of gold or silver - a safe haven for their cash.

However, that general lack of oversight is also the main problem that critics have of the system, claiming that Bitcoin offers criminals an untraceable way to launder their ill-gotten gains.

Individual Bitcoins exist as a digitally signed solution to a complex mathematical algorithm. New Bitcoins are 'mined' by calculating solutions for unsolved algorithms. A detailed explanation is available on the Bitcoin website (PDF, page 4) and Wikipedia also has a non-brain-melting version.

The value in the system was in the sheer time needed to solve the algorithms and create each unique Bitcoin. In addition, there is a limit of 21 million Bitcoins that can be mined. Creating a limit on the total quantity of Bitcoins puts it into the same monetary league as gold, with finite supply creating greater demand.

But, unlike gold, there's no physical reason why there can't be more Bitcoins; that's just the current rule. Right now, estimates reckon there are nearly 11 million Bitcoins in existence.

As with all new things, particularly online new things, analysts are divided on whether Bitcoins are the greatest thing since sliced bread or the latest ephemeral bubble destined for a loud pop. Meanwhile, as more savvy investors get involved and start looking for ways to short the currency - i.e. bet on the price plummeting - regulators are starting to sit up and take notice.

The Financial Crimes Enforcement Network (FinCEN) in the US, which enforces laws against money laundering, has already said that a number of parties in the Bitcoin biz qualify as money service businesses (halfway down) so they need to register with the government, collect info on their customers and take active steps to combat money laundering. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.