$200 BILLION wiped off cryptocurrency market in 24 hours as Bitcoin value plunges by 22% | Daily Mail Online
Last week strategists at The Bank of America had already warned that the rapidly rising price of bitcoin may be ‘the mother of all bubbles’, comparing it to the tech boom in the late 1990s.
Research produced from The University of Cambridge, in the UK, estimated that there are between 2.9 to 5.8million unique users using a cryptocurrency wallet in 2017, most of them using bitcoin.
WHAT IS BITCOIN AND HOW DOES IT WORK?
What are Bitcoins?
Bitcoin is a cryptocurrency – an online type of money which is created using computer code.
It was invented in 2009 by someone calling themselves Satoshi Nakamoto – a mysterious computer coder who has never been found or identified themselves.
Bitcoins are created without using middlemen – which means no banks take a fee when they are exchanged.
They are stored in what are called virtual wallets known as blockchains which keep track of your money.
One of the selling points is that it can be used to buy things anonymously.
However, this has left the currency open to criticism and calls for tighter regulation as terrorists and criminals have used to it traffic drugs and guns.
How are they created?
Bitcoins are created through a process known as ‘mining’ which involves computers solving difficult maths problems with a 64-digit solution.
Every time a new maths problem is solved a fresh Bitcoin is produced.
Some people create powerful computers for the sole purpose of creating Bitcoins.
But the number which can be produced are limited – meaning the currency should maintain a certain level of value.
Why are they popular?
Some people value Bitcoin because it is a form of currency which cuts out banking middlemen and the Government – a form of peer to peer currency exchange.
And all transactions are recorded publicly so it is very hard to counterfeit.
Its value surged in 2017 – beating the ‘tulip mania’ of the 17th Century and the dot com boom of the early 2000s to be the biggest bubble in history.
But the bubble appears to have now burst and questions remain over what market there is for it long-term.
Some shops and restaurants are accepting for purchases, but overall this is a tiny part of the market of the real economy.
While there are concerns Bitcoins can be hacked.
$200 BILLION wiped off cryptocurrency market in 24 hours as Bitcoin value plunges by 22%
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