Last Update: 14:20
In 2016, the virtual currency more than doubled in value making it the number one gainer in global currency trading.
Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto. Earlier this year secretive Australian entrepreneur Craig Wright said that he was the creator, but some have raised doubts over his claim.
The supply of Bitcoin is limited and it trades in cyberspace. Unlike traditional currencies such as the dollar or the euro, which are issued and controlled by a central bank, Bitcoin creation is decentralized. Encrypted digital coins are created by supercomputers and then traded online or exchanged for goods and services by a network of users.
Some people use Bitcoin as an investment, while there are also claims that criminals use it as a currency for illicit transactions beyond the reach of law enforcement in secretive Internet-based drugs and arms deals.
Analysts said the rise in Bitcoin was due to the currency΄s safe-haven status, like gold, at a time of global uncertainty. Others believe buying is being driven by speculative demand, with investors anticipating future rises and creating an unsustainable bubble.
Bitcoin΄s value has fluctuated wildly since its creation. News of a major Bitcoin theft by hackers in August, for example, sent its price plummeting by more than 20 percent in the aftermath.
uhe/jd (Reuters, AFP)