Following a month of turmoil, the value of popular cryptocurrency Bitcoin soared to a record high on Monday, August 7th, with the currency’s exchange rate growing 16% to an eye-watering $3,451.86 (£2,651) according to the Coindesk Bitcoin Exchange.
This is the first time that the value of Bitcoin has ever surpassed the $3,400 dollar mark and at the close of the market on Monday, the value of a single Bitcoin was worth almost three times that of an ounce of gold. Comparisons between the Bitcoin and Gold markets have often been drawn but Bitcoin enthusiasts continue to maintain that the digital currency is a more effective store of value due to its provably finite nature.
Bitcoin is a digital currency created in 2009 by Satoshi Nakamoto used to make payments of any amount without the fees such as bank charges which are often associated with similar types of transactions. Part of the popularity of the cryptocurrency relates to the fact that the money is free from government control and the fact that the currency is controlled entirely by market demand.
According to a study by the University of Cambridge, there are currently as many as 5.8 million users with cryptocurrency wallets, with the large majority of these using Bitcoin. The latest surge in the value of Bitcoin is perhaps the biggest indicator yet that the cryptocurrency asset class may be maturing in the eyes of the more professional investor.
Much of Bitcoin’s recent growth has been down to the fact that more and more companies are now on board with regards to accepting the cryptocurrency as a form of payment and the fact remains that Bitcoin is an extremely quick and convenient way to transfer money.
Companies such as Foodler and Expedia have been successfully dealing in the business of Bitcoin since 2013 and 2014 respectively, with the former even handily converting your bitcoins into US Dollars for food outlets which don’t yet accept the cryptocurrency themselves.
The popularity of Bitcoin is also prevalent in the gambling industry, with BetGames offering users the chance to use the cryptocurrency in a number of unique live betting experiences in conjunction with Bitcasino, as explained on their bitcoin blog new layout.
The rise in the value of Bitcoin also follows the split and creation of a rival cryptocurrency at the beginning of the month. The split followed a feud concerning the best way to upgrade the cryptocurrency’s underlying technology – an issue has certainly dogged Bitcoin’s development in recent times. As the popularity of the digital currency has grown, transactions have become slower due to a cap on the amount of data processed by the blockchain.
As a result, a compromise scheme named SetWit2x was set up with the aim of increasing the size of the available data blocks to around two megabytes, with some of the original Bitcoin data also set to move off the main network.
However, some stakeholders were in favour of increasing the size of the data blocks more drastically and Bitcoin Cash, was effectively set up as part of the breakaway.
— Bitcoin Cash (@BITCOlNCASH) August 1, 2017
Whilst Bitcoin Cash started off life fairly poorly, its future does seem to be more certain after one of the leading exchange and wallet services, Coinbase, promised support to the breakaway currency by 1st January 2018 after previously refusing to give such a commitment.
As a result, Bitcoin Cash’s value has slowly started to creep back up the levels it saw as its inception but nevertheless, Bitcoin remains the market leader with regards to cryptocurrency and the latest surge in its value is proof that digital currency is here to stay the more Internet savvy businesses and investors and currently reaping the rewards.