Bitcoin: why the 4 year old digital currency is suddenly hot

Bitcoin grabbing headlines: why?

Bitcoin is a digital currency based on peer to peer technology and is completely decentralized and was established in 2009, already accepted by companies like WordPress and Wikileaks and over 1,000 other companies as cash. The reason Bitcoin has garnered so much attention of late is because it recently reached a record value of $256 USD, then plummeted, surprising advocates of what was designed to be a self-stabilizing economy, and affirming what traditionalists have long said about digital currency.

This isn’t the first time the currency has been alluded to as being in a bubble, as in late 2011, the price fell from $30 to lower than $2, so Bitcoin is seeing the massive attention not because of whispers of a bubble, but because of how high the value has risen, making bankers sweat over the possibility of a world transitioning to digital currency – although the globe’s money ship is so large, it could take decades to become a meaningful currency.

Visual explanation of Bitcoin currency

Other headline grabbers

In addition to a massive jump in value before it dropped, the Bitcoin exchanges were said to be having server problems due to high demand as there was a run on the digital currency. Meanwhile, just the month prior, a Bitcoin server saw what is called a “fork” in the transaction log, wherein a new version of the Bitcoin protocol was incompatible with earlier versions due to size, leading to two separate transaction logs being formed and some funds being double-spent. This problem was resolved by Bitcoin, but revealed a vulnerability in the digital currency.

The world has become accustomed to paying for goods and services digitally rather than at a point-of-sale machine, but with the salacious headlines surrounding Bitcoin (even when negative), awareness is quickly increasing for the digital currency, so businesses are questioning whether or not they should accept or spend digital currency.