In December 2016, bitcoins, the cryptocurrency across the world, crossed the $1,000 mark and continued the scale.
However, a new high for bitcoins came on March 2 when the markets closed with the cryptocurrency sitting at the value of $1,268, which is higher than the price of one ounce of gold i.e. $1,233
This rise of bitcoin value may be a result of numerous factors. One of them is possibly the rising value of the bitcoin in earlier weeks. Another could be the tough time being faced by gold in the current market.
Gold prices have remained more or less consistent since 2016 and there has not been a tremendous rise or fall in its value.
Gold Versus Bitcoins
This is the first time in years that the price of bitcoins surpassed that of gold. U.S. based website, Business Insider, revealed that at around 10:20 AM. ET on Thursday, March 2, the cryptocurrency climbed to $1,241.30. At the same time, gold was positioned at around $1,241.25.
A few minutes later at 10:41 AM ET, the bitcoin value rose up by 1.8 percent, counting to $1,248.10, while gold value fell to $1,242.15 with a decrease of 0.6 percent.
The value of bitcoin has been quite volatile since its first launch in 2009, questioning the life of the cryptocurrency. However, this time even if it's a short-lived success for bitcoin, it is a remarkable achievement nonetheless
Bitcoin's Working Procedure
Bitcoin is a relatively new form of currency. Similar to other currencies, its value is also determined by the exchanges it incurs.
"Mining" is the name given to the procedure of facilitating the bitcoin transactions. The procedure involves a mathematical problem solved by the computer with a 64-digit solution.
One block of bitcoin is processed for each problem solved. The miner also gets bitcoins in return for this process of mining. Currently, there are around 15 million bitcoins in existence.
In order to receive a bitcoin, one must have a bitcoin address. The bitcoin address is a string of 27 to 34 letters and numbers. The address acts as a virtual post-box where bitcoins can be placed or removed. The addresses can be stored in bitcoin wallets for managing savings.
Bitcoin: Facing Issues In China
It must be noted that bitcoins faced severe backlash from the Chinese government because it believed that funds were being smuggled out of the country in the form of the cryptocurrency. This suspicion has led to severe regulations of the digital currency in China, which has in turn limited its growth.
Since the addresses used for bitcoins are not registered, transactions are made anonymously. Therefore, due to its anonymity, users are attracted. Bitcoins also lack government control, which makes it attractive to many people.
Photo: Zach Copley | Flickr
