Looks like the bitcoin is making headlines again. The crypto-currency zoomed up Wednesday to its highest levels since early November but the reasons for the zip up remain as mysterious as the currency itself.
Some theorists claim that the unknown creator of the bitcoin has finally been uncovered. Two publications—Wired and Gizmodo—came out with separate articles pointing to Craig Steven Wright, a businessman in Australia, as the inventor of the currency. The revelation sent the price of the bitcoin up to $423.
Other analysts dismiss this reasoning, claiming that cause of the rally is due to the reports of a legal arrangement that will keep a very large chunk of 1.1 million bitcoins locked up in a trust until 2020. The hypothesis eliminates the risk of a big supply of the currency hitting the market anytime soon and causing depressed prices while it also gives the currency a boost of confidence in its value right now.
Other theories for the jump in the bitcoin price are afloat as well. According to one bitcoin startup investor, the rally is like any other in the currency sector, coming after a long-term bull market. He sees trading activity in China as the No.1 factor of the rally as the volume of transactions there has increased into the double digits in the past few months.
What is it about the bitcoin that generates so much interest and media hype? Everyone likes a good mystery and from its very invention, the currency has raised eyebrows and turned heads in wonder at exactly where it came from and where it was going.
The crypto-currency zoomed up Wednesday to its highest levels since early November but the reasons for the zip up remain as mysterious as the currency itself.
When and Where
According to legend, Satoshi Nakamoto began working on the bitcoin concept in 2007 in Japan. It was registered in 2008 and in 2009, the first version of the bitcoin was released by Microsoft. The first transaction of bitcoin currency took place between Satoshi and a cryptographic activist and the exchange rate was set in October of the same year at US$1 = 1,309.03 BTC, using an equation that included the cost of electricity to run a computer that generated bitcoins. The bitcoin market was established in 2010 and the first, real-world transaction using the currency took place when a Jacksonville, Florida programmer paid 10,000 bitcoins for a pizza on the Bitcoin Forum. At the time, the exchange rate put the purchase price for the pizza at around US$25.
After three versions of the program, the Mt.Gox Bitcoin currency exchange market was established followed by several other exchanges. A few investigations into the legality of the currency ensued and the Financial Action Task Force, an inter-governmental group warned about the use of digital currencies to launder funds and to finance terrorist groups.
This didn’t hamper the popularity of the currency and its value continued to climb. By the end of 2010, its market cap exceeded $1 million USD. By January 2011 and 5.25 million bitcoins had been generated, totaling more than 25 percent of the projected total of almost 21 million. It reached parity with the U.S.
dollar for the first time one month later. Exchanges in several countries including England were opened and the rate of exchanged reached at MtGox touched US$10 per BTC. Several setbacks and government investigations took place between that time and November 2013 when its price climbed to $700. But the then Federal Reserve chairman Ben Bernanke, came out in favor of the bitcoin as a legitimate currency sending t it to its all-time high of US$1216.73 on 17 November 2013 at on the Mt. Gox exchange. Since then the value of the bitcoin has jumped all over the place mostly hovering between $200 and $400.
Although the name of the developer of the bitcoin has always been shrouded in doubt, the latest revelation will bring the crypto-currency back into the public’s eye and will certainly affect its value for the short run. Whether or not the would-be inventor is indeed the up until now unknown 44-year old Australian, the mystique surrounding the bitcoin is bound to continue for some time to come.