BBC: Bitcoin price hits new high in three years, becoming the best performing currency in 2016

The recent news that the price of Bitcoin has broken through the $1,000 mark is already well known. Many mainstream media have lamented the explosive power of this digital currency, and the BBC Business Edition even reported the news about Bitcoin directly on the main page. The following is the original report:

The price of digital currency bitcoin has surpassed $1,000 (£815) for the first time in three years, after being crowned the best performing currency of 2016.

According to data from CoinDesk, the current price of the currency is approximately $1,060 (as of press time).

Analysts attribute much of the jump in the price of the currency to China, which has the highest volume of bitcoin transactions among all countries and a growing demand for bitcoin.

Bitcoin transactions are based on the Internet and are transmitted freely among countless computers. It is a global and anonymous way of transferring money.

Therefore, some people speculate that Chinese people are trying to circumvent the government's strict capital outflow management system through Bitcoin.

China's legal currency, the yuan, fell 7% last year.

On the contrary, compared with the fiat currencies issued by central banks around the world, the price of Bitcoin rose by 125% in 2016, becoming the best performing currency.

Paul Gordon, director of the UK Digital Currency Association (DCA), said:

The endless war on cash and strict capital controls have made Bitcoin a safe haven option available during high-risk periods.

David Moskowitz, founder of Singapore-based bitcoin broker Coin Republic, believes that many investors have already viewed bitcoin as a safe-haven asset. He told the BBC:

The price of the currency has been rising since November, most likely due to India's demonetization and Venezuela's capital controls, as well as rumors that other countries may adopt similar policies.

How Bitcoin Works

Bitcoin is often referred to as a new type of currency.

However, it exists in the form of virtual tokens, which is different from other physical currencies.

However, like all currencies, Bitcoin's value lies in the volume of transactions by its users.

"Mining" is a necessary process for processing Bitcoin transactions, which requires a 64-bit solution to calculate a difficult mathematical problem.

Every time a problem is solved, a block of Bitcoin is produced, and the miner can also receive financial rewards.

This model has also attracted more and more people to contribute computing power and participate in mining.

In order to coordinate the growing computer computing power, the difficulty of mining will also be adjusted accordingly to ensure the stable output of Bitcoin.

The number of bitcoins that have been mined so far is 15 million.

A Bitcoin address is required to send or receive Bitcoin. A Bitcoin address is a string of 27 to 34 letters and numbers that acts as a virtual mailbox in Bitcoin transactions.

Currently, these addresses are not recorded uniformly, so Bitcoin transactions are anonymous to a certain extent.

In addition, these addresses are stored in Bitcoin wallets to manage account balances.

A Bitcoin address is like a privately operated bank account, with the added clause that if the data is lost, the Bitcoins contained therein cannot be recovered.

Resilience

Since its creation in 2009, Bitcoin's price has been volatile, and many experts have questioned the future of this cryptocurrency.

The last time the price of the currency exceeded $1,000 was at the end of 2013.

However, the good times did not last long. After the collapse of Tokyo exchange Mt. Gox, the price of the currency continued to decline at a rate of 40% per day, eventually stopping at $400.

Regarding the current price increase, some experts believe that Bitcoin's development momentum will not weaken in the near future.

An article from CoinDesk wrote:

Analysts said that 2017 is destined to be a "harvest year" for Bitcoin, and the price of the currency will definitely surpass the peak of $1,216.7 in 2013.

Moskowitz said:

The price of the currency may fall back in the future, but given Bitcoin’s high resilience, I remain positive about its prospects.

Bitcoin has been killed 115 times. Today, it is still the best way to transfer value directly between people, and no third party organization or individual can stop Bitcoin transactions.

Currently, the number of bitcoins in circulation has increased significantly.

The market value of Bitcoin has also exceeded 160亿美元.