Currency for a computer age

computerage08 Dec 2013 / The Press – A Christchurch resident has purchased a bottle of wine with a virtual currency he is “mining” in his own garage. Bitcoin, a digital form of gold, is making its entry in New Zealand here in Canterbury. Cecile Meier reports.

Have you heard about bitcoins? Not many seem to understand its details. Even its creator, Satoshi Nakamoto, remains a mystery.

The digital currency was first presented in November 2008 in an academic paper shared with a cryptography mailing list.

It caught the attention of the tech community but took years to be taken seriously elsewhere.

However, the value of a bitcoin rose to over US$1000 (NZ$1190) for the first time ever last week, just months after a single unit of the digital currency was priced at around $10.

This surge in value came after it received recognition from a series of businesses and authorities across the world.

It featured in a US Senate hearing last month to consider placing it under American regulation, and Sir Richard Branson’s Virgin Galactic, Walmart through e-gifter and online e-commerce leader, Shopify, are or will accept bitcoins as a form of payment.

No-one controls the digital currency. A network keeps track of all transactions made using bitcoins but it doesn’t know what they were used for – just the ID of the digital “wallet” they come from.

The soaring value has triggered a response from financial authorities. France’s central bank has warned against the use of the virtual currency bitcoin, noting that it is not only highly volatile but also unregulated by authorities.

China’s government has banned financial institutions from trading in bitcoins, and former US Federal Reserve Chairman Alan Greenspan has taken a strong line, saying bitcoin is a “bubble” and that the virtual money isn’t currency, according to media reports……. Read more


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