A recent US Senate committee hearing declared that virtual currencies are, “a legitimate financial service” and has given it the stamp of respectability. Since then the value of the bitcoin has soared to over $1,000.
Enthusiasts of the currency say it is a very efficient way to handle global money transfers, and are astounded to see its value rise so much within five years of trading. It was only January, when it was less well known, that its value was just $20, to say it has fluctuated wildly is putting it mildly, $230 during April, below $70 during July, then over £600 in November. The Bitcoin is sometimes described as a new type of currency, but as for all currencies, its value is determined by how much people are prepared to exchange it for.
In order to process a transaction a computer must solve a mathematical problem which has a 64 digit answer, this is called mining bitcoins. The miners now use bespoke flexible chips, application-specific integrated circuits, known as ASIC, when a problem is solved, the processing of a block of Bitcoins is completed, and the miner receiving a reward of new Bitcoins.
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