Morning Report Wednesday 23 July 2014
What is Bitcoin and does it provide investment opportunities?
For a trader well and truly beyond both the "Y and Z Generations", getting my head around the Bitcoin phenomenon was a challenge, but an extremely quiet market afforded me the unusual luxury of time. I have decided to attempt to explain it on a very simple level. Bitcoin is a virtual currency that is generated by mining, similar to Gold, with the maximum ever available limited to 21 million Bitcoins; this compares to a central bank like the Fed printing $$ when they need it. Currently, 50 Bitcoins are being generated (mined) every 10 minutes with over 10 million Bitcoins already generated. The speed of generation is a careful balance to maintain growth and a self-stabilising economy. People can buy and sell Bitcoins on exchanges using local currencies, but hackers have managed to destabilise these exchanges in the past which clearly fuels the cynics' arguments, though the supporters could simply counter that as plenty of banks have been robbed. Let's look at the benefits of a virtual currency through Bitcoins which are genuinely exciting:
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