Cyber Currency Surge Amid Eurozone Crisis

 

As investors in cash-strapped countries seek safe havens, the four-year-old Bitcoin sees a surge in popularity.

8:05pm UK, Saturday 30 March 2013

Video: Virtual Money Takes On The Banks

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By Siobhan Robbins, Sky News Reporter

As the eurozone is rocked by the crisis in Cyprus, a cyber currency called Bitcoin has seen a surge in popularity from people looking for an alternative place to invest their money.

Bitcoins are basically virtual money which can be earned or bought. They were created four years ago by a hacker who remains anonymous.
There are no banks to control them, people just exchange them directly with each other over the internet. That makes them difficult to tax, trace or freeze.
In the last month, the Bitcoin has more than doubled in value.
It is claimed the surge is partly down to people in cash-strapped countries including Spain and Greece turning to Bitcoins in the hope of protecting their money.

Amir Taaki has helped develop the Bitcoin since it was created by a hacker

Amir Taaki, who has helped to develop it in the UK, told Sky News he believes it is a purer alternative to traditional banks.
"There are so many things that are wrong and broken with banks. Primarily, the biggest problem is I have to trust them and I have no other option.
"Bitcoin is a basic system where I can choose how much trust I put in other people.
"There is no central bank or central authority controlling it. Everyone that participates in the network is upholding the network and it's not a theoretical concept but a billion dollar market with charts and graphs and people are using it.
"Because it's decentralised and runs off a mathematical algorithm it means it can't be corrupted."

The premises where the digital currency is being developed

The huge spike in value makes it an attractive investment for some, but currency experts like Simon Smith from FxPro warns against that.
"It's totally unsafe. They might as well burn their money in a pile as far as I'm concerned. Yes, Bitcoin has doubled in value over the last month but it has every sign of being a bubble."
Bitcoin has reached an all-time high, trading at almost £60. Its market value is now more than £500m.
Some restaurants and shops already accept Bitcoin as payment and its supporters claim that in the future it will be dispensed from ATMs like pounds and euros.