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Y –<br />
W<br />
ith a series of dramas, including a failed<br />
unmasking of its anonymous creator<br />
and the bankruptcy of its largest<br />
exchange, Bitcoin has dominated<br />
financial news headlines for the<br />
best part of 9 months. What is this<br />
controversial new technology, where<br />
can you buy Bitcoins and is investing<br />
really worth the risk?<br />
One of the main qualities that makes a successful<br />
entrepreneur is the ability to spot exciting new<br />
trends and, after some solid research, to have the<br />
confidence to invest one’s own time and money into<br />
pursuing these ideas.<br />
Bitcoin is all over financial news at the moment.<br />
Whether it’s multi-billion dollar drugs busts, huge<br />
bankruptcies, or high speed car chases through<br />
the streets of LA, there’s no doubt that this new<br />
technology is causing quite a stir.<br />
So what exactly is Bitcoin, how do you invest in it<br />
and what are the risks involved?<br />
Bitcoin was created by a shadowy figure known<br />
as Satoshi Nakamoto who, to this day, remains<br />
anonymous. It’s usually described in the financial<br />
press as being a virtual, digital or cryptocurrency.<br />
The simplest explanation is that it allows users to<br />
exchange digital tokens (coins) over the internet,<br />
cheaply, quickly and virtually anonymously.<br />
Although it’s true that Bitcoin is a currency, that’s<br />
only part of the picture - a bit like saying that a<br />
computer is a word processor. The real genius<br />
behind Bitcoin is that it’s a whole new kind of<br />
protocol, capable of hosting any number of financial<br />
products.<br />
Bitcoin evangelists have suggested that the<br />
protocol could one day be used to automate<br />
financial services like accounting, banking and stock<br />
exchanges, and even be used as a way to securely<br />
exchange and sign contracts.<br />
These possibilities go beyond the idea of Bitcoin<br />
just being a currency and are, I think, the real<br />
reason why the price has risen so much over the<br />
last 18 months. Worth just £7.50 at the start of<br />
2013, its price peaked in November at £750 a<br />
coin, making a 1,000% increase in value in just 11<br />
months.<br />
Although today the price has normalised around<br />
the £350 mark, many digital experts believe the<br />
technology is here to stay. The Winklevoss twins,<br />
who co-invented Facebook with Mark Zuckerberg,<br />
have even suggested that Bitcoin will be bigger than<br />
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