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Other fans point to the expansion in novel cryptocurrencies. Due to bitcoins maturity, and its particular focus on finance, if you want to buy some Ether, some Filecoins or any other cryptocurrency, its usually easiest to buy bitcoin together with your conventional currency and then trade bitcoin for the cryptocurrency of your choice.
Few would argue that there isnt a good deal of speculation in the cryptocurrency marketplace. There are commercials on the London underground, and around Instagram and Facebook, encouraging viewers to invest in cryptocurrencies and, judging by the amount of money flowing in to the ecosystem, a lot of individuals are taking up the offer. .
At some point, those people will get flighty and try to cash out their gains. If enough do at once, the price of bitcoin will take such a fall it is going to prompt a run and nicely see the classic crash.
But the real question is not if that will happen, but when and how large the crash is. Three times now, bitcoin has had boom-and-bust cycles which have seen enormous amounts of worth destroyed, but have still left the currency valued higher than it had been before the previous boom began.
After the crash which followed, one coin has been worth $120.) Its not a smooth ride but that doesnt mean its a entire bubble. .
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As the bitcoin network has grown, its hit problems. For dull, technical reasons, the network as it had been initially designed struggles to deal with the amount of traffic which flows through it these days, leaving huge flaws in the amount of time it takes for a transaction to be confirmed.
In a normal, centralised, business, which wouldnt be an issue: simply update the software and continue on. But a bitcoin upgrade requires convincing every single miner to take the new software differently, the miners who carry on running the older version are efficiently running a completely different currency from people who have updated. .
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This is known as a challenging fork, and for the first six decades of bitcoins lifetime, it was the nightmare every developer tried to avoid. But recently, divisions among the community have become so fractious that numerous hard forks have occurred, all around the way to deal with this traffic slowdown.
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With names such as Bitcoin Classic, Bitcoin Unlimited, and Bitcoin Gold, each claims that it is the genuine go now heir to the original vision but with every branch, the playing field becomes more crowded.
Nothing is destroyed with every branch: if you had 100 bitcoin before Bitcoin Cash split , after the split you had 100 bitcoin and you had 100 Bitcoin Cash. However, with every branch, the playing field becomes more crowded, more confusing for newcomers, and the total reputation for (relative) stability becomes more eroded.
It varies greatly. Some, like JP Morgan Chase head, Jamie Dimon, are really dismissive of the whole thing, arguing that the most properties of bitcoin that make it so appealing as a form of electronic gold will be why its doomed to remain a niche prospect. For Dimon and co, the volatility of its exchange rate, lack of any economic oversight to control monetary policy and absence of assistance in major nation states mean bitcoin cant ever truly replace pounds and dollars and is consequently a failure. .
Few disagree with this conclusion, however, some bankers point to other advantages of the technology. The blockchain concept, they say, could be useful in conventional banking also. Forget bitcoin itself and focus instead on the value of a distributed ledger. What if all the significant banks substituted with their normal book-keeping with one mutual, but still shut, database Might that help cut down on fraud and ensure a more level playing field.
And then, of course, there are the advantages of bitcoin that conventional banking cant hope to compete - and doesnt want to. Can a shadow currency exist purely on the back of drug dealing and cybercrime Quite possibly: both are big businesses, and neither shows any sign of going away. .
Craig Wright, who promised to be Satoshi Nakamoto, the elusive bitcoin inventor. Photograph: Mark Harrison/PA
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Hes still a puzzle. The pseudonymous founder of bitcoin, Nakamoto looked from nowhere in 2008 when he published the white paper that clarified his planned digital currency would get the job done. While he was active in the online community around bitcoin for the first couple of years of the currencies life, he posted less and less, making his last ever post on 12 December 2010. .