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But what ever you do, don’t bet your shirt...

Editorial
Friday 25 October 2013 20:27 BST
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At first glance, Bitcoin appears to have everything going for it. As a virtual currency with no controlling authority it is at once philosophically provocative (what is money, really?), economically curious (are we witnessing the birth of a new world order?) and politically liberating (who needs nation states and central banks anyway?). It also – albeit sporadically – shoots up in value at rates inspiring awe and avarice in equal measure.

What began in 2008 as the theoretical brainchild of a developer known only by the pseudonym “Satoshi Nakamoto” has proved surprisingly popular. The criminal element were the first to clock the benefits of an ungoverned financial system, but speculators soon followed their lead. Such was the frenzy, that the value of a single Bitcoin hit $266 in April. Just to clarify, that is $266 for a “coin” that does not exist, was created by a computer algorithm written by no one-knows-who, and is backed by nothing at all.

Within hours the price had crashed by more than half, but – in part thanks to US moves against the “Silk Road” website allegedly used to sell drugs and the like, often using Bitcoins – it has since risen up above $200 again.

Tempting? It certainly is. Even more so now that Michael Novogratz, a big cheese at a leading Wall Street hedge fund, is recommending a flutter. At the same time, why not pick up a few shares in the South Sea Company or some Semper Augustus tulip bulbs? That’s if there is anything left after the investment in inner London property, of course.

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