The Rise and Fall and Rise of Bitcoin

AND RISE Even the world's top economic minds aren't quite sure what to make of Bitcoin. An entirely digital currency without the support of any government, completely without regulation and largely anonymous, there's simply no precedent for something like Bitcoin. Is it a (B true digital currency, a speculation-driven bubble, or something completely new? It's anyone's guess. In fact, since Bitcoin isn't backed by a commodity or a BITCOIN central bank, even something as simple as the real value of a Bitcoin is completely unclear. And, as you'd expect, that has made Bitcoin' trading price incredibly volatile. THE RISE OF BITCOIN In 2009, Bitcoin was launched anonymously as an open-source programming experiment. Largely ignored by the mainstream, the "cryptocurrency" was soon embraced by both hackers and internet-based black markets due to the completely unregulated nature of the transactions. But as the currency shot up in value, the business press and speculation market began to take note. Bitcoins caught our imagination because there was something new, exciting and a bit dangerous about them. Unregulated Hackers Drug deals Money laundering BITCOIN'S RISE IN VALUE Oct. 5, 2009 $0.00076 May 21, 2010 $0.0025 July 12, 2010 $0.08 Feb. 9, 2011 $1 June 8, 2011 $31.91 Peak value before crash BITCOIN Oct 17, 2011 $2 Lowest value after crash THE FIRST CRASH & THE REBOUND Shortly after the June 8, 2011, trading peak, Bitcoin's value crashed. PR blunders, security flaws, theft and several days of suspended trading on exchanges caused investor confidence to buckle, and prices to nosedive. Thanks to Bitcoin's decentralized nature and value as an entirely digital currency, however, the currency's value quickly rebounded. Less than two years after the 2011 crash, Bitcoin's value against the U.S. dollar was more than triple the previous record. Because of the secretive, untested, and volatile nature of Bitcoins, their valuations fluctuated quickly and drastically at times. PR blunders Security flaws Theft Suspended trading BITCOIN'S FIRST CRASH & REBOUND IN VALUE Peak Bitcoin value $266 Bitcoin value the next day Weighted average value since May, 2013 $135 Bitcoin value $100 $100 one year later $9 $13.55 June 8, 2012 Jan. 1, 2013 April 1, 2013 April 10, 2013 April 11, 2013 Weighted average THE BUSINESS OF BITCOIN As the value of Bitcoin has grown, businesses and investors have begun taking the currency more seriously. The impact on Bitcoin's value and legitimacy has been dramatic. The numbers tell the story of Bitcoin's growth today and the potential for a financial revolution in the upcoming years. 10,000 BTC $985,600 Approximate value of that pizza deal in July The amount of Bitcoin spent on roughly $25 worth of pizza in 2010 2013 11,418,350 $1,038,713,607 Total number of Estimated value of all Bitcoins in circulation Bitcoins in USD BITCOIN 1,000 $1.9 MILLION Number of merchants now accepting Monthly Bitcoin transactions on black-market internet site Silk Road Bitcoin accordingto BitPay BITCOIN IN PERSPECTIVE After four years of boom and bust, are we any closer to knowing the real value of a Bitcoin? The consensus seems to be a resounding "Maybe." After the April, 2013, spike and crash, prices stabilized for several months around the $100 level. While some analysts believe this is a reasonable price point, debate about the currency's ever-shifting value rages on. cenoo ceros.com Sources: newlibertystandard.wetpaint.com | bitcointalk.org | en.bitcoin.it/wiki/History | stackexchange.com | www.guardian.co.uk www.businessinsider.com | blockchain.info | bitcoinwatch.com | americanbanker.com | www.economist.com All figures as of early August 2013 E OF THE RISE AND