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article imageBitcoin value surpasses gold for first time

By Tim Sandle     Mar 3, 2017 in Business
For the first time in its history one unit of the digital cryptocurrency Bitcoin is worth more than the value of an ounce of gold. This reinforces the growing importance of the digital currency.
Based on U.S. values the worth of one Bitcoin unit was at $1,268 compared with a troy ounce of gold, which stood at $1,233 (these values are correct as of March 4, 2017). The reason for the relatively sharp rise in the value of Bitcoins was attributed to a surging demand for the digital currency in China. The use of Bitcoins in China is rumored to be for the channeling of money out of the country.
The rise in value contrasts strongly to 2014 when Bitcoins plummeted in value. Nevertheless, since Bitcoin fist appeared in 2009, the value has fluctuated considerably and they remain a fairly volatile currency. Bitcoin is attractive to some online users because of its anonymity and because it does not fall under government control.
What are Bitcoins?
Bitcoin is a cryptocurrency (which means a digital asset designed to work as a medium of exchange using cryptography), plus a form of payment system. Bitcoins were invented by an unidentified programmer (or perhaps a group of programmers) under the name of Satoshi Nakamoto (some commentators think the Australian programmer Craig Steven Wright is Nakamoto, however others say the evidence is not conclusive).
The way Bitcoins are used is through peer-to-peer transactions, directly between users. Such transactions are verified by network nodes and recorded in a public distributed ledger termed the blockchain. Initially Bitcoins did not receive much in the way of official ratification, but they are now regarded by the U.S. Treasury as a decentralized virtual currency. A number of websites accept Bitcoins, with the number of merchants trading in Bitcoins for products and services exceeding 100,000.
The future
While there are currently about 15 million Bitcoins in existence, like any other currencies its value is determined by how much people are willing to exchange it for. Whether Bitcoins remain more valuable than gold will be determined as the digital currency matures.
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