Wednesday, December 24, 2014

Boston Globe: "After all the hype, Bitcoin’s value has shriveled"

By Hiawatha Bray

Did you get a stack of Bitcoins for Christmas? Better spend them fast.

You remember Bitcoin, the digital currency that was the talk of the tech industry last year. Bitcoin is issued by a private global network of computers, rather than by some government’s central bank. So it lets buyers and sellers bypass traditional banking systems, and pay sharply lower fees for their transactions.

Not long ago, the Bitcoin hype was inescapable. The value of a single Bitcoin soared to over $1,000 by late 2013. In February of this year, a Boston firm called LibertyX set up an ATM machine at South Station that spewed out Bitcoins instead of paper bills. The following month, a search for Bitcoin’s reclusive inventor made the cover of Newsweek.

But you haven’t read many cheerful Bitcoin stories these past few months, because the value of the digital currency has shriveled. In late September, I signed up for Circle Internet Financial Ltd. a new Boston company that deals in Bitcoins. Like all new customers, I got my first $10 worth of Bitcoins for free, but being a thrifty soul, I didn’t spend the money. As of this week, my ten-spot was worth about $8.33. My Bitcoins had lost 17 percent of their value just sitting there. Lucky for me I hadn’t gotten the digital money back in January — Bitcoins have lost two-thirds of their value since then. No wonder most sensible souls bailed out long ago.

Read the rest here.

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