Bitcoin has climbed nearly $3,000 in the space of 24 hours to reach $15,000 (£11,000) in value, but its ever-changing market worth has led to games platform Steam banning the currency for its volatility.
The cryptocurrency hit new heights today, reaching $15,080 at the time of writing, bringing its market cap to over $250 billion.
But PC gaming platform Steam, owned by Valve, stopped supporting the cryptocurrency on Wednesday due to its unpredictable value’s impact on transaction fees fixed by the Bitcoin network that Valve cannot alter.
This saw gamers recently paying $20 per transaction, compared to $0.20 per transaction when Valve initially supported Bitcoin for Steam payments, it said.
“These fees result in unreasonably high costs for purchasing games when paying with Bitcoin,” a blog post written by the Steam team read. “The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically.”
Moreover, due to how quickly Bitcoin fluctuates in value, if a payment isn’t completed within a certain window of time, and its value changes before the payment goes through, Steam had to ask users to make another payment to cover the remaining balance, or refund them if the value had dropped.
“In both these cases, the user is hit with the Bitcoin network transaction fee again,” Steam’s blog post explained. “This year, we’ve seen increasing number of customers get into this state.
“At this point, it has become untenable to support Bitcoin as a payment option.”
Since its creation in 2008, the process of mining to release new bitcoins has also required ever-more computation power, and that’s now having an effect on the climate.
Bitcoin analysis blog Digiconomist estimates Bitcoin’s energy consumption at more than 30 terawatts-hours of energy, more than some countries’ energy usage, and relies mainly on coal-based power plants in China.
“This results in an extreme carbon footprint for each unique Bitcoin transaction,” the blog read.
Platforms that have built businesses around Bitcoin are still susceptible to hacks, too, with NiceHash, a marketplace matching people with spare computing power with Bitcoin miners, temporarily halting operations last night after confirming a security breach.
While it didn’t confirm how much had been stolen, CoinDesk put the value at around $60 million.
06/12/2017: Bitcoin eyes $13,000 mark as futures contracts loom
The value of Bitcoin smashed past $12,000 for the first time in its history earlier today and is likely to break the $13,000 mark before the weekend.
Bitcoin is currently trading at just over $12,500 at the time of writing, marking an almost $800 gain over the course of a single day and bringing the total value of Bitcoin’s circulation to over $200 billion.
The price of Bitcoin has been steadily increasing over the past few months, yet this latest surge comes at a time when the world’s largest cryptocurrency is seeing increased recognition from the mainstream industry.
Revolut, a digital banking platform that itself is considered something of a disruptor in the financial sector, this week announced it would allow customers to buy and sell Bitcoin, Ether and Litecoin on its mobile app. If its application for a European banking licence is successful, this will make it the first UK bank to offer the same services normally associated with online exchanges.
The sudden spike in value can also be put down to the impending launch of the first Bitcoin futures contracts by US financial firms CME and CBOE. This would effectively mark the biggest shake-up of the Bitcoin market, which has until now relied purely on cash trades at fluctuating prices.
Futures contracts would allow investors to trade for Bitcoins at a fixed market value, hedging against the risk that the cryptocurrency may suddenly pop and drop in value. While many traditional investors are optimistic about the prospect of futures contracts, it’s unclear exactly how it will affect the market.
Instead of the investment we see right now, where people are speculating a sudden price increase will yield a quick return, it’s possible that futures contracts will cause the market to settle. It’s likely that many miners will turn to selling futures contracts at a set price to ensure they get a guaranteed return on their investment, and that owners will do the same if the price begins to fluctuate. If that happens, we may see a drop in the number of sudden spikes in valuation.
It’s all speculation at this point, but we’ll know for sure on 10 December when the first contracts start to emerge.
04/12/2017: The Bitcoin goldrush may be about to end, as the UK Treasury and other EU authorities consider regulations designed to make cryptocurrencies less useful for criminal activities, it is widely reported.
Along with other EU regulators, the Treasury is planning to put an end to the anonymous trading model which has made Bitcoin and other cryptocurrencies an attractive payment method for black market traders and cyber criminals.
“We are working to address concerns about the use of cryptocurrencies,” a Treasury spokesperson said, “by negotiating to bring virtual currency exchange platforms and some wallet providers within Anti-Money Laundering and Counter-Terrorist Financing regulation.”
The proposals would force online Bitcoin exchanges to conduct due diligence investigations into their customers, and report any suspicious transactions to law enforcement. The new rules, which are set to match regulations coming into force across the EU, will likely come into force early next year, according to reports.
Because Bitcoin and other cryptocurrencies can be bought, sold and traded anonymously, they have long been popular on dark web marketplaces as a way for users to untraceably pay for illegal goods like drugs, guns and stolen personal information.
Bitcoin has also found popularity among cyber criminals, and is the most common payment method for victims of ransomware attacks like the WannaCry attack in May. In fact, the invention of Bitcoin has been blamed by security experts for the surge of ransomware outbreaks over the last several years.
In addition to privacy fanatics and criminals, Bitcoin has also started to become incredibly popular with investors, who are now beginning to view it as a commodity-style financial asset. Growing interest from hedge funds and other investors has seen the value of bitcoin skyrocket this year, growing by more than 1,000% in 2017 alone. The value of one bitcoin hit $11,566 earlier today, but has since fallen to $11,313 at the time of writing.
Labour MP John Mann, a member of the House of Commons Treasury select committee, told the Telegraph that the UK must look into the proliferation of cryptocurrency exchanges, saying: “These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money laundering, terrorism or pure theft.
“It would be timely to have a proper look at what this means. It may be that we want speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.”
29/11/2017: Bitcoin is now worth $10,000
Following a meteoric rise over the past year, Bitcoin has finally smashed past the $10,000 mark for the first time in its history.
The world’s biggest cryptocurrency by market capitalisation has risen tenfold since the start of the year when it was operating at around $950, taking its total market worth to just under $170 billion. At the time of writing, one Bitcoin is currently trading at $10,667.
The news also means that Bitcoin is now up 900% since it first launched, and has increased by 230% since its most recent slump in September following the scrapping of Segwit2x upgrade proposals.
One of Bitcoin’s earliest transactions in 2009 involved the purchase of two Pizzas worth around 10,000 Bitcoins. Today, that transaction would be worth $100 million.
What’s caused the surge?
Fundamentally, Bitcoin has changed little since the start of the year, and its unprecedented rise is largely due to increased public exposure, greater certainty among traditional financial institutions, and a surge in the number of short-term investors trying to make a quick return.
Although the currency is praised for being decentralised, the lack of official backing from government and the financial sector has made investors skittish, showing that its success is still tied to traditional organisations. As we saw in the first half of 2017, increasing government pressure on markets in China, which eventually saw a complete ban on initial coin offerings (ICOs), not only resulted in slumps in the price of Bitcoin, but a significant drop in the amount that was traded each day.
Both Bitcoin and Ether, the second-largest cryptocurrency by market cap, have since benefited from the rise of ICOs over the past year, as the majority of these crowdfunding projects require investors to pay in one of these two currencies.
“$10k represents the closing of the second cycle in Bitcoin which has drawn the interest of institutional investors who have so far been constrained from trading by their remits,” said Charles Hayter, CEO of CryptoCompare. This is starting to change as more sophisticated and regulated instruments are made available.”
Yet, the biggest boost has come from markets in Japan, which legalised Bitcoin as a payment option in April. Since then, over 260,000 merchants in Japan have started using the cryptocurrency, according to Coincheck.
The passing of the $10,000 mark represents a significant milestone for cryptocurrencies, which are considered to be one of the most drastic deviations from traditional currencies the world has seen. Given that Bitcoin continues to traverse uncharted territory, the future of all cryptocurrencies are tied to its success, and many investors will be looking to see if this sudden rise ends in a catastrophic dive.
28/11/2017: Bitcoin valuation hits record high – again
Bitcoin has smashed through another record milestone, after the value of the cryptocurrency sailed past $9,800.
Bitcoin shot up in value over the weekend, going from around $8,000 on Friday to over $9,500 by 5AM UTC on Monday. The digital currency’s valuation has sailed over the course of this year, rocketing up by around 900% from just $1,000 at the start of 2017.
The rise has been fuelled by increasing engagement with bitcoin from hedge funds, investment firms and financial institutions, which have started to speculate on the bitcoin market. Earlier this month, the Chicago Mercantile Exchange – the world’s biggest futures exchange – announced that it would begin offering bitcoin futures at some point this year.
Bitcoin’s colossal value now represents a bigger market cap than GE, Disney and IBM, and one Bitcoin is now worth seven times as much as an ounce of gold.
However, experts and analysts are warning that the Bitcoin boom may represent a huge bubble, with the risk of a similar crash to the dot-com bubble in the early 2000’s. According to Bloomberg, Bitcoin is now four times more valuable than dot-com stocks were at the height of the boom, and a collapse is certain to occur at some point.
While bitcoin remains popular, it is the technology that underpins it that has perhaps attracted the most attention from tech companies. The blockchain technology that supports bitcoin – also referred to as a distributed ledger – has been used by companies including SAP, IBM and HPE to manage payments, supply chains, contracts and more.