A week is a long time in Bitcoin world
This week the price of a Bitcoin soared to more than $260 – albeit for a short period of time. This was helped by a surge in media interest. This week has seen the number of articles on Bitcoin and virtual currency explode to an all time high. Journalists appear to be enjoying another internet story whose next chapter is unknown.
There’ve been numerous attempts to suggest where it all might end up – many suggesting that Bitcoin is a flawed currency because of the way it is behaving. Today a Bitcoin ($116) will buy me a digital camera. Earlier this week ($260), it would have bought me two. Predictability is something people like with their currency, but a lack of it with Bitcoin doesn’t appear to be slowing down activity.
Speculation has run over what will actually happen with the price and adoption of Bitcoin. Some people have tried to plot its adoption trends on a technology adoption curve. But that model assumes that one or few sellers control the price – and doesn’t change it very often. In this case, the Bitcoin price is bouncing up and down like a rubber ball.
Venture capitalists have started to circle the market as Opencoin closed funding from Andreessen Horowitz, Vast Ventures, and Bitcoin Opportunity Fund. If nothing else, this serves as validation that Silicon Valley is moving into virtual currency in a big way. The New York Times reported that the Winklevoss twins have invested $11m in Bitcoins. Coindesk has heard unconfirmed rumours of larger purchases in the last two weeks. It wouldn’t be a week in Bitcoin without mentioning hackers. They finished off the week by disrupting the biggest Bitcoin trading platform, Mt.Gox, with a DDoS attack, forcing the organisation to temporarily cease trades.