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27 Nov, 2013 15:09

Bitcoin value passes $1,000 for first time ever

Bitcoin value passes $1,000 for first time ever

Bitcoin, the digital ‘crypto-currency’ has passed the $1,000 mark for the first time in history, marking a growth of some 4,000 percent since the beginning of the year. The milestone was recorded by Tokyo-based Mt Gox bitcoin exchange on Wednesday.

The unregulated virtual currency's popularity has been soaring  in recent weeks, having doubled in just the past seven days. In just one day, November 18, the price leaped from $478 in the morning to $744 at midnight (GMT).

This was the same day that US Senate Homeland Security & Governmental Affairs Committee held the currency's first Congressional hearing entitled “Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies” to take a close look at existing virtual currencies, including bitcoin.

Bitcoin temporarily exceeded the equivalent of $1,000 on the Chinese exchange, BTC China, on the 19th of November. However, this is the first time the $1,000 mark has been surpassed in a US dollar-denominated exchange rate.

China is one of the world’s biggest bitcoin markets, but demand for the virtual currency appears to be exploding on a global level. The University of Nicosia (UNic), one of the major English-language universities in the Mediterranean, announced during the past week that it would be accepting bitcoin payments for its digital currency program next year. 

Screenshot from bitcoinity.org

This month, the Chicago Federal Reserve observed that the currency was “a remarkable conceptual and technical achievement,” noting how there are on average about 30 bitcoin transactions per minute.

The decentralized, crypto-currency is free from any government or central bank control. Currency is sold and bought at online exchanges, and those transactions can be virtually anonymous.

Since its inception in 2008 by a man using the alias ‘Satoshi Nakmoto’, bitcoin has now gone mainstream; it can be used to buy coffee, pay for online dating services, and can even be retrieved from an ATM. According to Bitcoincharts, which follows the anonymous currency, there are nearly 12 million bitcoins in circulation.

The year has witnessed bitcoin play an increasingly major role in financial transactions globally. Over $1mn in bitcoins was stolen from an Australian online bank at the beginning of November, while the first bitcoin ATM opened in Vancouver, south west Canada at the end of October. Germany is fast becoming a hotbed of exchanges, with August 16 marking its official recognition by the country under the term “Rechnungseinheiten,” which roughly translates to “units of account.” 

The FBI also forced closure of illegal online drugs and weapons store Silk Road in October, which used the currency exclusively, on account of the difficulty of identifying anonymous users. However, a new 'incarnation' of the store was opened in November.

Screenshot from blockchain.info: Bitcoin value has increased by more than four times over the course of just a month (October-November 2013).