With a shrinking supply, the peer-to-peer decentralized digital currency bitcoin reached a two-year high Monday. Amid reports the virtual currency seeing its supply declining in July, prices have reached their highest level since early 2014.
The cryptocurrency hit $696.50 Monday, which is the highest its been since February 2014. Bitcoin prices have been recovering since falling under $200 in January of last year. The decline came after the digital currency exceeded $1,000 in late 2013.
Despite climbing prices, mining companies won’t see profits. As part of a process that has been written into the code to limit supply, profits from mining bitcoins will be reduced in July.
Bitcoin has received a lot of legitimacy over the past year as many venture capitalists and banks have been ecstatic over the blockchain technology. Though, it still has its critics, including Willem Buiter, Citbank chief economist, who told the World Economic Forum in Davos:
“We know that bitcoin itself is a complete failure and shows the number one law of programming and software: that anything that can be programmed can be hacked. So nothing is completely secure.”
Taavet Hinrikus, CEO of international-payments app TransferWise, also said in an interview with Yahoo! Finance: “Bitcoin, I think we can say, is dead. There is no traction, no one is using bitcoin. The bitcoin experiment, I think we can say, is over.”
Moreover, it may not be a libertarian, hate-the-state currency once thought either. It still won’t be a currency to shield your identity, prevent the government from snooping on you and defend yourself against authorities.
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