Bitcoin’s record spike means a man paid £ 440 million for two pizzas, according to Science & Tech News
Bitcoin has hit a new all-time high – with prices breaking £ 44,000 for the first time.
The surge on Saturday came exactly one year after the volatility Cryptocurrency lost 50% of its value in two days, dropping to £ 2,873. It’s up 1,431% over the past 12 months.
Bitcoin is now in uncharted territory. While some analysts believe the digital asset could hit £ 70,000 this year, others fear dramatic sell-offs are on the horizon.
Part of the cryptocurrency’s popularity lies in how its supply is set at 21 million, with new coins expected to be released gradually through 2140.
Proponents claim this is contributing to the scarcity – unlike traditional currencies such as the US dollar, which have seen their supply increase dramatically as a result of the coronavirus pandemic.
Tesla helped spark interest in Bitcoin when the electric vehicle maker announced it had invested $ 1.5 billion (£ 1.1 billion) in the cryptocurrency last month.
It is estimated that Elon Musk’s company has already made more profit from this investment in one month than from selling cars throughout 2020.
However, critics have accused Tesla of damaging its green image because of concerns about Bitcoin’s environmental impact.
Research by Digiconomist suggests that the annual carbon footprint of the cryptocurrency is comparable to that of all of Slovakia, a country of 5.5 million people. The electricity needed for a single Bitcoin transaction would also be enough to power an average American household for 25 days.
Bitcoin, launched in 2009, reached a significant milestone last year when PayPal announced that it would allow its users to buy, sell, and store the cryptocurrency – and use it to make purchases from millions of merchants. The payment giant’s crypto service was launched in the US last October and is slated to roll out in the UK later this year.
Last month, Mastercard also announced that it would give its customers the ability to make payments using Bitcoin and other cryptocurrencies.
However, buying things with Bitcoin might not be a good idea for several reasons. The cryptocurrency network can only process five transactions per second, while Visa can process thousands.
Bitcoin’s volatility can also have ramifications. Laszlo Hanyecz bought two pizzas for 10,000 BTC in 2010 when the cryptocurrency was worth a penny. Fast forward to now and this stash of crypto is worth a whopping £ 440 million.
The rising price of the asset in recent years has turned early adopters into millionaires, but not everyone has been so lucky.
Newport’s James Howells threw away a 7,500 BTC hard drive in 2013, which at today’s prices would be worth £ 330.2 million. He has offered to pay the council millions of pounds to find a landfill, but his requests have been repeatedly denied on environmental grounds.
According to the Financial Conduct Authority, 1.9 million Britons owned cryptocurrencies like Bitcoin last June.
Bank of England Governor Andrew Bailey warned that people who buy Bitcoin should be ready to lose all of their money – and recently predicted that the cryptocurrency won’t last.
Other senior officials, such as European Central Bank President Christine Lagarde, have called for Bitcoin to be regulated globally – a warning that it is being used for “fun business”.
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