Bitcoin - Full Story

What Is Bitcoin?

https://bcorpus.blogspot.com/2017/12/bitcoin-full-story.html

Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency – the system works without a central repository or single administrator.The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary.These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies,[12] products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Research produced by Cambridge University estimates that in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin

History of bitcoin
On 18 August 2008, the domain name bitcoin.org was registered.In November that year, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open source code and released it in January 2009.The identity of Nakamoto remains unknown, though many have claimed to know it.

In January 2009, the bitcoin network came into existence after Satoshi Nakamoto mined the first ever block on the chain, known as the genesis block, for a reward of 50 bitcoins. Embedded in the coinbase of this block was the following text:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

One of the first supporters, adopters, and contributors to bitcoin was the receiver of the first bitcoin transaction, programmer Hal Finney. Finney downloaded the bitcoin software the day it was released, and received 10 bitcoins from Nakamoto in the world's first bitcoin transaction. Other early supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold.

In the early days, Nakamoto is estimated to have mined 1 million bitcoins. Before disappearing from any involvement in bitcoin, Nakamoto in a sense handed over the reins to developer Gavin Andresen, who then became the bitcoin lead developer at the Bitcoin Foundation, the 'anarchic' bitcoin community's closest thing to an official public face.

The value of the first bitcoin transactions were negotiated by individuals on the bitcointalk forums with one notable transaction of 10,000 BTC used to indirectly purchase two pizzas delivered by Papa John's.

On 6 August 2010, a major vulnerability in the bitcoin protocol was spotted. Transactions were not properly verified before they were included in the blockchain, which let users bypass bitcoin's economic restrictions and create an indefinite number of bitcoins. On 15 August, the vulnerability was exploited; over 184 billion bitcoins were generated in a single transaction, and sent to two addresses on the network. Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed and the network forked to an updated version of the bitcoin protocol.

On 1 August 2017 bitcoin split into two derivative digital currencies, the classic bitcoin (BTC) and a hard fork, Bitcoin Cash (BCH).

Source:
https://en.wikipedia.org/wiki/Bitcoin

How its Wotk?
They're a bit like money ... and they're a bit like a financial bubble. They're bitcoins, and they are suddenly ubiquitous, showing us a little glimpse of what the future of money might be like.

Bitcoins are generally defined as a type of virtual currency, brought to life by the Internet, very powerful computers and the willingness of lot of people looking to embrace new forms of monetary exchange.
Bitcoins share many similarities with other currencies, but the most important one is that more and more merchants, retailers and individuals, both online and offline, accept bitcoins as payment. You can buy pizza with bitcoins, subscribe to an online dating service, or even shop at your favorite superstore.




Yet bitcoins are also very different from traditional currencies. Unlike dollars or pounds, bitcoins aren't backed by any government. They're a completely decentralized form of money. Bitcoins aren't linked to any sort of central banking system or issuing authority, and that's a big part of their appeal -- instead of being swallowed into system that's often sullied by human greed and manipulation, this currency exists in an online world driven by mathematics and clever encryption protocols.

You can use bitcoins for all sorts of real transactions. To do so, you first buy bitcoins however you like, either through your credit card, a bank account or even anonymously with cash. Then your bitcoins are transferred directly into your Bitcoin account, and you can send and receive payments directly to a buyer or seller without the need for a typical go-between, such as a bank or credit card company.

By skipping the middle man in the transaction, you pay far less in associated fees. Each party in the deal can also maintain a much higher level of anonymity, which has both pros and cons for everyone involved. Think of bitcoins as a digital equivalent of a cash transaction. If you're so inclined, it's a nearly untraceable way to do business.

Spending or receiving bitcoins is as easy as sending an e-mail, and you can use your computer or your smartphone. That simplicity belies the fact that there's a whole lot of complicated math protecting all of these transactions to maintain their legitimacy and security.

Keep reading to see more about the mysterious rise of bitcoins, as well as the inner workings of the network that keeps this so-called "crypto-currency" alive and kicking.

Source:
https://money.howstuffworks.com/bitcoin.htm


Medaia Article:
Bitcoin investors beware: The IRS wants its cut and you may not know it
Bitcoin and its brethren are viewed as property, not currency, by the IRS.
A U.S. court has ordered Coinbase to turn over identifying information on 14,000 accounts.
The onus is on investors to report gains to the IRS.

If you're a bitcoin investor and have cashed in on your gains — or made purchases using the cryptocurrency — don't forget the Internal Revenue Service is entitled to a piece of the action.

The value of one bitcoin has surged this year to more than $9,000 as of Thursday morning from $997 (and up from less than a dollar in 2010). There's a good chance if you have cashed out or paid for anything using it, you have capital gains to report to the IRS.

Basically, the tax agency has ruled that bitcoin and other cryptocurrencies are viewed as property and not currency for tax purposes. And although you may not receive a Form 1099 from whatever exchange you trade on, you remain responsible for paying taxes on gains. (Click on chart below to enlarge.)


"If you make a transaction, the onus will be on you to report it," said certified financial planner Samuel Boyd, senior vice president of Capital Asset Management Group in Washington, D.C. "Those transactions generate either short-term capital gains or losses or long-term capital gains or losses."

For many investments, individuals generally receive a Form 1099 that shows their taxable gains. The form also is sent to the IRS, which gives the agency a way to identify any differences in what's reported between brokerages and taxpayers.

The IRS has ruled that even if you get no official notice of your taxable gains, the agency wants its share. On Wednesday, a U.S. District Court judge in California ordered Coinbase, a popular platform for buying and selling bitcoin and other cryptocurrencies, to turn over identifying information on accounts worth at least $20,000 during 2013 to 2015. It's unclear whether the exchange will comply or contest the ruling.


The order, which affects about 10,000 accounts, is a narrowing of an earlier effort by the IRS. In a blog on the Coinbase website, the company notes that the first request would have impacted another 480,000 accounts.

The court case arose after the IRS found that for in each year from 2013 to 2015, only about 800 taxpayers claimed bitcoin gains. During that time, the cryptocurrency rose to $430 from about $13.

So how do you determine what you owe?

If you held it for one year or less, it is a considered a short-term gain and is taxed as ordinary income. Depending on your tax bracket for 2017, that could range from a tax rate of 10 percent to 39.6 percent.

"It might seem innocuous and veiled and like no will follow up, but records of those transactions are available."
-Samuel Boyd, Senior vice president of Capital Asset Management Group
Any bitcoin you sold or spent after owning it for more than one year is taxed as a long-term gain. Taxable rates on those gains range from 0 percent to 20 percent, with higher-income households paying the highest rate.

In a nutshell, although bitcoin and its brethren are often viewed as being anonymous, not reporting your gains could be viewed as tax evasion by Uncle Sam.

"I've told clients who own it that it's up to them to track their cost basis, their holding period and their sale price," Boyd said. "It might seem innocuous and veiled and like no one will follow up, but records of those transactions are available."

https://www.cnbc.com/2017/11/30/bitcoin-investors-beware-the-irs-wants-its-cut-and-you-may-not-know-it.html


Bitcoin moves back below $10,000 as volatility persists
Bitcoin prices were whipping around again on Thursday, with prices swinging to above $10,000 and back below a day after a volatile session potentially exacerbated by exchange outages.

The price of bitcoin BTCUSD+2.18%  was down over 4% to $9,737.02 after trading above $10,000 in Asian trading hours, according to CoinDesk. That volatility came a day after the price of a bitcoin soared above $11,000 in early New York trading, then slumped by $2,000, only to recover to around $9,655 by late afternoon.


What looked like a minicrash for the cryptocurrency was attributed to a partial outage on digital currency exchanges such as Coinbase.com, that left some holders of bitcoin unable to access their accounts.

Coinbase updated clients via Twitter on Wednesday evening, explaining that it was “performing maintenance to improve performance under high traffic.”


Craig Erlam, senior market analyst at OANDA, said the sharp tumble for bitcoin on Wednesday was a “clear sign of how easily bitcoin traders can be spooked and the risk this poses,” adding that he expects more of the same such volatility.

“Still, prices remain extremely elevated, despite dropping back below $10,000. While dips have been frequent and at times aggressive, it is notable that they have until now been viewed as buying opportunities prompting quick rebounds. This is helped by the fact that the foundations of bitcoin as a tradable asset are improving but the speculative component can’t be ignored and will likely continue to play a major role in the medium term,” added Erlam.

https://www.marketwatch.com/amp/story/guid/23BA9CE0-D5C7-11E7-8D62-D390C6ECDC65


Bitcoin is 'going mainstream,' billionaire investor Mike Novogratz says

Bitcoin’s most recent, volatile 24 hours -- during which it lost more than a fifth of its value after hitting an all-time high on Wednesday -- was largely unconcerning to hedge fund legend Mike Novogratz, who painted a picture of a young cryptocurrency still adjusting to its extraordinary popularity.

“It speaks to the fact that this is still a young industry, a second or third grader growing up. And so the infrastructure really needed to catch up,” Novogratz, CEO of Galaxy Investment Partners, told FOX Business’ Liz Claman.

The cryptocurrency was trading near $9,610 late Thursday, with a daytime high hovering above $10,600, according to CoinDesk. On Wednesday, bitcoin prices fell more than $1,000 in the span of about 10 minutes, after setting an all-time high above $11,000 -- spurring some concern about its volatility. Others, however, attributed the fall to outages in bitcoin exchanges and the heavy price surge this week.

“It’s got me a little bit nervous as [a] speculator when you see that much of a frenzy, you’ve got to be a little nervous on price,” he said. “But bitcoin is going mainstream.”

Virtual currencies have been at the epicenter of debate this year, with some business moguls criticizing bitcoin as a “bubble about to burst.” CEO of JPMorgan Chase (JPM) Jamie Dimon labeled bitcoin a “fraud,” while other executives have suggested it could be the currency of the future.

During Wednesday’s frenzy, Novogratz, who started a new bitcoin fund, sold some of his shares, though he declined to say how much. And despite uncertainty about the future of bitcoin and other cryptocurrencies, he suggested that retail investors place 2% or 3% of their net worth into it.

“I think the whole space will be far higher a year from now, and a lot higher five years from now,” he said.

During the White House press briefing, press secretary Sarah Sanders said the Trump administration, including the Department of Homeland Security, is monitoring bitcoin, which remains largely unregulated. That news was unsurprising to Novogratz, who speculated that the Federal Reserve and the Treasury Department have likely also monitored bitcoin.

“Our experience so far is that U.S. regulators have been very receptive to the whole cryptocurrency revolution,” he said. “They don’t want to squish innovation. They’re looking at this as an interesting movement.”

http://www.foxbusiness.com/markets/2017/11/30/bitcoin-is-going-mainstream-billionaire-investor-mike-novogratz-says.amp.html


Bitcoin mining consumes more energy than 159 countries

Bitcoin, the digital currency also known as cryptocurrency, has been on an upward trajectory lately. The value of bitcoin broke the $9,000 barrier over the weekend and sat at over $9,800 on Monday evening.

But bitcoin is also making other headlines: The rise in its currency value has given way to a spike in electrical consumption for the powerful computers used to "mine" more bitcoins, according to a new report. Consumption in the last month increased by nearly 30 percent.

In other words, it takes a whopping 29.05 TWh (terawatt hours, equal to one million megawatt hours) annually to operate the energy-hungry computers and networks that power bitcoin transactions. That's about 0.13 percent of total global electricity consumption, according to Digiconomist. That would rank bitcoin as 61st if it were its own country.

Bitcoins worth $100K stolen over public wireless network
Bitcoin mining uses more electricity than 159 individual countries -- including more than Ireland or Nigeria.

Nearly 10 U.S. households can be powered for one day by the electricity consumed for a single bitcoin transaction, according to figures from The Bitcoin Energy Consumption Index.


The Digiconomist report states there are 12 U.S. states that consume less energy than bitcoin mining: Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming.

Digiconomist compared bitcoin's network energy consumption to another payment system like Visa. It reports that bitcoin consumed the equivalent energy of nearly 2.8 million U.S. households, while Visa's consumption numbers around 50,000 U.S. households.

In a video posted on YouTube, the process of "bitcoin mining" is explained -- the computational processes needed to handle transactions and the verification that supports them.


What is Bitcoin Mining? by BitcoinMiningCom on YouTube
Bitcoin prices were $960 at the start of the year. In 2010, they were 8 cents.

Some critics have said bitcoin's soaring price -- and speculation about a bubble and possible crash -- may slow the pace of retailer adoption in the U.S., even as as its popularity seems to climb with the public.

Meanwhile, the technology has some fans. Fidelity Investments CEO Abigail Johnson told a conference earlier this year that she's "a believer," according to Quartz. "I'm one of the few standing before you today from a large financial services company that has not given up on digital currencies," she said.
https://www.cbsnews.com/news/bitcoin-mining-energy-consumption/


Bitcoin $12K? More like: Bitcoin should be illegal, according to Nobel Prize winner
Bitcoin on Wednesday blew past the $11,000 mark just one day after it took out $10,000. Next stop, $12,000? Maybe. Or, if one Nobel Prize-winning economist has it right, perhaps the whole thing will collapse at the hands of the law.

‘Bitcoin is successful only because of its potential for circumvention, lack of oversight. So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function.’
Joseph Stiglitz
One function it has served in a big way is delivering massive profits to its investors. Bitcoin BTCUSD+2.31%  has exploded for a 12-fold gain so far this year, flying in the face of all the critics, like Joseph Stiglitz, who have consistently called for the rally to come crashing down.



Go ahead and add Stiglitz to that chart.

The Columbia professor warned that bitcoin is “smoke and mirrors” and that there could be devastating government crackdown at any moment.

“It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down,” he told Bloomberg in an interview on Wednesday. “We ought to just go back to what we’ve always had.”

https://www.marketwatch.com/story/bitcoin-12k-more-like-bitcoin-should-be-illegal-according-to-nobel-prize-winner-2017-11-29


Bitcoin isn't a currency or even a cryptocurrency, says France's central bank governor

Bitcoin is a speculative asset and people who invest in it do so at their own risk, the Bank of France Governor Francois Villeroy de Galhau warned on Friday after recent volatile trading.

“We need to be clear: bitcoin is in no way a currency, or even a cryptocurrency,” Villeroy said in remarks made at a conference in Beijing, according to the Bank of France.

“It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Bank of France reminds those investing in bitcoin that they do so entirely at their own risk,” he added.

Bitcoin hovered around $9,600 in volatile trade on Friday, after tumbling about 15 per cent from an all-time high hit this week as some money managers warned ominously of a bubble and further falls.

https://www.yahoo.com/news/bitcoin-isn-apos-t-currency-082100286.html


Bitcoin bubble balloons to $11,000 – and even Katy Perry's on board now





Bitcoin has surged to $11,000 just 12 hours after passing the symbolic $10,000 mark, making one unit of the digital currency worth more than £8,200.

It took just three days to rise from $9,000 to $10,000 but its price is now increasing at an even faster rate. Having reached the $10,000 mark early on Wednesday morning it rose by another $1,000 just before 2pm, less than half a day later.

The cryptocurrency has faced criticism from the financial sector and banking leaders, with many comparing it to the dotcom bubble of the early 2000s, which saw technology stocks lose billions in value. One bitcoin is currently trading at $11,363, up from around $1,000 at the start of 2017.

In September, after reaching a then high point of more than $5,000, the volatile cryptocurrency went on to lose almost half of its value in a few days as investors cashed in their profits.

Bitcoin milestones
Bitcoin milestones
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There has been a huge growth in interest in bitcoin, which is by its nature is limited in circulation to no more than 21 million bitcoins. The number of holders of digital wallets, used to store bitcoin and other cryptocurrencies, has increased dramatically. The largest bitcoin storage website, Blockchain.info, claims it has more than 19 million cryptocurrency wallet holders from 10 million at the start of the year.

For most of its life, it has been worth just a few dollars, meaning some of those who became involved in its early days when bitcoin was plentiful are now millionaires.

As many as 3.8 million bitcoins - worth over $40 billion at today's rates - are believed to be lost, according to a recent study of the network. Many people have lost huge sums after forgetting passwords, throwing away hard drives and simply not recalling where they kept them.

Satoshi Nakamoto, bitcoin's mystery inventor who has never been uncovered despite multiple attempts, originally proposed it as a new internet currency that would take power out of the hands of financial institutions and be used as a medium of exchange.

Bitcoin is not controlled by any one entity but operates on the "blockchain", a decentralised network maintained by its users. This means the currency is largely hack-proof and payments are free, but it also poses a challenge to financial regulators. Bitcoin has long been viewed with scepticism by some governments and its lack of regulation makes it popular among online drug dealers and hackers.

While banks and financial services have begun looking at the practicalities of blockchain technology, public figures and celebrities have jumped on the bitcoin bandwagon, most recently American singer Katy Perry.


"The madness of crowds is well documented, but it is quite something to behold in the flesh," said Neil Wilson, senior analyst at ETX Capital. "Whilst this appears like a classic bubble, Bitcoin could have a lot, lot further to run before it blows."

Most of the existing investors are believed to be buying not because they believe in its potential as the future of finance, but because they hope its price will continue to rise.
https://www.yahoo.com/news/bitcoin-jumps-11-000-less-152354754.html


Bitcoin pauses below record peak; gained 55 percent in November

(Reuters) - Bitcoin hovered around $9,600 in volatile trade on Friday, after tumbling about 15 percent from an all-time high hit this week as some money managers warned ominously of a bubble and further falls in the stratospheric cryptocurrency.

Bitcoin was last down around 3.4 percent at $9,612.60 on the Luxembourg-based Bitstamp exchange, from a record peak of $11,395 set on Wednesday. On Thursday, it went as low as $9,000. BTC=BTSP.

The latest slide has tempered an astronomical rise in recent months: Bitcoin had jumped almost 1,100 percent year-to-date on Wednesday. As of 0200 GMT, it was still up around 915 percent.

One wealth manager said technical chart analysis was predicting deeper falls.

"A correction could bring bitcoin back to its previous level of chart support of around $7,500. That's over a 20 percent drop from its current price," said Shane Chanel, equities and derivatives adviser at ASR Wealth.

"Without everyday utility, pure speculation is driving prices at the moment. Traders are forced to use technical indicators to make buy and sell decisions."

Despite its massive fall this week, bitcoin still ended November 54.6 percent higher, its best monthly performance since a near 66 percent gain in August.

The cryptocurrency has posted monthly losses only three times in 2017.


Bank of France warns on bitcoin speculation
Bitcoin's rise has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world, as well as by increasing public awareness.

Several large market exchanges including Nasdaq, CBOEHoldings and CME Group -- the world's largest derivativesexchange -- have said they are planning to provide futurescontracts based on bitcoin.

Bitcoin's rapid ascent has prompted warnings from a streamof prominent investors that it had reached bubble territory.

The deputy governor of the Bank of England on Wednesday said investors should "do their homework" before investing in the digital currency.

Bitcoin investments are seen as mere speculation because demand has skyrocketed without fundamentals backing the cryptocurrency, said Jin Yong-jae, a Seoul-based economist at HI Investment & Securities.

That has made the price of bitcoin "very much volatile," Jin added.

"There are people who invest in bitcoin for its future value, but most seem to be just jumping on the bandwagon, without being fully aware of the structure or how it will replace actual currencies in the future."

Others are unfazed by talks of a bubble, though, predicting still further gains.

"The number of bitcoins that can be mined is limited to 21 million, of which 16.5 million bitcoins are already in circulation," said Siddharth Agarwal, lead financial analyst at research firm GlobalData.

"As bitcoin mining becomes increasingly difficult, this could further drive bitcoin prices upwards."

http://in.mobile.reuters.com/article/amp/idINKBN1DV3J5


All You Need to Know About Bitcoin’s Rise, From $0.01 to $15,000
By Olga Kharif

The initial price of bitcoin, set in 2010, was less than 1 cent. Now it’s crossed $16,000. Once seen as the province of nerds, libertarians and drug dealers, bitcoin today is drawing millions of dollars from hedge funds. The recent price surge may be a bubble. Or it could be a belated recognition by the broader financial community that so-called cryptocurrencies -- digital forms of money -- are going mainstream. It might be time to nail down what a bitcoin is, and why its price has been going through the roof.

1. What exactly is bitcoin?

It’s a form of money that’s remarkable for what it’s not: It’s not currency you can hold in your hand. It’s not recognized by most Main Street stores. It’s not issued or backed by a national government. At their core, bitcoin and its imitators are sets of software protocols for generating digital tokens and for tracking transactions in a way that makes it hard to counterfeit or re-use tokens. A bitcoin has value only to the extent that its users agree that it does.
2. Where did the bitcoin system come from?

The original software was laid out in a white paper in 2008 by a person or group of people using the pseudonym Satoshi Nakamoto, whose identify remains unknown, despite several efforts to assign or claim credit. Online fantasy games had long used virtual currencies. The key idea behind bitcoin was the blockchain -- a publicly visible, largely anonymous online ledger that records bitcoin transactions.
3. How does that work?

Think about what happens if you make an online transfer using a bank. It verifies that you have the funds, subtracts that amount from one spot in a giant database it maintains of accounts and balances, and credits it in another. You can see the result if you log on to your account but the transaction is under the bank’s control. You’re trusting the bank to remove the right amount of money, and the bank is also making sure you can’t spend that money again. The blockchain is a database that performs those tracking functions -- but without the bank or any other central authority.
4. Who performs the bank function for bitcoin?

It’s done by consensus on a decentralized network. Bitcoin transactions can be made through sites offering electronic "wallets” that upload the data to the network. New transactions are bundled together into a batch and broadcast to the network for verification by so-called bitcoin miners.
5. Who gets to be a miner?

Anybody, so long as you have really fast computers, a lot of electricity and a desire to solve puzzles. The transaction data in each batch is encrypted by a formula that can be unlocked only through trial-and-error guessing on a massive scale. The miners put large-scale computing power to work as they compete to be the first to solve it. If a miner’s answer is verified by others, the data is added to a linked chain of blocks of data and the miner is rewarded with newly issued bitcoin.
6. How does the system prevent cheating?

Because every block contains data linking to earlier blocks, an attempt to spend the same bitcoin twice would mean revising many links in the chain. Plus, as miners compete, they verify each other’s work each step of the way.

7. Wasn’t bitcoin used by drug dealers?

Yes, back when its primary appeal was its relative anonymity. It was, and still is, used by websites peddling everything from arms to drugs to paid hits. One such $1.2 billion marketplace, Silk Road, was shut down by federal agents in 2013. But others soon took its place. Joseph Stiglitz, a Nobel laureate in economics, said recently that bitcoin "ought to be outlawed” because it’s designed to evade regulation and "doesn’t serve any socially useful function."
8. What changed?

Bitcoin’s reputation has improved, partly because there are fewer large-scale thefts like the one in 2014 in which bitcoins were stolen from a bitcoin exchange called Mt. Gox. (Security has improved, but it’s still an issue.) And many technology and financial firms grew interested in blockchain as an idea separate from bitcoin.
9. What is blockchain’s appeal?

Enthusiasts see it as a new way of doing all sorts of business. Costs could be lower without a central middleman doing the work of keeping track of transactions, and charging for it. Banks and stock exchanges have invested heavily in developing blockchain technology, while retailers like Wal-Mart Stores Inc. are experimenting with using blockchain for ensuring food safety. Central banks are even speculating about issuing blockchain-based official currencies. And other forms of blockchain emerged, often using their own cryptocurrencies to facilitate transactions. The most prominent is the etherium blockchain, sometimes described as a platform for so-called smart contracts.
10. Why hasn’t the competition hurt bitcoin?

As the number of cryptocurrencies and tokens multiply -- they now reach into the thousands -- bitcoin remains the best-known, time-tested and valuable. That’s led to it being viewed by some as the most predictable venue for people wanting to bet on blockchain’s exponential growth.

11. What explains the surge in bitcoin’s price?

New investors, and expectations of many more to follow, has increased the price of a bitcoin about 11-fold so far this year. CME Group and other exchanges plan to offer bitcoin futures contracts, potentially expanding bitcoin’s appeal. The fact that bitcoin’s software guarantees that there will be a finite supply has added to the fear of missing out for some investors. Coinbase, a bitcoin exchange, was overwhelmed by two to three times its normal traffic on Nov. 29, when bitcoin’s price soared past $11,000, making its service temporarily unavailable to some users. New crypto-focused hedge funds are opening up weekly, and already surpass 100. Most of them invest at least part of their funds in bitcoin.

12. Is this a bubble?

Possibly. Some people, most notably JPMorgan Chase & Co. Jamie Dimon, call bitcoin a “fraud.” Yet his own bank is considering offering bitcoin futures to clients. Fund manager Mike Novogratz calls cryptocurrencies “the biggest bubble of our lifetimes,” and yet he is starting a $500 million fund to invest in them. Depending on whom you talk to, bitcoin’s value could double again -- or it could go down to zero.
13. How can I buy bitcoin or invest in it?

There are a bunch of ways, all with different risks. People can buy the coins directly from exchanges like Coinbase. Accredited investors can also invest in vehicles like the Bitcoin Investment Trust, which tracks bitcoin’s price. Soon investors will be able to invest through their regular brokers in bitcoin futures, and possibly in bitcoin exchange-traded funds, once regulators feel comfortable with the idea. But be warned: Even plenty of people who believe in bitcoin’s future think some wild rides lie ahead. As if in proof, the Nov. 29 surge to over $11,000 was followed by a 20 percent drop. And yes, you can bet on a crash.
The Reference Shelf

A QuickTake explainer on bitcoin and blockchain.
When might bitcoins be an accepted way to buy Big Macs?
Bitcoin might be a bubble, but blockchain is a real breakthrough, says a Bloomberg View editorial.
A QuickTake Q&A on potential splits in the bitcoin software community.
A QuickTake Q&A on initial coin offerings and cryptocurrencies.
CoinDesk has a Bitcoin price index; Bitcoincharts.com has a range of data.
Two explainers, one aimed at kindergartners and the other a you-too-can-mine-bitcoin project, plus an exploration of the double-spending problem.