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December 01, 2018, 01:54:36 PM |
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Bitcoin is a financial UFO. Launched in the aftermath of the 2008 crisis, its designer's objective was to create a digital currency whose operation would be dematerialized and independent of banks and governments. Bitcoin is in fact only one of the modalities of the blockchain that refers to a decentralized computer protocol that records each transaction (amount, sender, recipient) in a theoretically tamper-proof and unforgeable manner on a digital ledger. One of the major advantages of Bitcoin is the savings in transaction costs without the intermediary of banks. Bitcoins are issued during the transaction validation process by so-called "miners". They provide the computing power of their computers and receive bitcoins in return.
Like all financial instruments, its price is determined by the match between supply and demand. But as the market authorities point out, Bitcoin is not legal tender, because it is not strictly speaking a currency. The value of a bitcoin also comes from the fact that its quantity is in principle limited to 21 million units.
Bitcoin doesn't pay off. Only the increase in the price can enrich its holders. And this price is particularly volatile. This is reflected in its steep fall this year: since January, its value has fallen by 60%. In 2017, its value exploded by more than 2,000% to nearly 16,000 euros. By way of comparison, the price of an ounce of gold has fallen by 1.2% since 1 January 2018 when the CAC 40 granted a 6.23% discount (as at 23 November 2018).
But this volatility that characterizes Bitcoin is precisely what attracts many speculators. Since its creation - and despite the recent very large correction - its value has risen from a few cents to nearly 3,500 euros today. Those who bet on Bitcoin are also betting on its democratization and the associated upside potential.
In addition to those related to price volatility and the very relative reliability of certain platforms, it should be recalled that the purchaser of this type of asset has no recourse in the event of a problem. The purchase or sale of bitcoins and the investment in bitcoins are currently carried out outside any regulated market. Bitcoin is one of the assets, sometimes wrongly referred to as virtual currencies' or'cryptomones', that currently exist in the world. It can be exchanged online and is not materialized by any part or note. It is not legal tender unlike currencies issued by central banks. There are risks of piracy of bitcoin portfolios. Warnings not to be overlooked.
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