Tag Archives: Crash

NEW YORK (AP) — Bitcoin, the virtual currency composed of digital bits, is based on cutting-edge mathematical schemes that guard against counterfeiting. But it’s also based on an old idea, now dismissed by mainstream economists, about how a currency should operate – an idea that could be setting bitcoins up for an abrupt plunge.Bitcoin was started in 2009 as a currency free from government controls, an entirely digital means of exchange for a digital age. It’s a rapidly growing phenomenon that has taken root as a payment method on some websites for both legal and illegal goods.Each “coin” has been worth less than $10 for most of the currency’s history, but this week the value surged past $200 – with the recent bailout crisis in Cyprus seen by many as one of the triggers of the surge. Wednesday saw a “flash crash,” as the value dipped close to $100 before recovering.The meteoric rise in value is also linked to what some economists say is the biggest problem with the currency: that the supply of bitcoins increases only slowly, at a rate that’s coded into the system.Continue Reading… … Read More