Published On: Thu, Sep 14th, 2017

What is Bitcoin? Everything you need to know about the cryptocurrency | City & Business | Finance

Bitcoin is nothing more than a ticking time bomb, according to the head of America’s most powerful investment bank.

Jamie Dimon, chief executive of JP Morgan, said that the digital cryptocurrency is bound to collapse because “it’s a fraud”.

Speaking at a press conference in New York, Mr Dimon went as far as threatening to fire any of his employees caught trading in bitcoin.

The banking chief argued that the currency was worse than the tulip bulb craze of the 17th century and that someone was going to get killed over it. 

But the stark criticism was refuted by Naeem Aslam, chief market analyst at Think Markets UK, who said that Bitcoin is here to stay for good.

Mr Aslam said: “The digital currency is here to stay and under a more regulated environment, its volatility would ease off. 

“Moreover, this is not the first time that Jamie Dimon has spoken against the currency, the last time he had a similar go on the currency was in November 2015. 

“Since then, the currency has had a remarkable run 

What is Bitcoin?

Bitcoin is the most popular cryptocurrency circulating the internet, believed to be created by a mysterious Japanese software engineer named Satoshi Nakamoto.

What makes bitcoin stand out from other currencies such as the British Pound or US Dollar, is that it does not have a physical token based on the value of gold or silver.

Instead bitcoin’s value and price is determined on is monetary usefulness and the supply and demand for the currency.

Bitcoins are based on mathematical formulas hard-wired into the token, and at any moment in time there can only exist 21 million bitcoins – a rule embedded into the token’s protocol.

However much like hard currencies, tokens are divisible into smaller units up to one hundredth of a million per token, known as Satoshis.

The driving idea behind the creation of bitcoin was having a decentralised currency that was free of banks and government regulations.

Those who chose to invest in bitcoin usually do so because they belive it offers a level of transparency, reliability and anonymity not provided by hard money.

Every single bitcoin trade that ever takes place is visible on an open public ledger which makes it a transparent method of exchanging money.

Bitcoins are obtained by mining them with powerful, dedicated processing machines which break down millions of lines of code to be rewarded with tokens.

Tokens are then stored as codes in wallets, which can operate like digital bank accounts, or simply be written down on a piece of paper.

Since starting, Bitcoin’s price has gradually been on the rise, skyrocketing in the past year to over £3,483 ($4,600) per token.

On the markets, Bitcoin grades under the code BTC.

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