Things to know about Bitcoin

Like any other currency, it fluctuates. But unlike most real-world units, Bitcoin’s value has swung wildly in a short period.

When it first came into existence it was worth a few US cents. Several years later Bitcoin topped $1,000. It’s now worth more than $2,300, with commentators suggesting some are buying it as an alternative bet in times of global economic uncertainty.

The chaotic withdrawal of high-value notes in India, and Chinese controls on the purchase of foreign currency have also been cited for its meteoric rise.

There are presently more than 16 million units in circulation. Some economists say the limited number of Bitcoins mean its price will increase over the long run, making it less useful as a currency and more a vehicle to store value, like gold.

But detractors point to Bitcoin’s volatility, security issues and other weaknesses as flaws that will eventually undermine it.

What’s the future?

Some commentators say that like many technological developments, the first iteration of a product will encounter difficulties, possibly terminal ones. But the trail it blazes might smooth the way for the next crypto currency.

Problems include an apparent vulnerability to theft when Bitcoins are stored in digital wallets.

A major Hong Kong-based Bitcoin exchange suspended trading last year after $65 million in the virtual unit was reportedly stolen by hackers.

The virtual currency movement also faces legitimacy issues because of the way it allows for anonymous transactions — the very thing that libertarian adopters like about it.

Detractors say bitcoin’s use on the underground Silk Road website, where users could buy drugs and guns with it, is proof that it is a bad thing.

If Bitcoin does become more widely accepted, experts say, it could lead to more government regulations, which would negate the very attraction of the concept.