Thursday, 9 June 2011

Bitcoin Economic bubble ready to pop?

Taking a quick turn of my usual blogging angle i'm going to talk about the huge bitcoin economic "bubble" that has formed.

So, In case you haven't noticed. Bitcoins are a form of online currency and in the last week, their value has shot through the roof.

"Bitcoin mining" Using your GPU (or CPU) to solve hashes to produce bitcoins, has just become very profitable indeed. People with bitcoins are now easily selling them for $30 a piece. Many miners on youtube have made videos of them selling 200-300 bitcoins for thousands.

But, will their value hold? Is it wise to sell now, or wait another week for the value to increase? The truth is nobody knows, but a lot of experts are expecting the value of bitcoins to drop in the coming days.

The picture below shows  a comparison of the current bitcoin status to a previous economic bubble and the phases it goes through.