The Austrian
capital Vienna has its first 'Bitcoin bank', located on the popular Mariahilfer
Strasse shopping street. Customers can exchange cash for Bitcoin, and find out
information about the digital currency.
In January Bitcoin saw its value top $1,000
(€940) for the first time in three years after it ended as the best-performing
currency of 2016. However, on February 9th its value fell dramatically,
although it recovered quickly.
Analysts attributed the January high to
increased demand from China, which is where most Bitcoin trading takes place.
Bitcoin relies on web-based transactions handled
across thousands of computers and is used as an anonymous way to move money
globally. Magdalena Isbrandt, managing director of Bit Trust says the
advantages of the digital currency are that transactions "are simply much
faster and can be done without a middleman.”
There are no fees or bank involvement but the
secrecy surrounding the currency have led some to question its stability and
transparency. The value of Bitcoin has been volatile since it was first
launched in 2009. Like all currencies, its value is determined by how much
people are willing to exchange it for.
To receive a Bitcoin, a user must have a Bitcoin
address - a string of 27-34 letters and numbers - which acts as a kind of
virtual post box to and from which the Bitcoins are sent.
Since there is no register of these addresses,
people can use them to protect their anonymity when making a transaction.
Andreas Petersson of Bitcoin Austria says this
is an advantage: "If I pay online with Bitcoin, I have a certain level of
privacy. The vendor does not have my credit card number. If I pay for purely
digital goods, like computer games, I have a much better feeling as I’m not
handing over all my private data."
However, for Gabriele Zgubic of
the Vienna Chamber of Labour, the currency holds too many risks. “It is subject
to strong fluctuations, which could mean you end up losing money. There’s also
the security risk, as it’s very attractive to hackers, and you have to be aware
of the security on your smartphone. As it’s an unregulated currency, if you do
get hacked, there’s no one you can claim compensation from.”
Last year,
Switzerland's national rail service (SBB) launched a new service selling Bitcoin at all ticket
machines across the country.
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