Is Bitcoin Worth More than Chocolate Money?
Of course, the whole point of Bitcoin is that there is no formal exchange rate, no gold reserve, no Government backing (or interference). Value – the rate at which a bitoinc can be traded into anything else – is at the whim of exchanges in places such as China, Bulgaria and Slovenia. This puts the crypto-currency at the mercy of traders and speculators.
Opinion of course remains divergent on what will happen next. The Winklevoss twins put a whole load of money into bitcoins, launched a bicoin ETF (exchange traded fund) and predicted the price could rise to $40,000. Alternatively, Mark Williams, a risk management and capital markets professor at Boston University, predicts that the price of one bitcoin will crash to $10 or even lower by the first half of 2014.
Ultimately, the price will only be what someone is prepared to pay. And with Alderney wondering whether to issue hard bitcoins, if the price really does tumble the best use of the coins might be as decoration. At least you can eat the chocolate ones.