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Bitcoin soars above $17000, boosting worries and a worldwide frenzy

09 December 2017

The best-known cryptocurrency has had a great deal of expectation surrounding it since it was first created in 2009. Will owners of bitcoin have to pay higher fees to process transactions? He told Reuters that the compromise was highly professional and involved "sophisticated social engineering"-and led to the loss of 4,700 bitcoins".

"RBI or any other regulator is yet to classify bitcoin and we are not sure if this gets classified as asset, currency, commodity, equity or just a digital file".

The latest price increases have come as bitcoin increasingly has been recognized as a legitimate form of currency. Bitcoin is one of more than 1,000 cryptocurrencies and many people use cryptocurrencies to bank or to transfer money or make investments.

The most common way to buy the currency is to download a broker app such as Coinbase and Blockchain. Transactions are verified on network nodes and recorded in a public ledger, or blockchain.

Economists have compared bitcoin's meteoric rise with past bubbles, such as the tulip mania of the 17th century and the dotcom bubble that began in the late 90s with the Nasdaq index in NY and burst in 2000. Only buyers and sellers- rather than the central bank of a government - can change its value.

"The people who started to use bitcoin years ago were those that couldn't use anything else", said Nicolas Christin, a security researcher at Carnegie Mellon University.

Analysts said the launch slated for this weekend of bitcoin futures by Cboe Global Markets Inc's (CBOE.O) Cboe Futures Exchange, one of the world's biggest derivatives exchanges, was helping drive up the price on expectations it would draw more investors to the market. Hackers remain a threat and sometimes bitcoins just disappear after their owner forgets or loses the passwords for their accounts.

Bitcoins in circulation has reached almost $305 billion market value, according to Coinmarketcap, a trade website. Jamie Dimon, chief executive of JPMorgan Chase, the largest bank in the United States, has dismissed bitcoin as a "fraud". "You don't know what their security is like behind the scenes", she said.

The total value of all bitcoins released into the system so far has now reached as high as $283 billion.

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"There is admittedly a lot of speculation in this market", he said.

Until now, investors who want to wager on bitcoin prices in traditional ways have had to do so in Europe or Asia.

Big institutional investors such as hedge funds and assets managers have largely stayed on the sidelines.

Digital currency might be easier to gain than physical currency.

William Dudley, president of the Federal Reserve Bank of NY, recently said he remained cautious about the digital currency, saying it was not a "stable store of value and it doesn't really have the characteristics that you'd like to have in a currency". Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on crosstown rival CME Group's platforms later in the month.

"Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days".

"Put up the sign from Dante's Inferno - "Abandon hope all ye who enter here" - I think that's probably what's needed", he said speaking on Bloomberg TV, adding that the cryptocurrency appeared to be a "frothy investment bubble". Many people consider bitcoin to be more of a speculative instrument than a currency, because of its volatility, high transaction fees, and the fact that relatively few merchants accept it.

I base this prediction largely on the growing barriers I see to bitcoin's emergence as a payment tool, obstacles that revolve around the two issues described below.

Is it safe to buy Bitcoin?

Bitcoin soars above $17000, boosting worries and a worldwide frenzy