Bitcoin Currency Part 5

Business Insiders British editorial editor Jim Edwards writes that bitcoins' illiquidity can be a huge problem when the bubble bursts. When all investors go out at the same time through an extremely narrow emergency exit, it becomes panic, he says. The graph below shows how the waiting times for transactions have increased as the bitcoin price.

           

Environmental villain. According to the Bitcoin Energy Consumption Index, which measures the amount of energy used to wreck, or "mine" bitcoin, crypto currency now extinguishes more energy than 19 different European countries, including Denmark.

 

The reason for the amount of energy is the complex algorithms like bitcoin "miners" must solve, which requires more computer capacity. Other problem areas have emerged during the year, not least hacker attacks against large bitcoin brokers - which resulted in thousands of people losing their holdings in the currency.

 

Time for ETF. Whatever the Bank tops on Wall Street, interest in investors and stock exchanges worldwide has flourished this year. There are now hundreds of hedge funds actively speculating in bitcoin.

 

Earlier in December, Chicago-based brokerage agency CBOE launched the world's first bitcoin futures, ie securities that allow people to speculate in crypto futures price movements without actually owning them. The interest should have been great, but many are the ones who ask what happens if a bubble hits a derivative market, which, in line with Lehman crash 2008, may manifestly worsen the consequences of a possible price crash.

 

The week after CBOE, the broker CME Group followed up with its own futures contracts.

The CBOE has recently followed up its futures launch with the application to the Securities and Exchange Commission (SEC) to release six different ETF instruments that will shadow bitcoin futures.