The price of bitcoin has hit its highest level in more than two years due to a rule written in the cryptocurrency’s code which could tighten its supply and as it becomes a safe-haven bet amid broader macroeconomic worries.
Bitcoin briefly broke the $700 barrier on Monday, the highest since February 2014. In the last month, the price of digital currency has risen over 51 percent.
An upcoming shift in the fundamental code governing the digital currency is said to be behind the spike. There is a finite supply of 21 million coins that will ever be released. Bitcoins are created by a process known as “mining”. This involves people using computers to solve complex mathematical puzzles in order for a bitcoin transaction to go through. When this problem is solved, the miner is awarded with bitcoins.
But over the course of a bitcoin’s life which began in 2008 as a white paper before coming into existence in 2009, these mathematical problems get harder. And the reward offered to miners is set to reduce sometime next month. At the beginning, the reward for mining was 50 bitcoin per “block” – which is a group of transactions. It