In another volatile year for global currencies, one has stood head and shoulders above the rest.
It isn’t a traditional currency such as the US dollar, Japanese yen and certainly not the British pound.
In fact, this year’s big winner isn’t a currency at all in the traditional sense, but a digital currency, otherwise known as a cryptocurrency – the Bitcoin.
Bitcoin began the year priced at around US$430. By October 12, the price had risen to $641, a rise of almost 50 per cent.
This is no flash in the virtual pan. In January 2011, you could buy a Bitcoin for just 25 cents. Growth since then has been a spellbinding 2,564 per cent, reaping large rewards for early adopters.
That isn’t bad for a paperless currency that exists only on computers, with none of the traditional underpinnings and the security of a state, government, central bank or regulatory authority.
No wonder ordinary investors have been sitting up and taking notice. Is this something you should be investing in?
Before you even consider investing in Bitcoin or any other digital currencies that have followed in its wake, such as Litecoin, Namecoin and Ethereum, you have to understand what it is and how it works.