If you don’t own any Bitcoins, you’re going to be wishing you did today. The world’s most popular digital currency has jumped to over $1,000 per Bitcoin repeatedly over the past 24 hours. At the time of this writing, Bitcoins are currently trading at about $1,050 on Bitcoin exchange Mt. Gox.
The jump above $1,000 is more than just a symbolic benchmark for Bitcoin, which has only been in existence since 2009 – it’s making a lot of early adopters very, very rich. As of January of this year, a single Bitcoin could be purchased for just $13. The currency hit a high water mark in April, when it rose to $238 before falling back to between $84 and $100. Since the beginning of November, however, the price of Bitcoin has risen steadily from just under $200 to its high point today.
The meteoric rise of Bitcon’s value follows positive reception to the digital currency from the U.S. government, which debated how to deal with regulating the online money at a Senate hearing earlier this month. Regulators’ willingness to allow Bitcoin to operate within the U.S., and a surge of investors in China, are seen as a major reasons for the most recent surge.
Unlike normal banks, Bitcoin wallets – used to store the digital currency – are public, and the amounts within them are known to all. This allows anyone to get a sense of just how much money the wealthiest Bitcoin users have. At the time of this writing, the richest Bitcoin wallet currently contains more than 100,000 Bitcoins worth more than $100 million.
There are currently just over 12 million Bitcoins in existence, putting the total current value of all Bitcoins at more than $12 billion – a lot of money for a currency based on an open-source algorithm and a dream, but nothing compared to what’s in the vaults of even a single major U.S. bank. The Bitcoin algorithm is designed to eventually stop creating Bitcoins entirely – making it more akin to a finite resource like gold than printed dollars – meaning there will only ever be about 21 million Bitcoins in existence.
Despite the current success of Bitcoin – in fact, because of it – some believe the digital currency, which is controlled by no single entity as other currencies are, will fail. As Reuters economics editor Edward Hadas recently wrote for NYTimes.com, the reason Bitcoin is successful is because no governments have figured out a way to control it. Once they do, he argues, it will all come crashing down. Bitcoin believers, on the other hand, see the currency as the most important system to come along since the Internet. Who’s right? Only time will tell. But for today, anyone with even a single Bitcoin is surely patting themselves on the back.
To learn more about Bitcoin, check out our guide here.
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