Digital currencies - Virtual, but real
In fact, they are crypto-currencies that have emerged in the wake of the best known digital currency of all — Bitcoin.
Created in 2009, Bitcoin reached an all-time high above $11,000 yesterday and has increased more than 10-fold in value so far this year.
Such investment mania has an historical precedent in the shape of the tulip craze of the 1600s in the Netherlands when speculation drove the value of bulbs to extremes.
Critics describe Bitcoin’s soaring value as a classic speculative bubble with no relation to real financial market activity or the economy.
JP Morgan boss Jamie Dimon even labelled the currency a fraud and threatened to fire his employees if they were caught trading it.
Fraud or not, a growing number of recognised businesses now allow customers to buy goods and services with Bitcoin, including multinational firms like Microsoft and travel booking site Expedia.
Bitcoin may be virtual — but it’s also real.
