Scoop: Mapping the Bitcoin
It can be difficult to keep track of Bitcoin's position in the financial market. Here's how it's done.
Bitcoin is the world’s first successful digital currency, and it has baffled journalists and economists since its inception four years ago.
Both volatile and potentially dangerous because of its unpredictable fluctuations and anonymous transactions, it has nonetheless attracted investors worldwide, many of whom are now pouring money into it. In fact, just earlier this week its value rose to $750 on the Mt. Gox Bitcoin exchange - its highest point ever.
The Bitcoin Exchange Map
With no serial numbers to trace Bitcoin and no central bank to manage its flow, it can be difficult to keep track of the digital currency’s position in the financial market.
To help simplify it for us, fiatleak.com has created a real-time Bitcoin Exchange Map.
It cleverly pulls in data from a range of Bitcoin exchanges such as Mt. Gox, Bitstamp, BTCChina, BTC-E and Bit2c, and uses small gold coins to represent each trade from a global currency into Bitcoin.
At any point in time, it allows us to see which countries are investing in the virtual currency and by how much. The more coins that move, the larger the amount being invested.
A Chinese lead
The reaction to Bitcoin has varied considerably across the world: Finland has accepted it as a completely legitimate currency while Thailand has banned it, probably from fear of a repeat of the Silk Road scandal.
The US lies somewhere in the middle as it recognises the dangers but aims to find a safe regulatory system for a currency that could bring prosperity.
In terms of level of investment, however, China has taken a clear lead despite its lack of regulatory system. By spending time watching the map you will notice this, and many analysts actually consider its popularity in China to be the sole cause of Bitcoin’s recent success. They argue that such a trend is bound to emerge in a financially repressed and undemocratic country.
Why? Because it’s difficult to get money out of China without a considerable transaction cost, and Bitcoin circumvents the problem entirely. In addition, unlike in the majority of western countries investing in Bitcoin on a large scale, there are some mainstream computer technology companies in China that accept Bitcoin as payment.
Bitcoin Mining
The other important part of the Bitcoin process is mining: the creation of the currency through computer-generated encryption codes. The first person to hack the encryption becomes the owner of that particular Bitcoin. The danger is that someone successfully hacks the code before it reaches its intended recipient.
If someone created a map that showed where the codes were being generated and where they were being hacked, it would help us put the two halves of the Bitcoin story together.
