Bitcoin is a digital cryptocurrency based on a peer-to-peer network, which is designed to allow to quickly transfer arbitrary amounts of currency units (i.e., money) to anybody in any region of the world without having to pay excessive amounts of fees to payment processors. During March and April 2013, the exchange rate of bitcoins (short: BTC) dramatically increased from about 25 EUR/BTC to over 180 EUR/BTC. The market capitalization of bitcoin recently hit the $2 billion mark on April 10, just before the bubble burst.
In this article, I will discuss people’s motivation to consider bitcoins as a worthwhile investment and why many proponents consider cryptocurrencies superior to traditional fiat currencies. Finally, I will point out a technical design flaw in bitcoin, which I consider to be crucial enough to deem bitcoin currently an unsafe long-term investment.