Bitcoin Digital Currency Booming In Cyprus Amid Banking Crisis, Virtual Money Surging In Popularity

  @ZoeMintzz.mintz@ibtimes.com on March 27 2013 8:08 AM

The Bitcoin is getting a boost during Cyprus’ banking crisis.

The emerging digital currency has no physical form and functions with few regulations. In the past two weeks the value of 1 Bitcoin jumped from $40 to $72, mostly due to worried European investors buying up the currency in the face of Cyprus’ economic woes, ABC News reports.

The currency is becoming so popular that Cyprus might soon be home to the world’s first Bitcoin ATM, Jeff Berwick, a Canadian investor, announced Monday in a blog post. The machine would have software that would allow a two-way exchange on the Bitcoin market, according to a statement.  

Reacting to the Cypriot crisis, where the nation’s banks have been closed since March 15, Berwick sees Bitcoin ATMs as an attractive solution to bank holidays and closures.

“If these people had simply bought bitcoins with their savings, not only would they currently have 100% access to their funds, but also they would have enjoyed a parabolic move to the upside over past months,” he wrote, citing the banking problems in Spain, Greece, Italy and Cyprus.

Buzz surrounding the growing Bitcoin outlines the currency's appealing qualities.

The Bitcoin functions without the regulations from a central organization or authority, it’s portable and it’s as universally accepted and accessible as the Internet. Bitcoin Magazine describes it as a commodity akin to gold.

The publication points to a long list of what Bitcoin owners can buy with the digital currency, which includes buying and selling online games, music downloads or even supporting a favorite Reddit user.  

And although Bitcoin looks appealing in the midst of Cyprus’ cash shortages, the currency has safety issues of its own. It has been used on the black market to sell illegal drugs and has experienced technical glitches.

But it doesn’t look like Bitcoin is going anywhere.

Nicholas Colas, chief market strategist at ConvergEx, described Bitcoin as having “a breakthrough moment,” adding that if Bitcoin were a country, its annual gross domestic product would compete with a dozen World Bank-recognized countries, Fox News reports. Bitcoins are now valued at $800 million, according to the news outlet.

A pizza purchase back in 2010 is believed to be the first real-world Bitcoin transaction, according to Motherboard. At the time, a computer programmer in Florida spent 10,000 Bitcoins, which translated to $25, to buy a Papa John’s pie.

Since the recent economic crises in countries like Greece and Cyprus, Europeans have responded by buying tons of Bitcoins. Now, that same pizza would be worth $750,000.  

Interested in getting your digital hands on some Bitcoins? Lifehacker offers an extensive explanation on the virtual currency. Learn more here.   

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