The combined value of all Bitcoins in circulation surpassed $1 billion this Thursday, as the exchange rate for each individual unit of the encrypted digital currency rose above $92. The milestone comes as the total number of Bitcoins nears 11 million and represents a huge jump from the record value of $32 recorded just one month ago. At the time of writing, the currency's market capitalization has dipped back below the billion mark, but small ups and downs are not uncommon — the current rate listed on Mt. Gox, the most popular Bitcoin exchange, is still well above $90.
Bitcoin's rise has not been without problems
While meteoric, Bitcoin's rise has not been without problems — regular hacking attempts and other technical issues continue to damage the currency's reputation, particularly in the eyes of major institutional investors. "I just don't feel comfortable getting involved with something vulnerable to being hacked or manipulated, and with no recompense if it is," one portfolio manager tells IEEE Spectrum. Bitcoin's status as the currency of choice for all sorts of nefarious online activity, from piracy to drug dealing, hasn't helped either.
The currency's most recent price rise is partly attributable to an automatic inflation safeguard triggered in November, when the total number of Bitcoins reached 10.5 million — this system cut the rate that new coins can be minted, or "mined," by half, quickly bumping up their value. But while organs such as The Economist are skeptical about the price's sustainability, it's hard to deny that it represents a swell of optimism among Bitcoin users themselves.