Bitcoin: Expert discusses recent decline in cryptocurrency value

The cryptocurrency was back with a boom this month after its price rose to a previously unseen high of $ 41,000 (GBP 30,000) on Jan. 7. Despite this surge, it would endure its worst decline in 10 months just days later, leading many economists to criticize the volatile currency’s long-term validity for investors. Bitcoin, which was founded in 2008, uses complex mathematical equations to ensure its supply and transactions for investors.

Serious panic, however, broke out after China claimed to have created a machine that can solve these formulas in minutes and that matches Google’s technological advances.

Google had previously announced that two years ago it had successfully built a “quantum computer” that would enable it to “achieve the performance of a powerful computer in 10,000 years in 200 seconds”.

Forbes’ Billy Bambrough, a cryptocurrency expert, argued that “Bitcoin and its underlying encryption could potentially be damaged” – and ultimately destroyed.

Google’s “quantum superiority” was then mirrored by experts in Beijing, a nation that continues to be aggressive towards decentralized cryptocurrencies like Bitcoin.

Bitcoin Warning: China “May Violate and Destroy Cryptocurrency Security” (Image: GETTY)

Bitcoin has fluctuated in price this year (Image: GETTY)

Your new quantum computer surpasses Google’s capabilities. Chinese researchers said their prototype “took a little over three minutes to complete a task that the world’s fastest traditional computer would take more than 600 million years to complete”.

In a statement, the research team added: “This achievement has firmly established our country’s leading position in international quantum computer research.”

According to the South China Morning Post, a quantum researcher argued that the machine triggered last year was not yet able to decrypt encrypted information such as Bitcoin.

Richard Murray, executive director of London-based quantum computer company ORCA, however, claimed it was only a matter of time.

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Bitcoin was created in 2008

Bitcoin was created in 2008 (Image: GETTY)

He added, “There are still people who wonder if quantum computers will become a reality.

“With two systems [Google’s and China’s] After reaching this benchmark, this argument sounds pretty unlikely. “

Although technology is now starting to dominate discussions in countries like China, technology expert George Gilder told the Mind Matters podcast that Bitcoin is still ahead of the game.

He said, “Quantum Computing is a very special machine.

“You may be able to build [a quantum computer] That can break some form of encryption, but there are many ways to circumvent the threat that quantum computers pose to Bitcoin and other such encryption-based technologies. “

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The Bitcoin Store in Hong Kong will open in 2014

The Bitcoin Store in Hong Kong will open in 2014 (Image: GETTY)

The main concern of investors is whether Bitcoin is actually worth the risk of adding to their portfolio.

As seen this month, given the widespread risk of ups and downs, some investors have claimed they were deterred by the currency, including Gerald Moser, chief market strategist at Barclays Private Bank, who continues to argue against investing in Bitcoin Has.

After Bitcoin’s peak this year, he concluded that it was “next to impossible to predict its price”, making it “almost uninvestable from a portfolio perspective”.

According to Financial News, Moser added, “With volatility spikes many times that typically seen in risk assets like stocks or oil, many would likely toss the cryptocurrency out of any portfolio in a typical mean-variance optimization.”

Still others – including value investor Bill Miller – claim the currency will only get stronger if the price of Bitcoin goes up.

Bitcoin: It is not known who created the currency

Bitcoin: It is not known who created the currency (Image: GETTY)

Mr. Miller said that since it is still in the “early stages of the adoption cycle,” volatility will always go with the currency.

However, as strength increases, the risk associated with investing decreases.

He explained that the total supply of Bitcoin is increasing by less than two percent per year and that “at the price it is evident that demand is growing much faster”.

Speaking to The Exchange on YouTube, Miller Value Partners’ founder and chief investment officer said, “As long as this is the case, Bitcoin is likely to go higher and possibly significantly higher.

“I think Bitcoin … should probably grow 50 to 100 percent from here in the next 12 to 18 months.

“And if you asked me above or below, I would definitely say that it’s much more likely that it’s higher than lower.”

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The UK’s Financial Conduct Authority (FCA) has issued its own warnings regarding the currency.

It said, “When consumers invest, they should be ready to lose all of their money.

“Some investments that advertise high returns on crypto assets may not be subject to regulation beyond the fight against money laundering.

“Considerable price volatility combined with valuation difficulties [Bitcoin] Reliably expose consumers to a high risk of loss. “ does not provide financial advice. The journalists who worked on this article do not own Bitcoin.