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What is Bitcoin, why its price surging and what are the risks associated with it

--Courtesy "coindesk"

Bitcoin is a cryptocurrency and a digital payment system which uses blockchain technology. It is gaining global attention after it is approved by developed nations like Japan.

Over the last few years, Bitcoins has shown steady and steep growth. In May 2016, cost of a single Bitcoin was just $455. It now costs over $1,800 per token.

According to the prices in Coin Market Cap, the annual return on bitcoin is 286%.

It is to be noted that Bitcoin’s price is basically linked to the number of people using the system to send/receive money. However, currently, it is driven by speculations that in future the return on Bitcoin will further increase.

Positive approach toward bitcoins by many counties in the last three months in particular led to increase in demand and annual return. In April, Japan approved Bitcoin as legal method of payment.

However, there are many risks associated with Bitcoins. In late 2013, the cost of one Bitcoin reached over $1,100 which slipped down to a low of $200 in mid-2015.

According to report published in Fortune, there is a long term risk too as Bitcoin is now only one of dozens of implementations of the idea. Innovators with names like Ripple and Dash have already significantly expanded on its features. The price of Ethereum, second largest cryptocurrency has also spiked over the last month.