Bitcoin revisited: beware the bubble

I’ve written about Bitcoin before, warning that I was worried about volatility and botnets.

Bitcoin has been on my mind again, lately, due to a big bubble spurred in part by the Cyprus financial crisis, worries that Linden Dollars might see increased regulation, and aKaspersky Labs report about botnets being used for Bitcoin mining.

A botnet is what you get when a hacker hijacks a bunch of innocent but badly secured computers and and makes them do his bidding. They’re typically used to send out spam or click on ads but are now also being used to create new Bitcoins. According to reports, a single botnet can make up to $2.7 million a year by cranking out Bitcoins.

The volatility in particular is problematic for grids considering accepting Bitcoin either as payment for land and virtual currency, or as a replacement virtual currency for in-world transactions.

The value of a single Bitcoin has gone from $30 in 2011, down to $3, to over $170 today.

Read full article at Hypergrid Business.