- This beats its previous record of $266 (£165.15) which was set in April
- Bitcoins can be bought with anonymity which supporters say lowers fraud
- Analysts claim the demand is due to increased awareness about its benefits
- It follows the launch of the world's first Bitcoin ATM in Canada last month
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Virtual currency Bitcoin has more than doubled its value in a month reaching a high of $267 (£165.70).
This beats its previous record of $266 (£165.15) set in April, which was followed within a week by a dramatic drop to $100 (£62).
Analysts claim the demand for Bitcoin follows increased awareness about benefits of the currency and a drive to move it into the mainstream.
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Bitcoin transactions are recorded in a virtual public ledger, known as the blockchain. Miners are in charge of maintaining the blockchain. As their computers perform the calculations to do that, the process rewards them with newly minted bitcoins
The digital currency is increasingly being treated like gold, with some investors using it to hedge against currency fluctuations and speculating on its rise.
The current rise follows the launch of the world’s first bitcoin ATM, dubbed Robocoin, in a trendy Vancouver coffee shop.
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The blue and silver ATM machine, which is operated by Vancouver-based Bitcoiniacs and Nevada-based Robocoin, changes bitcoins to Canadian dollars and vice versa.
Users scan their hand to confirm identity, and then funds move to or from a virtual wallet on their smartphone.
The ATM, named Robocoin, allows users to buy or sell the digital currency known as bitcoins. Once only used for black market sales on the internet, bitcoins are starting to be accepted at a growing number of businesses
WHAT IS BITCOIN?
Bitcoin is a distributed peer-to-peer digital currency that functions without any central authority, such as the Bank of England.
The currency was launched in 2008 and is traded within a global network of computers.
Bitcoins can be bought with near anonymity, which supporters say lowers fraud risk and increases privacy.
But critics say that also makes bitcoins a magnet for drug transactions, money-laundering and other illegal activities.
Bitcoins are currently worth around $267 (£165.70).
A bitcoin investor, Norwegian Kristoffer Koch, recently made more than half a million pounds after he forgot he bought £17 of currency four years.
The system limits transfers to $1,000 (£623) a day, in an effort to curb money laundering and other fraud.
Bitcoiniacs, the local dealer that operates the ATM, will roll out four other kiosks across Canada in December.
By the end of 2014, they expect to roll the technology out worldwide.
Bitcoin is not a recognised currency in Canada, so Ottawa's anti-money laundering watchdog, the Financial Transactions and Reports Analysis Centre, does not monitor its trade.
Bitcoins were launched in 2008 and are traded within a global network of computers.
They are not backed by a single company or government, but their release is tightly controlled, mimicking a central banking system's control over the minting of money.
A bitcoin investor, Norwegian Kristoffer Koch, made a huge profit, after he forgot he bought £17 of currency four years.
He recently found out he was sitting on a small fortune now worth more than half a million pounds.
Bitcoins are stored in encrypted wallets secured with a private key. Mr Koch had forgotten his password but when he eventually remembered it he was stunned by how much they had jumped in value.
Bitcoins can be bought with near anonymity, which supporters say lowers fraud risk and increases privacy.
Silk Road, which allowed users to trade in illegal drugs, required transactions to be made using the virtual currency Bitcoin
But critics say that also makes bitcoins a magnet for drug transactions, money-laundering and other illegal activities.
The virtual currency is gaining hold among businesses and consumers, a key step to a bigger role.
‘I think it's definitely going mainstream,’ said Bitcoiniacs co-founder Mitchell Demeter.
‘I think as things progress, and the infrastructure is built, it will become easier for people to buy and sell, and so more people will start using it.’
