“As Value Falls, Some Pull Plug on Computers Supporting System.
A rapid collapse in the value of bitcoin is squeezing some owners of the computers that support the digital currency and raising concerns about its viability.
Bitcoin’s value fell 21% to $179.37 late Wednesday, according to news service Coindesk.
The virtual currency, which trades mostly in unregulated overseas markets, has fallen 44% since the start of the year and 85% from the record high of $1,165 it hit in early December 2013. In total, almost $11.3 billion in value has been lost since that peak.
“The people who most believed in the long-term value of bitcoin holdings are the people who got hurt the most,” said Chase Sechrist, a 22-year software developer based in Austin, Texas, who sunk $30,000, or “most of his savings,” into the digital currency, starting “at the top of the summer 2014 hype cycle.” Having lost virtually all of it, Mr. Sechrist says he’ll “be out of bitcoin for quite a while,” at least until it is better regulated, though he still strongly believes in the future benefits of its core payments technology.
The price decline is causing turmoil for bitcoin “miners”—the independent computer owners who confirm and process transactions in the currency. Miners are compensated with freshly issued bitcoins, which in turn are added to the total supply. As the price of bitcoin falls against the dollar and other traditional currencies, the miners’ profits get squeezed.”
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