Created in 2008, the digital currency uses digital encryption and a so-called blockchain database that records ownership and allows for quick and anonymous transfer of funds outside of conventional payment systems. But in the last few years, traditional payment platforms, including PayPal and Barclays Bank, have moved to accept bitcoin transactions.



The evidence suggests that few of the users are buying bitcoin to utilize it as a means of exchange, but are speculating to increase their capital.



"What's happening right now has nothing to do with bitcoin's functionality as a currency – this is pure mania that's taken hold," said Garrick Hileman, a research fellow at the University of Cambridge's Judge Business School.



"This is very much a bubble that will very much correct itself at some point and people need to be very careful."