Bitcoin clears $1,000 barrier - but why is this radical alternative currency worth so much?

The crytocurrency Bitcoin has just breached the psychologically significant $1,000 level.

Many have compared the virtual currency's rise to the tulip bulb mania of the 1600s. It suffered a severe correction in April when it lost more than half of its value in days after climbing to over $220.

The unconventional means of exchange has since recovered and soared. The currency offers several benefits over traditional state operated currencies. It's anonymous, there are no transaction costs, and no central bank that could deflate away your Bitcoin wealth.

But it's still not anywhere near wide acceptance. Not many people even understand how it works - and the creator is a mysterious figure. Promotions that allow shoppers to use Bitcoin for Black Friday deals have led many investors to believe that now is the time for Bitcoin.

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