Should you invest in bitcoin?

In Bitcoinland there are no rules, nor anyone to enforce them. Bitcoin is the biggest and best known of more than a thousand so-called cryptocurrencies.

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“Crypto” means they are secured and traded using cryptography, and their existence depends on complex computer algorithms. In that sense they are not real at all. Supporters reply that the money in your bank account is also just bits in a computer.

Unlike major currencies supported by governments, Bitcoin is hugely volatile. As I write, one is worth around £6,900. In 2013, you could buy one for less than a tenner. The price floated around in the low hundreds until 2017, when it suddenly started to take off, reaching a high of nearly £17,000 in December 2017.

Since then it has fallen to around £2,600 in January this year, before more than doubling in value today. That volatility undermines its use as a currency – you might pay for something with a fraction of a Bitcoin, but the day after the seller receives the payment that fraction might be worth a lot less – or a lot more.

And you would have paid far more – or less – than you should have. One of Bitcoin’s main uses is gambling on the price – buying and selling them hoping to make money.

Another big use is crime. Bitcoin is separate from banks and governments, and the owners are untraceable. It is used by thieves who claim they have infected your computer or hold compromising information and demand payment in Bitcoin to resolve the problem.

Others offer Bitcoin or other crypto currencies online, but when you try to use that money, or change it into pounds, it has disappeared.

There is no one to complain to and no chance of compensation. Bitcoin is the Wild West of currency, full of bank robbers and bandits and not a sheriff in sight. If you dip in an amateur toe, you will probably lose it.