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The everyday investors who use Bitcoin in the capital; Digital currency Bitcoin has been dubbed 'digital gold' after owners witnessed massive rises in its value, but experts warn the bubble is about to burst. Anna Lewis caught up with some of the everyday investors in Cardiff about their Bitcoin experiences.

IN A street known for its quirkiness, the Castle Emporium on Womanby Street has some of the shops you might expect - such as a coffee stall and a vintage clothes store.

But tucked away in the entrance stands an ATM - for Bitcoin.

One of two such cashpoints in Cardiff, the concept is simple. You can either buy or sell the currency using cash or card for a transaction fee.

If you're selling, it will give you the Bitcoin value.

Those working nearby report the machine is nearly constantly in use.

Mike Ridout, co-owner of neighbouring Cardiff Skateboarding Club, originally bought one Bitcoin for PS50 a handful of years ago. It is now worth about PS15,000.

"Will the bubble burst? I don't know," he says.

"I haven't spent it so it just sits there and I'm wondering what to do with it. It's hard to ignore. Some of my friends use it and I know a lot of people use it for general transactions.

"I don't want to make a mistake online with it. I'm hoping it will become a little more regulated."

During the space of an hour a slow trickle of people come to use the ATM.

For self-employed clothes designer Michael Smith, his trip comes after finding his old login details to his bitcoin app after five years.

Michael, 28, said: "I had a Bitcoin app on my old phone and I lost that phone.

"The Bitcoin stays in the system but I didn't have my 10-letter passcode.

"Last night I was going through some old hard drives and found a screenshot of it backed up.

"It was in the first folder of random pictures."

After hearing about the relatively new concept at the time, Michael originally bought his Bitcoin for less than PS100.

He said: "I started with the equipment and was mining them myself about five or six years ago.

"I bought one Bitcoin for PS90 and lost it about four years ago. At the time no-one trusted it."

The next person to use the machine is a 55-year-old mother of one.

After travelling down from Rhymney on the train, her first stop is to use the ATM before doing some Christmas shopping.

After being told about the online currency by her son earlier this year her whole family is now involved, including her 80-year-old dad.

The private carer said: "I haven't invested much because we don't have a lot of spare money. My son used to live in London and moved to Spain to work and he said 'anything you have just put in'.

"I was a bit nervous before I did it but now Bitcoin is more stable."

Despite having no previous knowledge of cryptocurrency, together the family have invested about PS800 and have watched their money triple.

The self-taught investor said: "I'm predicting it's value will go up to $100,000 but different people say different things...

"My dad had a pension and put into it for 30 years. He said if this was 50 years ago he'd have put the money in here instead."

She added: "We're just seeing if we can make a difference to our lives instead of plodding on through the same old wheel.

"I've got a lot of friends who said they wouldn't do it but you have to take a chance in life."

For 32-year-old Simon Miles from Merthyr Tydfil, getting started in the digital currency was a risky business.

A former railway worker, Simon now owns his own Bitcoin company Misoneism Limited buying and selling Bitcoin to others.

Taking a gamble in 2015, he invested PS12,000 to buy his first ATM which now sits in the Castle Emporium.

He said: "I came across the exchange and started trading it through the web six years ago.

"People would come to me and I would charge a premium for finding Bitcoin and it was a lot faster.

"It's much the same as eBay. You can auction the product and you might have some cheaper but then you might have someone whose reputation is better and you pay the premium."

After coming across the concept in a hunt for a new investment, Simon advised his friends to get involved early.

He said: "I was looking for something to get my teeth into - something a bit like Apple. I take more risks than the average person so I told my friends about Bitcoins. When I started the price fell from PS600 or PS700 to PS70.

"I remember sitting around a table in the pub with my mates and saying, 'I know it doesn't look good but if you have any money to invest now is the time.'" The entrepreneur added: "In the early days people thought it would only be drug dealers that were interested - it had that stigma attached which isn't the case.

"It is part of the system but people have to take that, it's the same as when people use GBP."

Such warnings, and concerns about criminals using the currency for money laundering, have prompted calls for the use of Bitcoin to become more regulated.

In the meantime, with such a sudden spike in users, Simon's biggest concern lies with keeping up with demand.

He said: "I'm almost not able to supply to demand.

"We might be in for a bit of a rollercoaster but as long as people can keep their emotion in check they will be fine.

"The future is difficult to predict, it's a beast in its own right."

As well as those using Bitcoin ATMs for small investments or one-off trades, others in Wales have used it to make their fortune.

A property developer and investor by trade, Adrian Hibbert started investing in the digital currency in 2015 when he bought about $100,000 of Bitcoin mining programmes.

Adrian, who is originally from the Rhondda but now lives in Cardiff Bay, claims that pot is worth about $7.9m (PS7m) in cryptocurrency.

He said: "I missed the early days of it in 2009, but by 2015 I started to see the trend appear online.

"I made around PS1m from property which is my favourite market. It was good times.

"But property comes with its downsides - tenants trashing the place, people gazumping you, solicitors, estate agents. Everyone adds to it."

He added: "I've earned more in two years using Bitcoin than I did over 20 years in property."

But despite the raft of success stories, financial experts warn Bitcoin gains are unsustainable, pointing to the volatiliy in its value over the past eight years.

Financial journalist and Money Saving Expert founder Martin Lewis has warned that while the Bitcoin value may continue to rise there is a "decent chance" it is also a bubble which could soon burst.

On his personal blog he writes: "It may be that this speculative rise will continue, which means if you put your money in now you will make a fortune.

"On the other hand, as we've seen often in history - whether it's the canal mania of the 18th century or the first internet boom - this could just be a tulip bubble, and soon to burst."

Jamie Dimon, CEO of America's biggest bank JP Morgan, made Bitcoin value fall by 6% in September after saying he would fire anyone in the company found to be using the currency.

Describing the currency as a "fraud", he predicts people will "pay the price" with a currency so reliant "on what other guys will pay for it".

What is Bitcoin? BITCOIN is a form of electronic money that is not controlled by the bank.

Bought and sold online, it can be used in some shops, with more and more shops now accepting it.

In 2010, it was worth the equivalent of $0.39.

Thanks to its meteoric rise it's now more than $17,000 for the same amount.

It has now become the biggest financial bubble in history.

But there is only a fixed amount available - so only 21 million bitcoins will ever be created to protect their value.

It is thought that around 16 million are now in existence.

Like regular currency you can also own part of a bitcoin, but instead of breaking down into pence each coin can be divisible into one hundred million parts.

Once bought they are stored in a bitcoin wallet, which can exist in an online cloud, computer or even linked to bank accounts.

To get involved you can either buy the money through a broker with regular currency or "mine" your own.

For those who are more techsavvy, this involves downloading a computer programme to solve increasingly hard mathematical equations - with a single unit created once this is done.

The mined Bitcoins can then be sold for cash.
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Publication:South Wales Echo (Cardiff, Wales)
Date:Dec 16, 2017
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