A study released last week by the Cambridge Centre for Alternative Finance, which gathered data from more than 100 cryptocurrency companies, estimated that there were up to 5.8 million active users of cryptocurrencies in the world, with Bitcoin taking a 72pc share of the market.
Working out how large the market is in the UK is difficult, given the secretive nature of Bitcoin, but a Bank of England report released in 2014 said that only 1.2pc of Bitcoin trading was against sterling. However, the Bitcoin exchange platform Coinbase said it had recently seen a fivefold year-on-year increase in the number of UK users.
Eitan Jankelewitz, a lawyer at the law firm Sheridans who specialises in blockchain and e-commerce, said: “At Europol [the EU’s law enforcement agency] they don’t like the anonymity of Bitcoin, which I think perhaps is a bit of a misunderstanding, because it is not truly anonymous.
“You can trace every transaction and follow it all the way through. You can see the life of a penny and see exactly where it’s been. The problem is that you don’t know exactly who controls those wallets.”
Currency or commodity regulating Bitcoin is, in part, held back by governments’ inability to define what it actually is.