8.46am - UPDATE - Utah Division of Securities says 'We see a lot of fraudsters capitalising on this fad'
The Utah Division of Securities has warned investors that cryptocurrencies like bitcoin, ethereum and ripple are risky investments, often used for fraud.
The division has released information to warn consumers about schemes that may target individuals' retirement savings.
Keith Woodwell, director of the Utah Division of Securities said:
“Utah’s reputation as a technically savvy and connected state makes our population ripe for cryptocurrency fraud,” he said. “While it’s a compliment to our population for being plugged into what’s trending, internet hype can lead to rash decisions.
"Things that tend to go up very fast also tend to come down very fast," Woodwell said. "We see a lot of fraudsters capitalising on this fad that so many people are paying attention to. Scammers are using that greed and the little bit of knowledge that people have to offer bogus investments."
07.47am - UPDATE - Bitcoin mines to shut in China
Bitcoin has slipped to $15,913 after hitting a high of $17,005 on Saturday.
It is not known yet how bitcoin's price will react to the leaked report that China's top internet-finance regulator, the Leading Group of Internet Financial Risks Remediation, has issued a notice asking local governments to help bitcoin-mining operations make an “orderly exit” from the business.
The document, currently available through twitter user @cryptovenus, asks local authorities to use price rising measures linked to electricity supply, land use, tax, and environmental protection, to force bitcoin miners to quit the business.
It also asks the local offices to report information about mining facilities in their regions.
How does it work?
Bitcoin miners use a special software to solve increasingly complex mathematical problems that both confirm legitimate transactions, or blocks, and create new bitcoins, adding new transactions to the blockchain about every 10 minutes.
The hash rate is the number of calculations a piece of hardware can make every second as it works to solve that maths problem, and the higher the hash rate, the more likely a miner is to solve a transaction and thus be rewarded with a set amount of bitcoin.
As the price of bitcoin continues to rise mining can be profitable, as miners are rewarded with a fixed amount of coins and transaction fees for their hard work.
However, the power of the computers and expense of the hardware needed for powering through blocks can eat up a lot of electricity and end up running huge costs.
Beijing is worried about social and financial chaos triggered by small investors who lose money investing in risky financial products.
After building up trillions of pounds worth of debt on the 'shadow' investments market, China and has cracked down on investment vehicles like peer-to-peer lending and online insurance.
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