Bitcoin

Bitcoin has no central exchange but rather you become a member of its network. Bitcoin is only attractive as speculative (it “should” appreciate, but it has dramatic swings), it has an independent international purchase power without exchange and thus far there is no rules for taxation. Some discussion about how offshore gambling and money laundering will attract government oversight. A holder of Bitcoin would have to find goods and services willing to participate. The utopian scenario is Bitcoin won’t be dilluted.But heck, you know, some folks buy every Iraqi dollar they can get their hands on in anticipation that one day that money will reflect and represent face value. Bitcoin is speculative and more so than other currency trading.

BitCoins are a digital currency. By design, a new block is created about every ten minutes and the creator gets 50 bitcoins, which is worth about $750 right now. Creating a new block requires solving a very complex mathematical problem by trial and error. It is so complex that right now (as of this second), it takes on average 5,923,676,160,960,014 tries to solve it. The problem automatically gets more difficult to keep the solution rate at once per ten minutes.The miners actually secure the currency. By piling massive amounts of computations on top of all previous transactions, they make it impossible to undo those transactions. It sounds weird, but it’s the principle on which BitCoins work.

Bitcoin is a digital currency. It doesn’t exist in physical form, only electronically. It is essentially the same as regular currency since many people these days use direct deposit, online bill pay, etc. However, with physical currency you always have the option of going to the bank or an atm and getting money out. Not with bitcoins.Implications? How is it going to change things? Well, they could be huge. If bitcoins catch on, it could become a universal, worldwide currency. Trade and travel would become easier because there would only be 1 worldwide currency. On the flip side, the currency is not backed by anything so it could become the victim of hyperinflation, hyperdeflation, or simply going out of existence. It is hard to say whether this will catch on, but it seem to be becoming more mainstream every day.