What is Bitcoin
Electronic money, began 2009
Most prominent digital currency
Relies on network of computers that use
mathematics to verify and record details
No central authority governs supply and
Value depends on people’s confidence
Volatility of the Bitcoin
In December, one of the online exchanges
(Bitstamp) spiked from $30 to $1100.
However, concerns caused decline to $530
Price varies greatly depending on
How do I spend it?
Ideal for online. Some companies already
ready to accept (Overstock.com, other
Critics worry about volatility and potential
to be used for illegal activity
Where do I store and trade
Held in virtual wallets with unique keys
Transactions made by sending bitcoins
from one wallet to a unique key
associated with another wallet in a
cryptographic process verified by
Wallets can be stored offline or online at
exchanges such as Bitstamp and BTC-E
Creating a bitcoin
Known as bitcoin mining
Rewards computers that do the work of
verifying transactions, rewarded in bitcoin
What happened to Mt. Gox
The Tokyo based site halted withdrawals
this month after detecting “unusual
activity” and on Tuesday stopped trading
More than 744,000 bitcoins missing due to
Debts of Mt. Gox is over $65 million,
surpassing the assets
Mt. Gox was formerly a website for
exchanging trading cards
What could have helped Mt.
Since bitcoins are software, any computer
or server connected to the Internet that
stores the files are vulnerable to
unauthorized access. Similar to a hacker
Move the digital money off a webconnected computer. This is known as
“cold storage”. Can go online to trade.
(Online is known as “hot storage”
What is the future of bitcoins?
The Mt. Gox failure proves unregulated
currency is not quite ready for widespread
However, newer exchanges are trying to
make it mainstream and are better
Where can I learn more?
Learn all about Bitcoin: https://bitcoin.org/en/
Sign up for a Bitcoin wallet: http://www.bitcoin.com/
More about Bitcoin in the free market:
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