What is Bitcoin anyway?

What is Bitcoin?

Its an electronic cash system that allows online payments to be sent directly from one person to another without going through a financial institution (like a bank) or a third party (like PayPal).

Dan Zak

Boosters of the cryptocurrency make their case on Capitol Hill and want an ATM within easy reach

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Bitcoins are an unregulated, underground online currency and the FEC may permit political campaigns to receive them as contributions.

Whos in charge of it?

No one. Or, rather, everyone who uses it. Bitcoin functions on a peer-to-peer computer network based on cryptography rather than a trusted third party. It is an open-source and self-governing system. A software code maintains a public ledger that records and verifies each transaction without revealing the identity of the users. Users who provide hardware and bandwidth for these transactions are rewarded by the algorithm with new denominations of bitcoin to save or sell into circulation. This process of earning new bitcoin is called mining.

How much bitcoin are in circulation, and what are they worth?

Thursday afternoon there were nearly 12.3 million bitcoin in circulation. The value of a single bitcoin fluctuated between $848.53 and $868.93 through 5 p.m. Thursday, according to CoinDesk, a digital currency news site that averages the price of bitcoin across several high-volume exchanges. One year ago a single bitcoin was worth about $13. Bitcoin are released into circulation at a predictable but diminishing rate based on a software algorithm that caps circulation at 21 million bitcoin (which the system is expected to reach in 2140). Bitcoins are currently divisible by eight decimal points; $1 (USD) equaled about 0.0012 bitcoin on Thursday.

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What is Bitcoin anyway?