Dollar, euro and yen might be the primary language of currency traders today, but online, all the talk is "Bitcoins" -
The dollar, euro and yen might be the primary language of currency traders today, but online, all the talk is about bitcoins.
The digital currency has been around for nearly two years now, but it burst onto the radar of the mainstream world in June, when Gawker published a story about an underground Website where you could trade the currency for illegal drugs. The chatter surrounding the story eventually faded, but a lot of people were left confused about bitcoins. What are they? How do they operate? And what, aside from illegal narcotics, can they be used for?
Bitcoin is striving to be a global currency of sorts—one that's not backed by any government or institution. Bitcoins aren't cash, technically. They're an entirely virtual currency. Users exchange online credits for goods and services from select retailers, contractors and online trading houses.
Rather than going through a bank or financial institution, these credits—called tokens by users—are exchanged directly from person to person.
When a transaction occurs, the bitcoin is automatically sent from the buyer to the seller through an encrypted method that's designed to ensure bitcoins can’t be hacked or artificially created.
Bitcoin's creators like to position the currency as an alternative to the dollar and Euro. They hope to revolutionize the world of finance just as the Web has proven to be a paradigm shift in the publishing world.
That's a lofty (and likely impossible) goal, but it wisely taps into people's frustration and anger with banks following the 2008 financial crisis. By moving the transaction process to a peer-to-peer level, banks are removed from the process, which also lowers fees for both users and businesses.
The process also lets people conduct transactions with virtual (but not complete) anonymity, perhaps the biggest key to its success so far. And as online transactions continue to grow and online data theft becomes a more common occurrence, bitcoin backers see an opening for the system.
Read more -
http://www.cnbc.com/id/43823614/
The dollar, euro and yen might be the primary language of currency traders today, but online, all the talk is about bitcoins.
The digital currency has been around for nearly two years now, but it burst onto the radar of the mainstream world in June, when Gawker published a story about an underground Website where you could trade the currency for illegal drugs. The chatter surrounding the story eventually faded, but a lot of people were left confused about bitcoins. What are they? How do they operate? And what, aside from illegal narcotics, can they be used for?
Bitcoin is striving to be a global currency of sorts—one that's not backed by any government or institution. Bitcoins aren't cash, technically. They're an entirely virtual currency. Users exchange online credits for goods and services from select retailers, contractors and online trading houses.
Rather than going through a bank or financial institution, these credits—called tokens by users—are exchanged directly from person to person.
When a transaction occurs, the bitcoin is automatically sent from the buyer to the seller through an encrypted method that's designed to ensure bitcoins can’t be hacked or artificially created.
Bitcoin's creators like to position the currency as an alternative to the dollar and Euro. They hope to revolutionize the world of finance just as the Web has proven to be a paradigm shift in the publishing world.
That's a lofty (and likely impossible) goal, but it wisely taps into people's frustration and anger with banks following the 2008 financial crisis. By moving the transaction process to a peer-to-peer level, banks are removed from the process, which also lowers fees for both users and businesses.
The process also lets people conduct transactions with virtual (but not complete) anonymity, perhaps the biggest key to its success so far. And as online transactions continue to grow and online data theft becomes a more common occurrence, bitcoin backers see an opening for the system.
Read more -
http://www.cnbc.com/id/43823614/
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