Bitcoin is a new currency that was created in 2009 by an
unknown person using the alias Satoshi Nakamoto.
Transactions are made with no middle men – meaning, no banks! Bitcoin can be used to book hotels on Expedia, shop for
furniture on Overstock and buy Xbox games. But much of the hype is about
getting rich by trading it. The price of bitcoin
skyrocketed into the thousands in 2017.
Bitcoins can be used to buy merchandise anonymously. In addition,
international payments are easy and cheap because bitcoins
are not tied to any country or subject to regulation. Small businesses may like
them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in
Buy on an
Many marketplaces called “bitcoin exchanges” allow people to buy or sell
bitcoins using different currencies. Coinbase is a leading exchange, along with Bitstamp and Bitfinex. But
security can be a concern: bitcoins worth tens of
millions of dollars were stolen from Bitfinex when
it was hacked in 2016.
People can send bitcoins to each other
using mobile apps or their computers. It’s similar to sending cash digitally.
People compete to “mine” bitcoins using
computers to solve complex math puzzles. This is how bitcoins
are created. Currently, a winner is rewarded with 12.5 bitcoins
roughly every 10 minutes.