Bitcoin is a digital currency that exists on the internet, and in the form of ATM machines, it is increasingly finding its way into shopping centres in Australia, malls in America – as well as downtown bars, restaurants and even the Grand Prix in Japan.
So what’s the fuss about bitcoin and how does it work?
Essentially, people in the Bitcoin network exchange official government dollars, euro and yen for fractions of the worldwide virtual Bitcoin currency, which can be used by any person on the entire planet to buy anything from anywhere that accepts Bitcoin. In some countries (and once you have setup your virtual wallet) you can deposit cash into a machine and buy Bitcoins, which you can spend anywhere that supports Bitcoin transactions. You can also take money out of the ATM machine by selling Bitcoins (see video below).
With problems in the Eurozone, some believe Bitcoin will become more valuable in the future. Especially if the European Central Bank does money printing like America’s Federal Reserve. Bitcoin is therefore a bit like gold and can be used to store wealth, buy goods and services, and protect against inflation. The downside risks include security, regulation and technical complexity, but all of these issues are currently being addressed a mountainous rush of innovation in both hardware and software.
There are now over 13 million Bitcoins in circulation, and analysts predict that there will be 8 million users wallets by the end of the year. According to the Telegraph, Bitcoin could reach US $2000 by year end.