Have You Heard About the Bitcoin?

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Unlike a physical currency, such as gold, Bitcoin is a completely virtual currency.
Unlike a physical currency, such as gold, Bitcoin is a completely virtual currency.

There's a new, controversial "currency" lurking amidst the financial horizon. Reportedly, it's being used universally and several service providers are considering accepting it as a legitimate form of payment including bars, social media websites and even larger companies like Wordpress and Paypal. It's not a debit card, credit card, check or money order, it certainly isn't cash and chances are, you've never heard of it.

Acquaint yourself with the Bitcoin, which according to Bitcom.org, is an Internet protocol and open-source software platform that enables a new, completely digital and decentralized currency called bitcoins.

In layman's terms, a Bitcoin strictly exist as a digital or electronic entity and it is not regulated by any government and has not yet been deemed legal tender by an authorized central body. Still, a growing global population has been using the "funny money" to pay for goods and services.

Bitcoins are enigmatic and are considered a kind of "crypto-currency" which means it is fashioned around secrecy. This is the reason why experts studying the new currency feel it is heavily utilized in the illegal drug industry and other illicit trades.

In a related matter, Democratic Senators Charles Schumer of New York and Joe Manchin of West Virginia penned an open letter to U.S. Attorney General Eric Holder in 2011, asking him to shut down "Silk Road," the Internet black market drug trade, and Bitcoin which they believe funds it.

"The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins," the letter read. "After purchasing Bitcoins through an exchange, a user can create an account on Silk Road and start purchasing illegal drugs from individuals around the world and have them delivered to their homes within days. We urge you to take immediate action and shut down the Silk Road network."

Coincidentally, law enforcement authorities have already begun using sophisticated techniques to analyze Bitcoin transactions in their criminal investigations making the Bitcoin software not very attractive for criminal enterprises, according to the Bitcoin.org website.

Needless to say, all consumers should be keeping an eye on this controversial so called "coinage." In the meantime, we will leave you with the most succinct definition of a Bitcoin we could find (on the Bitcoin.org website):

Unlike a physical currency, such as gold, Bitcoin is a completely virtual currency. Bitcoin is a triple entry bookkeeping system where a public ledger of every Bitcoin transaction is validated and distributed in real-time through the peer-to-peer Bitcoin network. The whole network is secured and regulated through cryptography which is the practice and study of techniques for secure communication in the presence of third parties. Anyone can process Bitcoin transactions using computer processing power, often with specialized hardware, and potentially earn a reward in bitcoins for this service. This is often called "bitcoin mining".

For additional information on the Bitcoin, please visit Bitcoin.org.

By Larissa M. Tyler

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