Bitcoin is a payment system introduced as open-source software in 2009 by developer
Satoshi Nakamoto. The payments in the system are recorded in a public ledger using
its own unit of account which is also called bitcoin. Payments work peer-to-peer
without a central repository or single administrator, which has led the US Treasury
to call bitcoin a decentralized virtual currency. Although its status as a currency is
disputed, media reports often refer to bitcoin as a cryptocurrency or digital currency.
Bitcoins are created as a reward for payment processing work in which users offer
their computing power to verify and record payments into the public ledger. Called
mining individuals or companies engage in this activity in exchange for transaction
fees and newly created bitcoins. Besides mining, bitcoins can be obtained in
exchange for fiat money products, and services. Users can send and receive bitcoins
electronically for an optional transaction fee using wallet software on a personal
computer, mobile device, or a web application.
Bitcoin as a form of payment for products and services has seen growth,and merchants
have an incentive to accept the digital currency because fees are lower than the
2-3% typically imposed by credit card processors. The European Banking Authority
has warned that bitcoin lacks consumer protections. Unlike credit cards, any fees
are paid by the purchaser not the vendor. Bitcoins can be stolen and chargebacks
are impossible. Commercial use of bitcoin is currently small compared to its use
by speculators, which has fueled price volatility.
Bitcoin has been a subject of scrutiny amid concerns that it can be used for
illegal activities. In October 2013 the US FBI shut down the Silk Road online
black market and seized 144,000 bitcoins worth US$28.5 million at the time.
The US is considered bitcoin-friendly compared to other governments In China,
buying bitcoins with yuan is subject to restrictions, and bitcoin exchanges
are not allowed to hold bank accounts.
If you want to know more then check out the full Bitcoin Bitcoin Wikipedia
article or watch the YouTube video below.