A form of money that is entirely virtual is Bitcoin, sometimes referred to as a cryptocurrency, a virtual currency, or a digital currency.
It’s like a version of cash online. You can use it to buy products and services, but not many shops still accept Bitcoin.
A novelty is the physical Bitcoins that you see in the pictures. Without the private codes printed inside them, they would be useless.
How does Bitcoin work?
In essence, every Bitcoin is a data file that is stored in a digital wallet app on a smartphone or device.
People can send Bitcoins to your digital wallet (or part of one), and you can send Bitcoins to other individuals.
Every single transaction is registered on a public list called the blockchain.
This makes it possible to trace the history of Bitcoins to discourage people from investing coins that they do not own, making copies or undoing transactions.
How do people get Bitcoins?
There are three main ways in which individuals get Bitcoins.
- Bitcoins can be purchased using ‘real’ currency.
- You can sell stuff and let people use Bitcoins to pay you.
- Or by using a machine, they can be made.