Heard everyone yapping on about Bitcoins but have no idea what they're tallking about? Ditto. Which is why we've done the hardwork and read all of the boring stuff to give you this simple guide to what it's all about and how it could potentially make you a trillionaire.
Here's the lowdown.
What is it?
A digital currency without notes or coins. It’s essentially make-believe money. Except it’s valuable and you can spend it on things. So it’s also real. Like Michael Jackson’s nose (rest in peace).
Wait, so it doesn’t exist?
Sort of. It has no physical form and is purely made up of code (or an address) to which value is attributed. You can buy bitcoins from certain online sources or trade them for a service, and then when you’re done you can exchange it for real cash, straight to your bank account.
OK… that still makes no sense, but we’ll roll with it. How much can I buy for a tenner then?
This is the tricky bit, as there is no set value. In fact the value of a Bitcoin fluctuates constantly, a little bit like the stocks. One day you could be absolutely rolling in cyber millions, the next it could be like Germany after World War I. A hyper-inflated, economical mess.
But the good news is when it’s up, it’s really up. A man called Kristoffer Koch who bought £15 worth of bitcoins in 2009 recently managed to cash them in for £430,000.
Now you’ve got my attention. So who came up with it? Are they an internet millionaire living in a futuristic house made of imaginary money?
This is the strange bit – nobody knows anything about the inventor other than the following:
- They might be called Satoshi Nakamoto
- They’re stupidly clever
- They might be from Japan. Although the one registered mail ID for Nakamoto is based in Germany. So they could live there.
Satoshi came up with the whole thing in 2009 and shared it with a few other developers and then cut off all contact in 2010. Nobody has heard a peep ever since and now they’re well and truly off the grid, Neo-style.
That’s actually pretty creepy…
You’re telling us. And to add to this phantom creator, the whole point of Bitcoins is not to make online spending easier (because it actually doesn’t) but to make it completely private.
If you’re trading Bitcoins, you’re carrying out anonymous currency transactions that nobody will ever know about, with no bank statement or info about who sent or received it.
Amazing if you’re just extremely private about your spending habits, but if you’re…
A terrorist? Or some other illegal business? You could carry everything out secretly online.
Exactly. Nobody would ever need to know about where or with who the money is changing hands, which is why it was the currency of choice for sites like Silk Road, where you can buy anything from explosives to heroin.
At present there are over 2.5 million Bitcoins in circulation, equivalent to more than $48.5 million dollars, so it’s only going to get bigger.
It’s changing the way in which online businesses are looking at money transfers and security and there are even a few countries jumping on board. As you read this, Canada are in the process of developing their own cryptic, digital currency called MintChip.
For some, it could also be the way you turn yourself into a millionaire of the digital age, by reading the market and playing Bitcoins like the stock market for the Matrix-generation.
It could also be the way you bankrupt yourself by spending your life savings on something that technically has no real value or regulations. Your shout on that one.
Mind blown? Take a few seconds to watch this sexy GIF of Kate Upton. You deserve it.