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Confused by Digital Currency? This Three Minute Video Has the Basics of What You Need to Know About 'Bitcoins


"Change the way we look at, think about and, most importantly, spend our money."

(Image: Shutterstock.com)

(Image: Shutterstock.com)

Bitcoin has been making headlines steadily since March after it reached a record high and its value has only continued to climb since.

The booming digital currency saw an exchange rate exceeding $250 per Bitcoin as of Wednesday on Mt.Gox, a Bitcoin exchange. In late March, it was at $94 and just two months ago it was only valued at $20. According to NPR, some connect the recent spike in value with the economic trouble in Cyprus and Spain, while others don't see those issues solely driving the trend:

But Jon Matonis of the Bitcoin Foundation tells Der Spiegel that he doesn't believe the connection is as direct as people think.

"Most transactions are still coming from affluent regions, like the United States and Northern Europe," he says. "What we are seeing is not a Cyprus bubble."

Even though the decentralized digital currency -- first beginning as an idea in 1998 and reaching its working form by 2009 -- is gaining popularity, many still have questions about how it works, how it's "mined" and its risks. This slightly more than 3-minute video (via Gizmodo) posted a few days ago answers many of the basic questions surrounding Bitcoin:

What is most important about Bitcoin, the narrator in the video says, is how it can "change the way we look at, think about and, most importantly, spend our money."

Although some see Bitcoins as an investment -- this guy recently put a new, unused iPhone 5 for sale on Craigslist for three Bitcoins only (no other form of currency allowed) -- others note the risky side of them. PC World also recently pulled together the "sad history of virtual currency" over the years that has never seemed to end well.

One of the risks, for example, is that services are subject to hackers. Just last week Mt.Gox was hit by a distributed denial of service attack and some of its effects continue into this week. In a press release, Mt. Gox said the attack was creating its greatest trading lag ever and noted that because of it some users could not log into accounts.



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