By now you have heard the term “bitcoin.” But what is a bitcoin? Let’s explore what they are.
What a bitcoin is. Bitcoin is a “new kind of money.” It is digital money that can be tranferred over the internet. They are transferred directly from person to person without a middle man or bank. This means no transaction fees.
How does it work? You have a digital wallet on your computer or mobile device or in the cloud and can send bitcoins as easy as sending an email. You can purchase anything with bitcoins. The networks are secured by “miners” who make a record in a public ledger. It uses military-grade encryption. Nobody owns it. Using the bitcoin network is free. (You can choose to speed up a transaction for a fee.)
The downside: bitcoin wallets are not insured by the FDIC. You can accidentally delete them, a computer virus can wipe it out. In the cloud, servers can be hacked and bitcoins stolen.