Updated:
Original:

Why is everyone talking about Bitcoin?

The cryptocurrency has been making headlines this week.
Author:

What are we talking about?

Bitcoin is a form of digital currency created in 2009 as a worldwide online payment system.

Isn't it like real money?

Kind of. While it has value in the same way physical money does, Bitcoin exists as a digital currency. It's also unregulated, meaning it's not subject to the rules of any nation (or their tax laws).

Transactions are carried out anonymously with few – if any – fees being levied, and no single person or institution (ie. banks or federal reserves) has control over how it's used.

Think of it as a mixture of currency and stocks. A Bitcoin can be used to buy goods and services in the same way a dollar can, however the value of a Bitcoin fluctuates (wildly) depending on demand for it.

The value of a dollar also changes based upon inflation, but it's regulated by the Federal Reserve can be more easily influenced by government policy. Its value is also dictated by supply and demand for the things we actually buy with the money, rather than the demand for the currency itself.

Why's it in the news?

Because the value of a single Bitcoin passed the $11,000 mark on Wednesday – rising $3,100 in the space of a week.

A year ago, a Bitcoin was worth just $731, marking a meteoric rise and a payday for people holding them. It has since dropped back from its Wednesday peak.

Where can you spend Bitcoin?

Bitcoins were created as a currency to buy services over the internet, and an increasing number of retailers have started accepting them as forms of payment.

99Bitcoins notes that Overstock, Subway, Expedia, Virgin Atlantic and Microsoft are among the companies that accept the currency.

Does everyone use Bitcoin this way?

No. This week shows that there are plenty of investors hoping to make a fast buck simply by owning Bitcoins, in the hope of selling them at a profit in the future.

But since Bitcoin doesn't have any fundamental value other than what people are willing to pay for it and isn't protected by governments, it's extremely volatile as an investment – with some stock market analysts even referring to it as a "fraud."

And because it's anonymous and difficult to trace, it's also a popular form of currency among money launderers, fraudsters, hackers and scammers.

How do I get them?

You can sign up to a digital wallet service like Coinbase, the biggest service of its kind in the U.S., where you exchange actual money for Bitcoins.

You don't have to buy whole Bitcoins, you can buy fractions of them depending on how much you want to put into your account.

There are also several ATMs in the Twin Cities where you can buy and sell Bitcoins, with Digital Mint having some in Fridley, Columbia Heights, Coon Rapids and Brooklyn Park.

Next Up

moose minnesota usfws - flickr

MN homeowner mistakes large tent for dead moose

They spotted two people on a security camera dragging the "moose" across a driveway.

Flickr - minneapolis police officer close-up belt camera - Tony Webster

What happens if Mpls. public safety question passes? City memo provides answers

The memo was sent to the mayor and council members Tuesday morning.

Wild

COVID-19 hits Minnesota Wild coaching staff

The Wild will be shorthanded for Tuesday night's game in Vancouver.

Anthony Edwards

Ant takes alpha role after bad loss: 'We need to lock the f*** in'

The Timberwolves' rising star was not happy after Monday's loss to the Pelicans.

parker eisinger

Lakeville football player diagnosed with cancer week before playoffs

The tenth-grader was diagnosed with a form of cancer most commonly found in people aged 65 and older.

University of Minnesota peeping tom suspect

Someone keeps trying to film showering women at U of M

The university has received three reports in the past two weeks.

john Fluevog shoes 1

John Fluevog Shoes closes its Uptown Minneapolis store

The brand could return to the Twin Cities one day.

sidecar drink

Sidecar — Town Hall's new cocktail lounge — is officially open in Minneapolis

It's the fifth Town Hall location, but the first to focus on cocktails.

Screen Shot 2019-07-18 at 9.10.30 AM

Here's where DFLers stand on Minneapolis' public safety ballot question

The question would create a Department of Public Safety and remove some requirements.

Arthur Kollie

Man pleads guilty to brutal murder of 14-year-old girl in Fargo

The 14-year-old girl was the victim of a random attack outside a Fargo strip mall.

Minneapolis Mayoral Candidates 2021 - jacob frey sheila nezhad kate knuth

Here's who has endorsed the frontrunners for Minneapolis mayor

Politicians and community groups are voicing their opinions.

Related

I sold my Bitcoin, and it had nothing to do with money

I freaked out when I read about how much energy it uses.

Well done everyone, Minnesota's credit scores are the best

The state ranked No. 1 in Experian's rankings.

The key thing to know about cryptocurrency: Nobody knows anything

This situation is unprecedented, no matter what anyone says.

People are losing it over Hatchimals on Black Friday

The demand has been so great that successful buyers have been putting them up for sale at several times the asking price.

Everyone is talking about this Klobuchar-Kavanaugh moment

The Supreme Court nominee apologized to the Minnesota senator.