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Bitcoin market

Updated on June 27, 2011

What is a bitcoin?

A bitcoin is a virtual currency that has no intrinsic value however it's worth is based on the willingness of the holders and merchants that accept it. This virtual currency has no legal tender and is accepted with some merchants. Typically you can buy general merchandise, clothes, web design and music with your bitcoins.

Bitcoin exchange

There is an exchange for bitcoins you can trade them at Mt Gox and exchange them for U.S. dollars. Keep in mind this virtual currency started near zero and had just recently hit a high of about $30 per bit coin, however within 48 hours the price came back down to around $16 so these are not for the faint of heart if you are trading them. Extreme caution should be used if you decide to trade these because they are not regulated and are only of value to those that are willing to accept them.

Where can you buy bitcoins?

There are a few ways to get Bitcoins:

  • Buy them on an exchange such as Mt. Gox.
  • Accept Bitcoins as payment for goods or services.
  • Find a local trader on tradebitcoin and trade in cash.
  • Create a new block (currently yields 50 Bitcoins).
  • Participate in a mining pool.

Controversy with bitcoins

Bitcoins are a peer to peer currency giving them an anonymous nature for those wishing to purchase goods and services. As well they can be traded on an unregulated exchange were you can profit or lose real money exchanging this currency. This of course critics point out has lead to drug dealers selling goods and making money by trading this currency as a way to launder real money. The difficult part for law enforcement is that the bitcoins flow through a network that cloaks the identity of its owner making it virtually impossible to monitor.

Explaination of a bitcoin

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