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Bitcoin - New Alternative Digital Currency

A new (alternative) currency is out and most people are still unaware of it - it's called Bitcoin and it's a decentralized digital currency.
Basically, it's a computer-generated money, but it also has physical forms (there are physical Bitcoins in the form of coins and QR code-bearing banknotes).

The new currency was launched in 2009 and was primarily used by online entrepreneurs, speculators. Currently, it still has a rather narrow field of application. You can buy goods with it, you can even exchange it for other (real) currencies, like the US dollar or the euro, Japanese yen.

In March 2013 there were over 400 million US dollars-worth of Bitcoins in circulation.

In fact, Bitcoin is just another fiat money with no intrinsic value, no backing of any sort. Some went as far as calling the Bitcoin phenomenon another "ponzi scheme".

What's interesting about Bitcoins is the fact that their value has been increasing ever since its launch. In March 2013, Bitcoins were selling at prices over 40 US dollars, but on eBay they often hit prices above 150 US dollars.

The Bitcoin units are being created by computer programs periodically at a predictable rate and their number will be limited - so, no inflation is possible! Therefore, some expect Bitcoins to rise in price dramatically over the long term.

Bitcoin is literally outside the current financial system and its sustainability is questionable for various reasons. One of the main reasons is: Bitcoins are only good until there is sufficient demand for them. And the demand constantly has to keep up in order to maintain the price high enough (otherwise: more and more people will have to want them and buy them).

Bitcoin's price has fluctuated before and they are known to be very instable. Yet, many are seeing a "safe haven" in this new type of currency.

Nevertheless, cryptocurrencies are an ingenious invention. Regardless whether they're sustainable or not.

You might want to check the video below to learn basic information about how they work and how they're generated...

Basic Presentation About How Bitcoins Work:

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