What is Bitcoin? It is not that complicated if you ignore the geek speak

Bitcoin has been declared the “end of money as we know it” and as a currency for our times; decentralised, and created specifically for seamless exchange on the Internet. That is, it would be, if everyone knew exactly what it was and was actually prepared to use it.

The problem is, for most of the general public, Bitcoin still remains a mystery. In a recent survey of consumers carried about by analyst firm PWC, only 6% said that they were very familiar or extremely familiar with currencies like Bitcoin. 83% of those surveyed said they had little to no idea what Bitcoin was.

Contradicting this is the fact that there has been a great deal of publicity around Bitcoin which is reflected by people searching for the term. Google Trends for example, shows that searches for Bitcoin exceeded those for two other payment systems, Apple Pay and Google Wallet.

Most of this attention has come from well publicised stories of Bitcoin and its association with drug crime on the Internet or hacks of Bitcoin exchanges like Mt Gox, where hundreds of millions dollars worth of the currency was stolen.

So what is it exactly?

Bitcoin is first and foremost a currency like any other. One Bitcoin can be exchanged for almost every other type of currency, on any number of “exchanges”. At the moment, 1 Bitcoin is worth about US $230.

Once a Bitcoin is bought, it can be used to buy goods at a price in Bitcoins that is determined by the current exchange rate quoted on the various exchange markets. This is no different to using Australian dollars or Euros to buy things on the Internet priced in US dollars say.

Using Bitcoin to buy things is very much the same as using electronic payments from a bank. The merchant

Originally appeared at: http://theconversation.com/what-is-bitcoin-it-is-not-that-complicated-if-you-ignore-the-geek-speak-46512