Bitcoin has been referred to as digital or electronic cash, and virtual or digital currency. Originally, it was mostly used in online gambling for casino games. You could go online and play dice games, cards, and slot machine games, such as Satoshi Slot. A software displays the “block chain”, which is a shared public ledger that confirms all transactions. Getting transactions completed and verified usually takes about 10 minutes time to be added to the block chain.
There is no central bank or specific oversight for any transaction, only the public ledger. There is also no physical aspect to bitcoin. That makes bitcoin the first decentralized virtual currency. Virtual currency in other forms include incentive programs, reward programs, points programs and frequent flier mile programs used by many airlines. These types of currency are controlled by the companies that issue them, making them centralized virtual currency.
There is much debate between economists, bankers and Governments about whether or not it is real currency. The value is unstable, there is no regulating body and it is not legal tender. The Bitcoin.org website, has indicated, in the Things You Should Know section, that the price of bitcoin is volatile and it “should be seen as a high risk asset”. Bitcoins have been lost by people who have forgotten their security key. They have also been stolen by hackers in some cases. It is still in the experimental stages of development and this virtual currently is not predictable. However, it has gained popularity and many merchants and companies are now accepting it as payment for goods and services.
You can use bitcoins to purchase items online and at some stores and restaurants, although it is still not official currency. One online marketplace, Brawker, has even set up an exchange process between customers that allows people to use bitcoin to obtain items from companies that do not accept them. One customer will purchase an item with cash or credit card and the second customer will exchange bitcoin for the item. This gives those who want to use the virtual currency more freedom to do so when purchasing items online.