What Are Bitcoins?


Quick Answer

Bitcoin is a digital, or virtual, currency that allows users to conduct online transactions. Bitcoins are not controlled by a central authority and cannot be obtained from a bank. All transactions using bitcoins are done completely online and are untraceable.

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Full Answer

Bitcoins are held in an online wallet. Bitcoins can be acquired by "mining," a process by which computers solve mathematical problems to release bitcoins. In total, there cannot be more than 21 million bitcoins available. As of November 18th, 2013, approximately 11 million bitcoins had been found.

Because bitcoins are untraceable, drug dealers have used them. They are, however, legal and can be used for any online transaction in which a business accepts bitcoins. Bitcoin is an extremely volatile currency that fluctuates wildly in value.

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