Bits of Coin
I read with interest your article “The Rise of New Money” in the November 2017 issue. I’m still having a hard time getting my head around how cryptocurrency works. I have two questions I’ve never seen addressed: If I don’t mine cryptocurrency, how do I obtain the currency? And let’s say I have obtained one Bitcoin, and its value currently is $ 5,000. Now I go to a retailer who accepts Bitcoin, and I buy a $1,000 TV. In what form do I get my $ 4,000 change? Are there fractional Bitcoins?
– Jack Mangold
EXECUTIVE EDITOR ALAN DEXTER RESPONDS: The time to mine Bitcoins has definitely passed, but you can still buy and sell them using a Bitcoin exchange (such as Kraken, Coinbase, and so on). Once you do buy Bitcoins (or a fraction of a Bitcoin), they’re held on the exchange in a wallet, and any leftover coins (or fractions of) are left in the wallet. At the time of going to press, Bitcoin is enjoying another one of its volatile moments, which has seen its price hit over $10,000. So, buying a TV would leave plenty of coin left in your wallet for future purchases or investment. We’ll be visiting cryptocurrencies again soon, with practical advice for dealing with them on a day-to- day basis.