Change afoot: Taking mystery out of Bitcoin
Bitcoin, the best- known of the upstart digital currencies, is still a mystery to many Americans.
If you’ve heard about Bitcoin, it’s mainly from headlines about its 400% price gain earlier this year, or its surge to nearly $ 5,000 last month, making it the most- valuable player in the mushrooming space for so- called cryptocurrencies. Or because Wall Street skeptics call it a “fad,” a “fraud” and a “speculative bubble.”
Believers in Bitcoin say it’s the money of the future, a digital alternative to the dollar, euro or yen. Non- believers say it’s not real money. After all, you can’t dig into your pocket and pull one out like a $ 10 bill and hand it to a cashier at Dunkin’ Donuts to pay for your morning coffee.
Some investment pros say it’s a new asset class, no different from a stock, a bond or an ounce of gold, and that it has great investment promise. Skeptics say it’s not an investment because there’s no good way to value it. SO WHAT EXACTLY IS IT?
Bitcoin is a digital currency and digital payment system that allows people to send and receive Bitcoins— or digital tokens — to anyone, anywhere in the world. It runs on a decentralized network of computers where all transactions are recorded, verified and updated by technology known as blockchain, which is akin to an online public ledger. Unlike traditional payment networks such as Mastercard, Bitcoin isn’t owned by anyone. There’s no central authority in charge of it. HOWDO YOU BUY BITCOIN? You can set up an account with a Bitcoin exchange such as U. S.- based Coinbase, which allows you to purchase Bitcoins with money from your bank account or credit card. And just as the New York Stock Exchange is a place you can go to buy and sell such stocks as Amazon, these exchanges will let you trade cryptocurrencies. HOWDO I ACCESS MY BITCOIN ‘ MONEY’?
Bitcoins purchased on an exchange or received in a transaction can be stored and accessed in a so- called “Bitcoin Wallet,” which lets you receive Bitcoins, store or save them, and send them to others. There are apps that allow you to install a Bitcoin Wallet on your computer or mobile device. WHERE CAN I SPEND IT AND WHAT CAN I BUY WITH IT?
You can spend your Bitcoin at any retailer set up to accept Bitcoin. But Bitcoin hasn’t yet enjoyed widespread adoption, and those retailers that do accept it mostly are set up online. You can use Bitcoin at discount retailer Overstock. com. You also can go online and use Bitcoin at Microsoft to buy apps, games and videos on Xbox, book airline tickets from CheapAir. com or hotel rooms from Expedia or purchase a satellite TV subscription from Dish Network.
One way to get around retailers not accepting Bitcoin is to buy gift cards for retailers including Amazon and BestBuy at gift card makers such as e Gifter. WHAT DO INVESTORS NEED TO KNOWABOUT BITCOIN?
Bitcoin has gained most of its notoriety as an investment. A single Bitcoin ended 2016 at around $ 950 but skyrocketed to nearly $ 5,000 on Sept. 1. But Bitcoin has proved to be wildly volatile. Three weeks after hitting its 2017 peak, it had given back more than 25% before rallying 20% to around $ 4,350 Friday.