What is Bitcoin?

Bitcoin is a form of digital currency, created and held electronically. No one controls it, such as a bank or country.  Bitcoins aren’t printed, like dollars or euros.  Bitcoin can be used to buy things electronically.  Only 21 million Bitcoins can ever exist.  

Conventional currency has been based on gold or silver. However, Bitcoin isn’t based on gold; it’s based on mathematics.  Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it.  

Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information, so it's somewhat anonymous.  However, Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the blockchain.  So, if you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.  That’s why it has become the currency of choice for people online buying drugs or other illicit activities.

Find out more about Bitcoin, on CNN Money and Here.