Bitcoin becomes an online phenomenon
People are pouring money into the digital currency, perhaps seeking a new place to store their cash as confidence in the euro fades. Is this the currency of the future?
The idea of Bitcoin is tough to grasp. Bloomberg Businessweek calls it an "anarchist crypto-currency." Essentially, Bitcoins are virtual money you can use to buy things online.
You can create a Bitcoin by "mining" it online. It takes some fairly advanced algorithmic computations on your computer to do it, so most people don't get Bitcoins that way anymore. It's much easier to buy them on sites like Mt.Gox.
You can spend Bitcoins on sites like PizzaForCoins, which will take your Bitcoin payment and then place your pizza order with Domino's Pizza (DPZ) or Yum Brands' (YUM) Pizza Hut. A large, hand-tossed pizza from Pizza Hut costs about 0.1227 Bitcoins.
The price of a single Bitcoin was volatile Wednesday, hitting about $134 at midday (making that pizza order worth $16). You can watch the real-time price of the Bitcoin here.
Bitcoins have skyrocketed in value, and that's what observers are buzzing about these days. In 2010, a single Bitcoin was worth 4 cents. Two weeks ago, it was worth $47. This week has seen wild price swings, with a Bitcoin hitting $147 at one point. The entire value of all the Bitcoins in the world soared past $1 billion.
People are pouring money into Bitcoins for all kinds of reasons. They are a hedge against, well, all currencies. They are a new way to store your money -- which is certainly appealing to Europeans who watched the government raid Cyprus bank accounts. They are an alternative to stocking up on gold.
And this is leading to intense speculation about a bubble in the making. "The bitcoin bubble is about to wipe out some very gullible nerds," CNBC's John Carney tweeted Wednesday. Another Twitter user described Bitcoins as 21st-century tulip bulbs.
Hmmm. A world wide currency. Here's something I read:
"The plan for a global currency or a one world economic order is a matter that transcends political parties," writes Hagmann. "Those who continue to argue in the Republican-Democrat meme are doing nothing more than providing entertainment to distract people from the real issue, that of the global elite versus the rest of us."
Just something to think about....
The IRS will no doubt be interested in the few "lucky" winners who cash out before the crash.
History repeating itself again. Do we see trading Tulip bulbs coming back again.
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Reviewing overnight developments:
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- In economic data:
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