MORE ABOUT BITCOIN

Bitcoin is built on a distributed digital record called a blockchain. As the name implies, blockchain is a linked body of data, made up of units called blocks containing information about each transaction, including date and time, total value, buyer and seller, and a unique identifying code for each exchange. Entries are strung together in chronological order, creating a digital chain of blocks.
“Once a block is added to the blockchain, it becomes accessible to anyone who wishes to view it, acting as a public ledger of cryptocurrency transactions,” says Stacey Harris, consultant for Pelicoin, a network of cryptocurrency ATMs.
Blockchain is decentralized, which means it’s not controlled by any one organization. “It’s like a Google Doc that anyone can work on,” says Buchi Okoro, CEO and co-founder of African cryptocurrency exchange Quidax. “Nobody owns it, but anyone who has a link can contribute to it. And as different people update it, your copy also gets updated.”
While the idea that anyone can edit the blockchain might sound risky, it’s actually what makes Bitcoin trustworthy and secure. For a transaction block to be added to the Bitcoin blockchain, it must be verified by the majority of all Bitcoin holders, and the unique codes used to recognize users’ wallets and transactions must conform to the right encryption pattern.
These codes are long, random numbers, making them incredibly difficult to produce fraudulently. The level of statistical randomness in blockchain verification codes, which are needed for every transaction, greatly reduces the risk anyone can make fraudulent Bitcoin transactions.
image In the U.S., people generally use Bitcoin as an alternative investment, helping diversify a portfolio apart from stocks and bonds. You can also use Bitcoin to make purchases, but there are some vendors that accept the original crypto.
Big companies that accept Bitcoin include Microsoft, PayPal and Whole Foods, to name a few. You may also find that some small local retailers or certain websites take Bitcoin, but you’ll have to do some digging.
You can also use a service that allows you to connect a debit card to your crypto account, meaning you can use Bitcoin the same way you’d use a credit card. This also generally involves a financial provider instantly converting your Bitcoin into dollars.
In other countries—particularly those with less stable currencies—people sometimes use cryptocurrency instead of their own currency.
Bitcoin provides an opportunity for people to store value without relying on a currency that is backed by a government. It gives people an option to hedge for a worst-case scenario. You’re already seeing people in countries like Venezuela, Argentina and Zimbabwe (countries heavily in debt) where Bitcoin is getting tremendous traction.
When you use Bitcoin as a currency, not an investment, in the U.S., you do have to be aware of certain tax implications.