bitcoinBitcoin is a form of digital currency, created and held electronically. It’s the first example of a growing category of money known as cryptocurrency. No one individual or organization controls it. Bitcoins aren’t printed, like dollars or euros or Pound Sterling – they’re produced by people, and increasingly businesses and “mining” networks, running computers all around the world, using specific software that solves complex mathematical problems.

Bitcoin is not physically printed by a central bank.  This is a great advantage because banks can simply produce more money to cover the national debt, thus devaluing their currency.  There is only a finite amount of ‘coins’ that can be found by the ‘mining’ process meaning that when the last ones are revealed there is a set amount of currency.  Whilst the value of the currency may rise and fall it cannot be devalued by a sudden production of more currency.

Instead, it is created digitally, by a community of people that anyone can join. The ‘coins’ are ‘mined’, using computing power.  This network also processes transactions made with the crypto currency, therefore making bitcoin its own payment network.

Any of us can buy and sell cryptocurrency now, but the interesting part comes from joining a Bitcoin mining pool and participate in finding or “unearthing” new coin.  This can create very exciting returns and your investment can be compounded over time.