First devised in 2008, Bitcoins are a digital currency that is created through a computer program and deposited into virtual online wallets. Exchanges exist where people can trade Bitcoins for other types of currency. Payments to merchants who accept Bitcoins can be made on a computer, smartphone, or tablet by entering the recipient’s address and payment amount.
Because Bitcoins are digital, they do not exist in a physical sense, nor are they issued or backed by any central bank. They can also be transferred to anyone, anywhere in the world, thereby bypassing banks.
Since Bitcoins are an independent, global currency, they cannot be manipulated. New Bitcoins are regularly “minted,” but there is a limit to the number that can be created. This helps prevent inflation; but not speculation.
There are currently around 12 million Bitcoins in circulation. After the year 2140, no more Bitcoins will be minted, and the total amount available will stand at 21 million.