I first heard about Bitcoin when Steve Gibson did a podcast on it a few months ago. Essentially, it’s a medium of exchange just like any other currency. The major differences are 1. “coins” are simply bits in the system with no physical reality (actually, most of the US money supply has no physical reality either, but that’s a post for another day), 2. transfers can’t be traced, and 3. there is little to no transaction cost. Jason Calacanis, a well known tech entrepreneur, recently made the following statements about the open source project.
1. Bitcoin is a technologically sound project. 2. Bitcoin is unstoppable without end-user prosecution. 3. Bitcoin is the most dangerous open-source project ever created. 4. Bitcoin may be the most dangerous technological project since the internet itself. 5. Bitcoin is a political statement by technotarians (technological libertarians). 6. Bitcoins will change the world unless governments ban them with harsh penalties.
There are currently a number of exchanges where it is possible to buy and sell bitcoins using real-world currencies. It’s a money launderer’s dream come true; just like anything else using encryption, it’s math, it exists and there’s not much authorities will be able to do about it.