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Financial 411: All About Bitcoin

Thursday, June 30, 2011

Tuesday marks the last day of the Federal Reserve's QE2 or quantitative easing, a program to strengthen the U.S. economy through the purchase of $600 billion in bonds. As it comes to a close, QE2 is getting mixed reviews. The economy is growing, but at a lackluster pace. Stock are up, but the dollar is down.

That's part of the reason for the increasing interest in one currency that has recently skyrocketed in value. It's called bitcoin, and it's become the new "gold." It's a digital currency that exists outside government control โ€” for now โ€” and outside the U.S. banking system. A libertarian's dream. Bitcoin was trading at 10 cents last summer, when it first launched. Now it's trading at nearly $17.

NPR's Jacob Goldstein, who is part of the Planet Money team, said it's still a small, experimental currency. "It's a very technically-focused group of people who use these, so you can buy stuff online, you can buy coffee, you can buy alpaca socks, it's definitely not practical yet," he said.

Goldstein said you can buy and sell anonymously online using bitcoins. New York Senator Charles Schumer has called the bitcoin "an online form of money laundering," saying it fosters illegal activities.

Goldstein breaks down the "wild west" of the bitcoin world. A longer podcast version of this story will also be available at Planet Money.

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Comments [12]

TraderTimm

Here's a few short videos that encapsulate just a few reasons why bitcoin is preferable over our current payment systems:

http://www.youtube.com/user/BitcoinAds

Enjoy!

Jul. 02 2011 08:23 AM
BitBetter from austin

Yes, indeed you can even order pizza with bitcoins. http://bitbetter.dyndns.org/wordpress/bitcoin/bitpizza/

Jul. 02 2011 12:10 AM
Stephan

I think it's more than a little misleading to call bitcoin "online money laundering". It's quite simply online cash.

I'm sorry if you have a problem with the concept of cash; I have a problem with banks and corporations tracking, compiling and eventually losing all of my personal financial history. In a world that is becoming more digital every day, electronic cash becomes a necessity.

Jul. 01 2011 01:38 PM
Jaime Frontero from Minneapolis

Next time I'm back home in New York I have to stop by the restaurant BTCVC mentions and buy lunch with Bitcoin.

It was the Meze Grill, here:

http://www.mezegrill.com/

Jul. 01 2011 01:34 PM
John from Central Florida

I also use Tradehill.com, very easy to use. Here is my referral code, if anyone needs one to use: TH-R13481

Jul. 01 2011 10:31 AM
Ryan from Chicago

I agree with the poster above, we are a business that just started accepting bitcoins. Within hours of setting this up, we had our first Bitcoin paying customer.

http://babbletees.com/blogs/news/3494702-babbletees-now-accepting-bitcoins

Why?

Because we pay $15,000+ a year to companies like paypal and authorize.net.

When there is fraud - not only do we ship goods, but we also end up getting the charges reversed from the CC company.

Bitcoins are a blessing to any small online retailer that is looking for a simple/low risk payment solution.

Jul. 01 2011 09:23 AM
dacoinminster from Seattle

No mention of how to actually buy some bitcoins if people want to try this out??

I personally use and recommend http://www.tradehill.coim - they have lower fees than the main exchange (mtgox.com), and their site seems more professional IMHO.

Also, I have a code that will get you 10% off trading fees for life at TradeHill if anybody wants to buy/sell bitcoins there: TH-R1168

Jul. 01 2011 08:38 AM
Dr Gizmo from USA

Bitcoin is the way you monetize all the information on the web... that's the power, bits not Bricks get smart, ...awake up! get in this new economy, this currency BTC has no debt, and never will ....this "monetize I zation" will be called the "tip jar economy"... learn it / embrace it or get crushed buy it ... the gov can not stop it ever P to P, global movement...so witch gov. ours we broke, ...too much debt / shoejew is done.he needs a new job he done.

Jul. 01 2011 03:51 AM
Frank

They now have a real tangible physical bitcoin that you can buy at CoinedBits.com

Jul. 01 2011 03:04 AM
BTCVC

There was a a very good online article recently about a woman who paid for her lunch with bitcoin using a smartphone in manhattan.

Jul. 01 2011 02:39 AM
howdy from detroit

If you can sell your bitcoins for $17 USD, I would say that it is in fact very practical, and I'm glad I bought my 6950s and got to mining when I did =D

Jul. 01 2011 01:47 AM
jostmey from Chicago

I would like to point out that you can buy way more than just alpaca socks. You can now buy just about everything with bitcoins. To see the volume of merchandise available, you have to look at sites like searchbitcoin, bitucopia, and bitcoinme (shopping tab). The bitcoin economy is definitely taking off.

Jul. 01 2011 01:23 AM

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