What is a bitcoin?
Updated On: Apr 14 2014 10:51:55 PM CDT
You may have heard of a bitcoin, but do you know what it is? Local 2 got a lesson from two university students.
Jake Smith, a University of Houston student, explained that it's like a digital gold.
Bitcoins started on an underground market, but they can now be legally used to buy all sorts of things, including renting an apartment or buying a boat.
"You can buy concessions at a Portland Trailblazers game," said Rice University fellow Chris Bronk.
Kevin Moore is trying to expand bitcoin to Bayou City coffee shops and restaurants.
"Merchants (are) looking to accept bitcoins to reduce costs of doing business," Moore said. "We show them how to accept bitcoin, save bitcoin, store bitcoin."
So, how much is a bitcoin worth? Right now, one bitcoin equals about $450, and it's constantly changing based on the open market for the currency.
Bitcoins can also be bought through an online exchange.
"It's a commodity that gets traded and one would assume a level of demand for the commodity determines what it's price is," Bronk said.
You can also buy and sell bitcoins and check the balance of them on your digital account using an ATM.
"You would put in your phone number," said Sheldon Weisfeld, with CoinVault. "This particular machine, the CoinVault ATM, has a palm scanner in it."
There are also no transaction fees and a much lower risk of identity theft with bitcoins.
"There is no exchange of personal information for me to send you a bitcoin," Smith said. "All I can see is an account number on the screen. I'm just sending a bitcoin to that account number."
So, is the bitcoin the wave of the future?
"Where bitcoin does have a true advantage is that processing transactions is much cheaper with bitcoins, so I think that's where technology could take off," Smith said.
"You can take a smartphone today and literally with a few key strokes send money and pay bills," Weisfeld said. "That is the power of the Internet and the bitcoin technology as we know it."