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Originally Posted by lfdsteve
Ok is "purchasing bitcoin" referring to stock in the company or is it an actual item ( albeit digital)? How does one purchase?
Steve
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Bitcoin is not a company and isn't centralized. Note that there are organizations supporting bitcoin use (i.e. the Bitcoin Foundation) but they didn't create it.
So when people talk about "buying Bitcoin" they mean they exchanged dollars for units of bitcoins (think like exchanging dollars for canadian dollars or japanese yen).
To exchange dollars into bitcoin you need to either go on an "exchange" site (think something like E*Trade or Scottrade but instead of choosing from stocks to buy you can only buy one thing - Bitcoin). In the US, the only established one is Coinbase (coinbase.com). It's based out of San Francisco and is legit. --- OR you can buy from people directly (i.e. find someone who has some Bitcoin already and say 'hey i'll pay you XXX dollars for YYY bitcoin ok?' and they accept, you give them some payment and they give you the bitcoin (all electronically). Web sites exist to connect buyers in sellers in this regard.
Bitcoin is a currency (legally the US goverment hasn't classified it as such though) that happens to be virtual. There's a nify quick intro video I found:
http://www.weusecoins.com/en/ that tries to explain how it works.
The bottom line is that it's all based on an algorithm / protocol so its rules are set pretty hard in stone and perhaps more importantly it's secure in the sense that a sort of public ledger file records every bitcoin transaction ever (in an anonymous way) for the sake of protecting against things like double spending a single bitcoin (kinda like you'd expect your bank to make sure someone doesn't write you a check with no funds behind it, but this does it in a decentralized way so it can't be hacked all while keeping it anonymous).
So far - the people who have gotten into it are the geek/nerd types who like it from a math/computer standpoint, drug/illicit people who like it from the anonymity standpoint, and libertarian types who like it from the standpoint that they're upset about the monetary policies going on here and around the world (I.e. Fed. printing billions and billions of new dolalrs).
As of late with all the media attention due to price rises, Wall Street has started to get interested along with more 'regular' people looking to make some cash on it.
Not sure if it will tank to oblivion, serve as a demo of future currencies (and then crash to oblivion), or last as an alternate currency.
--- ONE LAST way to get in on bitcoin that's still upcoming are investment companies that buy bitcoin and you can buy shares of that company's fund (like a mutual fund that invests in oil and you buy that fund - but not the oil directly). This is what the Winkelvoss twins are doing (those douchy-looking guys that claimed they actually came up with Facebook if you ever saw that movie the Social Network).