ORLANDO, Fla. — Bitcoin — you’ve probably heard of it, but do you know how it works? Read nine things to know about the cryptocurrency below:
1. Bitcoin is the world’s first and largest cryptocurrency, a digital token sent electronically that has no physical backing and is not controlled by a government or bank.
2. An anonymous programmer created Bitcoin in 2008.
3. The price of Bitcoin is determined by open-market bidding on Bitcoin exchanges. Like gold, its price fluctuates, but it can be extremely volatile.
4. Bitcoin exchanges and transactions are recorded on a network of decentralized computers called the blockchain.
5. Bitcoin can be bought and sold on websites, but it can take up to seven days for it to show up in a virtual wallet.
6. It can also be traded in person by scanning a QR code using a digital wallet on a cellphone or by using a Bitcoin ATM.
7. Cryptocurrencies are an attractive asset to donate because they allow donors to bypass the capital gains tax, and they provide an income tax deduction.
8. Bitcoin can be attractive to criminals because it allows them to anonymously open a wallet.
9. It is a popular method for making ransom payments when a computer system is taken over by ransomware.
The Associated Press contributed to this report.