What is "Bitcoin"? - Toledo News Now, Breaking News, Weather, Sports, Toledo

What is "Bitcoin"?

Posted: Updated:
CHARLOTTE, NC (WBTV) -

At his Cornelius coffee shop, Tony Vo accepts payments in the form of cash, credit, debit, gift cards and Bitcoin.

"We have people come in who say they don't even like coffee, they just wanted to pay with Bitcoin," Vo said.

He offers his customers the opportunity to pay in digital currency because he does believe there is a future in bitcoin and similar types of payment.

We asked Cyber Expert Theresa Payton to explain what Bitcoin is, how it works, and how to safely make transactions using it:

How does it work:

1.  There are some similarities to PayPal except it does not use the US $ or other currencies as its base.  Just bitcoins.  Bitcoin is an online financial network that people use to send payments from one person to another.

2.  You can buy Bitcoins online and some ATMs have popped up that let you deposit physical money for Bitcoins

3.  You will need to find a way to secure your money on your smart phone just as you would secure your PayPal or credit and debit cards

4.  You will be assigned a Bitcoin address that you should not broadcast out to the world

5.  There is no "central bank" for Bitcoin like most countries have for their currencies.  Nobody really owns the network

6.  Its just computer, the internet, and "miners" making it all happen

7.  The Bitcoin network keeps track of balances in a block chain

8.  All Bitcoin money handling happens with private keys

9.  Prices are volatile.  Transactions cannot be reversed.

10.  Bitcoin warns you that instant transactions are less secure because there is a time lag where the person could try to cheat you out of the transfer.

11.  If you make money in the Bitcoin world, you do have to pay taxes on it

Web Resources:

For tips on how to get started with Bitcoin, click here

For help learning how to secure your Bitcoin wallet, click here.

To see Cyber's Most Wanted list, click here

Copyright 2014 WBTV. All rights reserved.