In a nutshell, Bitcoin was created to eliminate the middleman when two parties exchange payment for goods and services. No banks and third-party networks such as Visa or MasterCard are involved in the payment process. And the transaction is all but anonymous.
At the moment, some 12,450,000 bitcoins (the coin is small “b”, the currency is capital “B”) are in circulation at a value of roughly $6.5 billion. Bitcoin’s value fluctuates daily. A whole bitcoin was worth $1,104 at one point in the last five months.
Some have compared the current state of Bitcoin to the Internet in 1994 or 1995, so it should come as no surprise that investors such as Marc Andreessen (of Netscape fame) and the Winklevoss twins are jumping on the Bitcoin bandwagon.
The infographic on the left, sponsored by Jumio and Bitcoin Identity Security Open Network, explains some of Bitcoin’s basic elements, including how to use it and some finer points about its volatile nature.