If you’re like most consumers, you’ve probably heard of bitcoins, but don’t understand what they are.

In simple terms, bitcoins are a form of ?digital money or currency that allow for instantaneous transactions over the Internet. Bitcoins are often referred to as decentralized virtual currency because there is no central controller over the system and no actual physical currency (as opposed to our most common system, which basically is centrally controlled through the U.S. Federal Reserve Bank and uses physical — coin and paper — money).

Bitcoins allow for payments between parties for goods and services. Bitcoin transactions are verified online by what are known as nodes, and are tracted (i.e., recorded) through a public ledger known as a block chain.

Bitcoins are created as a reward wherein bitcoin users offer their computing power to verify and record payments in a public ­ledger. This process is known as mining, with the reward to so-called “miners” being transaction fees and newly created bitcoins.

Probably the major incentive for conducting and accepting transactions via bitcoins is that the fees for bitcoin transactions are lower than the fees (usually 2 percent to ?3 percent) that credit card processors charge. (One way of looking at it is, it’s a way for a purchaser and merchant to get the discount often received for buying gasoline with cash — as opposed to a credit card — but still being able to conduct the process electronically.)

On the other hand, there are numerous drawbacks to bitcoins. One is that users of bitcoins are generally not entitled to the refund rights users of credit cards receive. Additionally, as their use grows, so, too, does criminal activity. This includes (just to name a few) online theft of bitcoins from bitcoin “owners,” bitcoin-based Ponzi schemes and unauthorized/illegal mining of bitcoins.

Perhaps the greatest reasons for consumers to avoid bitcoins is their newness, the fact that so few people understand them, and the fact that they are unregulated. The most prudent course for consumers at this point is to avoid using them, and, most certainly, do not in ANY WAY “invest” money into any bitcoin-based “investment offer” that you think will return a large profit.

Rick Shaffer is host of Boston Herald Radio’s “BizSmart,” weekdays from 4-6 p.m.