Bitcoins only exist in the virtual world, although a software engineer in the US did mint his own (Picture: AP)

Show me the money.

But in the case of Bitcoin, there is no hard cash to show. This currency is digital and isn’t distributed from a central bank, but can be ‘mined’ by anyone with a computer. A really powerful computer.

Bitcoin’s value and profile exploded this month in a swirl of online word-of-mouth, media hype and genuine economic strife – the financial situation in Cyprus is the latest to make people look elsewhere when it comes to currency.

More and more organisations are turning to Bitcoin. Bloggers on WordPress.com can use it to pay for upgrades to their websites, while online dating services and holiday rental companies also accept payments in Bitcoin. It is also used in black marketplace Silk Road to pay for illegal goods – Bitcoin lets its users remain anonymous.




The plan for Bitcoin, which has been available since 2009, is to keep releasing the currency incrementally until about 2040, when a final total of 21m Bitcoins will be in circulation. There are currently 11m. They are unearthed by mining increasingly complex mathematical problems by computer.

From being worth a couple of dollars a year ago, the value of a Bitcoin leaped to more than $260 earlier this month, although it has since fallen to about a quarter of that. The price fluctuations have led many economists to brand Bitcoin a bubble, and the news this week that Bitcoin exchange BitFloor is closing its trading operations is a blow to the currency and those championing it.

Others maintain it is revolutionary regardless of its worth. Because it cannot be touched by governments, Bitcoin offers an alternative to the currencies toppling around the world.

Other cryptocurrencies such as Litecoin, PPCoin and the incoming Ripple show the impetus is there to go digital.

Whatever the worth of the Bitcoin itself, it illustrates that the way we look at our money has already changed.