The virtual currency bitcoin has long been used by gamers to buy extra features online. But now users can spend their savings on real life pints as in the past few weeks some British pubs in London and Cambridge have started to accept the online coins in the real world. Here’s the Quickfire Science on the currency with Hannah Critchlow and Dominic Ford.
· Bitcoin is an online currency which can be exchanged from person to person without the need for a bank or other financial intermediary.
· It can be used in any country and aims to be independent of any central control.
· The currency was first described in 2008 in a paper by an anonymous person or group under the name Satoshi Nakamoto.
· A year later the same group published the first freely available bitcoin software and issued the first pieces of currency
· Each bitcoin is a specific piece of computer code. As well as exchanging bitcoins, users can ‘mine’ for new currency with their computers.
· Computers ‘mine’ by solving complex mathematical equations which hold bitcoins in the network – the difficulty of these changes depending on how many coins are being released.
· There are plans to limit the number of bitcoins to 21 million which are predicted not to be uncovered until the year 2140.
· Although there is no central bank, all transactions made using bitcoin are noted in a public transaction log. This means no-one can try to pay for multiple purchases using the same coins.
· Each transaction on the log is also ‘signed’ by a private code that is associated with the users’ bitcoin wallet – proving it came from the correct owner.
· To use bitcoins in the real world the shop produces a QR code for the purchase which the customer then scans with their phone using a bitcoin app.