Business

The rise of bitcoin

Published 9:38 AM ET, Tue December 10, 2013
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Bitcoin is an experimental digital crypto-currency unregulated by a central bank where its value -- like many real-world currencies -- is determined by how much people are willing to use it. Here, software engineer Mike Caldwell of Sandy, Utah holds physical Bitcoins he minted in his shop in April this year.
Producing Bitcoins or "mining" them is the end product of a computer solving a complex mathematical problem creating one new block of 25 Bitcoins. The difficulty of the equations gets harder as each problem is solved to stabilize how many Bitcoins are released into the eco-system. Getty Images
But the Bitcoin algorithm is limited. It has already been determined that only 21 million Bitcoins can ever be mined. At present an estimated 11 million Bitcoins have been released into the market. George Frey/Getty Images/File
If you haven't got the math skills or supercomputer to mine for Bitcoins, adopters can acquire the crypto-currency through Bitcoin exchanges like Japan's Mt. Gox. Once procured, users hold their money in an online wallet which they can then use to purchase goods and services. Getty Images
Tony Gallippi, co-founder and CEO of BitPay, a Bitcoin payment processing service holds up a nickel while testifying before a U.S. Senate committee hearing on virtual currency last month. He told CNN: "For small businesses that have unique items, [Bitcoin] really opens up their business to a truly worldwide customer base." Getty Images
U.S. Federal Reserve Vice Chair Janet Yellen (pictured here) says the United States are studying the potential risk from online payment mechanisms like PayPal and Bitcoin. This came after some bankers expressed concerns over how these newer players enabled by the Internet could impact the financial system. PETER PARKS/AFP/Getty Images/File
While some central banks examine the legitimacy of Bitcoin, the People's Bank of China announced Thursday the digital currency has no legal status and has placed a ban on financial institutions from handling it. Getty Images
But that has not yet stopped the popularity of Bitcoin growing. A terminal to accept payments using Bitcoins (pictured) is displayed on the bar at the Old Fitzroy pub in Sydney, Australia on September 19, 2013. Cameron Spencer/Getty Images
Customers scan a QR code to pay for drinks or food using Bitcoins at the Old Fitzroy in Sydney -- the first pub to accept the virtual coins in Australia. Getty Images
The first Bitcoin ATM made its debut at Waves Coffee House in Vancouver this October. The ATM instantly converts traditional cash to the virtual currency, but limits users to a $1000 daily limit. David Ryder/Getty Images/File