ORLANDO, Fla. — Bitcoin — you’ve probably heard of it, but do you know how it works? Read nine things to know about the cryptocurrency below:
1. Bitcoin is the world’s first and largest cryptocurrency, a digital token sent electronically that has no physical backing and is not controlled by a government or bank.
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2. An anonymous programmer created Bitcoin in 2008.
3. The price of Bitcoin is determined by open-market bidding on Bitcoin exchanges. Like gold, its price fluctuates, but it can be extremely volatile.
4. Bitcoin exchanges and transactions are recorded on a network of decentralized computers called the blockchain.
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5. Bitcoin can be bought and sold on websites, but it can take up to seven days for it to show up in a virtual wallet.
6. It can also be traded in person by scanning a QR code using a digital wallet on a cellphone or by using a Bitcoin ATM.
7. Cryptocurrencies are an attractive asset to donate because they allow donors to bypass the capital gains tax, and they provide an income tax deduction.
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8. Bitcoin can be attractive to criminals because it allows them to anonymously open a wallet.
9. It is a popular method for making ransom payments when a computer system is taken over by ransomware.
The Associated Press contributed to this report.
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