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Bitcoin has taken some hits in the mainstream media the past six months, but you’d be hard-pressed to find a bank industry executive not talking about the cryptocurrency’s threat to legacy payments systems once they understand how it works.
The infographic below, sponsored by Jumio and Bitcoin Identity Security Open Network (BISON), explains some of Bitcoin’s basic elements, including how to use it and some finer points about its volatile nature.
In a nutshell, Bitcoin was created to eliminate the middleman when two parties exchange payment for goods and services. No banks and third-party networks such as Visa or MasterCard are involved in the payment process. And the transaction is almost completely anonymous.
At the moment, some 12,450,000 bitcoins are in circulation at a value of roughly $6.5 billion. Bitcoin’s value fluctuates daily. A whole bitcoin was worth $1,104 at one point in the last five months.
Some have compared the current state of Bitcoin to where the Internet was in 1994 or 1995, so it should come as no surprise people like Marc Andreessen of Netscape fame and more contemporary investors such as the Winklevoss twins are jumping on the bandwagon now.