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Bitcoin Logo Bitcoin was founded as a cryptocurrency and the first decentralized digital currency in the world under the name Satoshi Nakamoti in 2009. It has since been identified as a pioneer for future virtual currencies. With this form of currency, there is no central monetary authority and no financial intermediary required in order to complete transactions. As a direct consequence of these facts, no central authority can add a significant amount of currency to the market and devalue the Bitcoins already in circulation and international transactions can be completed with ease and at a lower cost because the costs of exchange rates are eliminated. The ease with which Bitcoins can be transferred can be saliently demonstrated by comparing it to transactions involving credit cards because when making a payment with a credit card there are ultimately five parties involved. These five parties include: the buyer, the credit card issuer of the buyer, the credit card network, the credit card processer of the merchant, and finally the merchant. With Bitcoin, the coins are transferred directly between the two parties involved in the transaction.

Unlike cash, Bitcoins are not a tangible form of currency to the extent that they only exist as entries in an electronic ledger named the blockchain. This ledger consists of a record of every transaction using the cryptocurrency. Digital miners have the capability of releasing Bitcoins by solving complex digital math problems. It was designed so that over time it becomes more and more difficult to mine for Bitcoins and so that the total number that can ever be mined is capped around 21 million. As the currency gains traction and more people begin to mine for it, the math problems required to release them become more and more complex. As of November of 2013 approximately 12 of a total 21 million Bitcoins were in circulation. The projected full release date is in 2140, meaning at this time it is expected that all 21 million units will be in circulation. Moreover, it is projected that miners will be able to generate an income by charging transaction fees as the currency gains traction and popularity.