Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
Bitcoin has been criticized for its use in illegal transactions, its high electricity consumption, price volatility, and thefts from exchanges. Some economists, including several Nobel laureates, have characterized it as a speculative bubble.
Bitcoin has also been used as an investment, although several regulatory agencies have issued investor alerts about bitcoin.
Commodity Futures Trading Commission has classified bitcoin as a commodity, and the Internal Revenue Service classifies it as property for tax purposes.
Is Bitcoin Fake Money?
No, Bitcoin is not fake money. While it has been criticized for its use in illegal transactions, high electricity consumption, price volatility, and thefts from exchanges, it is still a legitimate form of currency that is accepted by over 100,000 merchants and vendors around the world.