Breaking down Bitcoin

Take KARE of your Money: Breaking down Bitcoin

MINNEAPOLIS - The value of Bitcoins hit an all-time high in May. But what do you really know about this digital dollar? Is this crypto-currency here to stay?

"Bitcoins are these cyberspace creations which some people assign a lot of value to. Some place it over $2,000 per unit," explained Andrew Odlyzko, Professor of Mathematics at The University of Minnesota.

There are two ways of acquiring the digital dollar.

"One is you become one of the miners. The standard way of getting Bitcoin is you buy them," Odlyzko said.

Users can purchase portions of Bitcoin, add them to your web wallet and check out with the Bitcoin option.

Skeptics of the cyber cash insist the virtual currency has major issues.

"It can be hacked. It can also be stolen. The main problem is the price might crash. It might vaporize and it might be worth zero the next day," Odlyzko said.

Bitcoin believers say removing the banks and government from the market is a benefit, but if your clickable currency is hacked or stolen, there's no online authority to turn to.

"It's definitely not a stable currency," Odlyzko said. "It truly depends on your risk tolerance. I am skeptical I don't fully understand the high value that's attached to it. I certainly don't advise people to invest."

© 2017 KARE-TV


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