Bitcoin is a decentralized cryptocurrency that offers pseudonymity to its users. Although a Bitcoin has no intrinsic value, it's becoming an increasingly popular form of digital currency, attracting venture capitalist attention, from Fred Wilson of Union Square Ventures to the Winklevoss twins.
There is a limited supply of Bitcoins, 21 million in total, with 11 million currently in circulation. While Bitcoin allows you to keep your identity concealed, the block chain acts as a public ledger of every Bitcoin transaction. Part of their appeal, Bitcoins can avoid centralized banking fees and international money wiring fees.
There are a few different ways to acquire Bitcoins. You can mine a Bitcoin, but as the computing power people dedicate to mining Bitcoins increases, it becomes increasingly difficult to do so. You can also set up a wallet via Blockchain.info, or through a secure Bitcoin client like Coinbase, and use sites like Bitinstant to load it.
For a quick and easy way to determine the value of your Bitcoin in fiat money, check out this Bitcoin exchange calculator designed by TurboTax.
Do you have a Bitcoin wallet set up? Let us know in the comments section below.