Bitcoin

A few months ago, my boyfriend Ron became obsessed with the online peer to peer currency Bitcoin. Essentially a bitcoin is like a dollar, a pound, a yen, a euro, a peso, except instead of placing it in the hands of someone else when you want a good or service, you give it to them electronically. You can get bitcoins in two ways: first you can buy them with your dollars, pounds, yen, euro, or pesos, and second you can generate them. Generating sounds like a pretty good deal but let me explain how it works.

In order to generate a bitcoin your computer must solve a complicated cryptography problem which all of the other generators are also trying to solve. If your computer is the first to solve it, you get a bitcoin. This leads to possibly the most interesting aspect of bitcoins: The more computers that are trying to generate bitcoins, the harder the cryptography problem you are given. This system essentially sets the interest rate of bitcoins, eliminating the need for... oh say, the Fed.

Bitcoins have a lot of really great applications and really interesting economic applications. I have COMPLETELY oversimplified a lot about them in this post, but I'd recommend checking them out further to get the whole scoop, or maybe even investing in some yourself!

For more info: http://www.bitcoin.org