Friday, April 26, 2013

Amazing! Could you believe this? PayPal to implement Bitcoin?

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PayPal reached 20 billion $ in mobile transactions, being the most used mobile e-wallet. With this occasion, the president of PayPal appeared on Bloomberg TV, but the main topic of the discussion was not this accomplishment, but the long debated and contested Bitcoin. David Marcus expressed his admiration for this concept, saying that he considers the implementation of this currency into PayPal.

As PayPal was always opened to new ideas and innovations, vision that allowed them to remain the leader in this market for almost twenty years, we might take the possibility of having bitcoin available for trading on this platform soon. PayPal might accept bitcoins as a payment method, but for the moment, the project is only in the phase of intentions. On the other hand, as the idea is encouraged by the president of the company itself, we might trade bitcoins on PayPal sooner than expected.

PayPal and Jamba Juice managed to create a new iPhone application that offer the possibility of advanced payment and withdrawal features. The principle is simple. The users of the app can find the nearest Jamba Juice store, they can pay for the order on their phones, and the juice will be ready upon their arrival. This perfect app can accept Bitcoins, not because there is a strong connection between Jamba Juice and bitcoins, but because the app can be easily modified to accept a bitcoin wallet for the same transactions.

The convenience of paying with e-wallets on mobile platforms attracted many users and merchants, especially because the clients seem to be very receptive to those methods, especially because today, it is possible to pay online, offline, and with the help of the latest mobiles, it is even possible to pay “on-air”, simply by touching the phone with the special devices made with this purpose. Considering that those structures are perfect for adapting the bitcoins, we might see it implemented in a few months. In addition, some merchants expressed their interest for this method, as it will save them time and money, giving them access to this fascinating currency.

Besides this, the security of transactions was also discussed. As identity theft seems to be an increased problem today, the PayPal president revealed his plans to limit the consequences of those actions. PayPal works with Google and Lenovo to create new authentication methods that will offer an increased security for transactions, especially for mobile payments. Marcus expressed his interest for this topic, saying that safer transactions will allow PayPal to consolidate its position as the leading e-wallet in the world.

Bitcoin is a secure method of paying, as the risk of identity theft is eliminated. While financial details about credit cards can be stole, the bitcoin is made under a principle that eliminates this possibility. Now, people can send bitcoins directly to a merchant using the bitcoin address, without being worried about financial details being stolen.

Marcus opened a new door, but also place for speculations about the future of bitcoin as a legitimate and generally accepted currency, increasing its reputation even more. -

Incredible: U.S. Producers Crowdfund Bitcoin for Internet Cash Documentary - The Rise and Rise of Bitcoin

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"The Rise and Rise of Bitcoin" is being shopped this week at the Canadian festival as it includes the controversial robo-money in its production budget.

VANCOUVER – The Internet cash documentary The Rise and Rise of Bitcoin is using the controversial robo-money to complete production.

Bitcoin crowdfunding has been used by U.S. co-producers Daronimax Media and 44th Floor Productions to finance the feature documentary from director Nicholas Mross, being shopped this week at the Hot Docs festival in Toronto by sales agent Ballinran Entertainment.

VIDEO: Sean Parker Talks About the Rise of Napster in Trailer for 'Downloaded' Documentary
As the documentary about a computer programmer obsessed by Bitcoin is shot in North America and Japan, part of the film's budget has been crowd-funded through the crypto-currency and Paypal.

The donations tab on the film’s crowdfunding web site accepts investment from the Bitcoin community, which is then converted into American dollars using a Bitcoin trading exchange.
The Rise and Rise of Bitcoin chronicles the rise of Internet currency minted by computers that central banks are struggling to control and national governments are looking to tax.

“We’ve witnessed the power of social networking and its ability to influence change,” Mross, a graduate of the Toronto Film School, explains.

The documentary, scheduled for release in early 2014, follows the evolution of Bitcoin through the story of a 35-year-old computer programmer from Pittsburgh and other entrepreneurs and start-ups. -

Chinese “One Foundation” First to Accept Bitcoin, Receives $30,000

bitcoin news, latest bitcoin news - Chinese One Foundation First to Accept Bitcoin, Receives $30,000 New Bitcoin World
The One Foundation, the first officially recognized private charitable fundraising organization operating in China, has now also become the first Chinese organization to start accepting Bitcoin donations. The organization published a donation address on April 23, and received 230 BTC ($30,000) within two days, instantly making it one of the most successful Bitcoin charities to date.

The One Foundation was originally created in 2007 by renowned Chinese film actor Jet Li, who then took a year off film-making in 2008 to promote the foundation. Private fundraising organizations are highly regulated in China – even now most applications to create one are simply rejected, so for the first three years of its operation the One Foundation was not even an independent organization; instead, it operated under the umbrella of the Red Cross Society of China, a government-connected organization operated by the Ministry of Health. However, its partnership with the Chinese Red Cross was a restrictive one. “Jet Li complained that the One Foundation had little say in deciding on the use of money it had raised,” Xinhuanet’s Wu Chen and Wu Caixia write. “According to his plan, his foundation sought to focus more on supporting domestic grass-roots NGOs, which lack both money and professionals, while the Red Cross Society of China is an organization paying more attention to disaster relief.”

In 2009, the Chinese government started a trial project in its “special economic zone” in Shenzhen to streamline the registration process, allowing the local government of Shenzhen to register foundations – a power previously only held by the federal government. Shenzhen authorities were willing to work with the One Foundation, and it was finally able to register as an independent foundation in 2010. In 2011, the Chinese Red Cross’s reputation was damaged by a scandal in which a 20-year-old claiming to be the “commerce general manager” of the organization, Meimei Guo, publicly flaunted artefacts of an extravagant lifestyle that many assumed had been paid for with charity money (it was later discovered that she was the girlfriend of someone involved with the Red Cross; he has since resigned). Concerns over government corruption and extravagance are common in China; the Chinese Red Cross is administered by the Chinese Ministry of Health, and so its employees gain the “iron rice bowl” guaranteed job security and welfare benefits of public servants – benefits that many feel are undeserved when ordinary Chinese working outside government agencies have little of either welfare benefits or job security. The Meimei Guo incident reignited these concerns, and two investigations into the matter was carried out.

When the Ya’an earthquake struck in April 2013, the total lack of confidence in the Chinese Red Cross became painfully clear. “Right after the quake,” Financial Times columnist Julie Zhu writes, the RCSC said on Weibo, China’s answer to Twitter, that it had sent a team to ‘inspect’ the quake-hit region. Tens of thousands of Chinese microbloggers fired comments back. The message from most of them: ‘Get lost’”. “As an ordinary citizen, I will never donate a penny to the Red Cross Society,” one user of Weibo, the Chinese equivalent of Twitter, wrote, and another added “The RCSC is shameless. The earthquake is terrible enough. We don’t need you to ‘inspect’. Get out of our sight.” By the end of the day, the agency had received only $23,000 worth of donations. Because of its past relationship with the Chinese Red Cross, the One Foundation also took some of the reputational damage from the Guo Meimei incident; its staff had to frantically rush to remove an old Red Cross link from their site when a user stumbled upon it. However, at the same time the foundation is quietly gaining credibility as an alternative, although both organizations are careful to avoid outright competing with each other for individuals’ donations.

Soon after the earthquake struck, the One Foundation also decided to try something new: accept donations in bitcoin. The organization released the address on April 21, and within two days it received over 230 BTC – marking what appears to be the first significant Chinese Bitcoin fundraising drive in history. “Welcome geeks and hackers’ bitcoin donations to the One Foundation,” a representative wrote in a brief reply written in Chinese when asked about the donation address by Bitcoin Magazine. The 230 BTC donated are worth about $30,000 today; when compared with the agency’s total receipts of $2.4 million USD, this means that, within the scope of this particular fundraising drive, Bitcoin was responsible for an entire 1% of China’s largest independent charity’s revenue. The amount was not even from a single donor; the three largest donations were 88, 39 and 25 BTC respectively, but all other donations were 10 BTC or lower. Given that the organization had started accepting Bitcoin quietly, with no news of its Bitcoin acceptance or even the earthquake in the English-speaking Bitcoin media, this leads to an important question: where did the donations come from? There seems to be only one logical answer: a growing, and already quite developed, Bitcoin community in China itself. - Read more here:

Outstanding: Bitcoin - world's fastest growing currency migrates off the internet - video

In Kreuzberg, Berlin, virtual currency Bitcoin has expanded off the internet to become a favoured medium of exchange in real shops and bars. Joerg Platzer, the owner of bar Room 77 is helping to establish what he believes to be the world's first Bitcoin local economy -

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Thursday, April 25, 2013

Bitcoin Dealers Are Running Into Problems In Canada - Biggest Bank Froze accounts

bitcoin news, latest bitcoin news - Bitcoin Dealers Are Running Into Problems In Canada - Biggest Bank Froze accounts
Two Canadian businessmen recently got some bad news from their banks. James Grant, owner of Canadian Bitcoins, got a letter.

Melvin Ng, proprietor of CADBitcoin, got a phone call. Both men run online exchanges where you can purchase Bitcoins for Canadian dollars. And both were informed their businesses' accounts frozen by Canada's largest banks.

"It's a weird situation," Ng told us by phone recently. "We're a normal Canadian business, we're registered with the government, and a Canadian bank can just block it off."

Grant was more blunt: "They just don't like Bitcoins."

As the price of Bitcoin has steadily increased and purchases with the digital currency become more commonplace, large institutions were bound to begin paying more attention to — and cracking down on — places who traffic in the currency.

Royal Bank of Canada, which shut down the accounts, sent us a statement saying they do not comment on client matters. As of this writing we had not heard back from TD Bank, the other bank that shut down or turned away the Bitcoiners.

We've already discussed why Bitcoin is such an extreme gray area for regulators — it's not quite a currency, not quite a commodity, and there's lots of interstate and international commerce involved, both of which in theory must be regulated by federal governments.

But they've only just begun to catch up with its explosion — Bitcoin merchants must now report all large and/or unusual transactions.

Joseph David appears to have successfully navigated the legal minefield of Bitcoin business.

The co-founder of CAVirtex, Canada's largest real-time Bitcoin exchange (like NYSE, or more precisely, Japan's Mt. Gox), David says he too had his company's account shut down in its early days. But by the beginning of 2012, they were back up and running. The site now sees $15 million a day in transactions.

David believes Ng or Grant may not have obtained the proper money service licensing.

But Ng says he did just that.

Even so, he's already moved on. He says the company plans to open what he believes will be the first ever brick-and-mortar Bitcoin stores in Canada. There will be one in Vancouver and one in downtown Toronto, he said.

That seems to be the mindset among Bitcoin professionals — press on at all costs, because Bitcoin is only going to get bigger.

"You have have $150 million worth of Bitcoins being transacted every 24 hours," David said. "It's not a fad." -

Another Fantastic Development: E-commerce site to accept Bitcoins

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Australian shoppers can now buy consumer electronics online using bitcoins, with Sydney-based DigiDeals becoming the first local e-commerce site to accept this form of payment.

Bitcoin is a decentralised digital currency first described in a 2008 paper by developer, Satoshi Nakamoto, who called it an anonymous, peer to peer, electronic payments system.

Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution.

It is accepted in trade by merchants and individuals and is being purported as the first true international currency.

"We believe that bitcoin is the currency of the future and thousands of Australians have already embraced it," said a DigiDeals spokesperson said.

"We want to provide our customers with flexible options to pay making the whole experience simpler and more pleasant for them."

Since they were invented, Bitcoins have been linked to numerous black market websites selling illegal products, namely narcotics.

But the last few years has seen the increasing legitimisation as Bitcoins become more well known in mainstream e-commerce.

According to online currency converter, CoinMill, one Bitcoin is currently worth almost AU$140.00. -

Blissful Bitcoin: Trusted Awesome Currency or Gold for Geeks?

Blissful Bitcoin Trusted Awesome Currency or Gold for Geeks - New Bitcoin World - News about Bitcoin and Free Bitcoins - bitcoin news, latest bitcoin news
At its best, Bitcoin could be a trusted currency which transforms the way money is transacted.

A virtual currency, offering an alternative to the traditional, state-sanctioned financial system with potential to disrupt age-old established markets. At its worst, Bitcoin is nothing more than gold for geeks; an incomprehensible digital commodity – used mainly for buying drugs and laundering money online.

The four-year-old currency has hit the news in recent weeks as prices surged from $20 in February to a staggering $266 this month, before plummeting and losing $160 in value in a single day. Many have pointed to this volatility as a reason for the currency to be avoided, veteran UBS stockbroker Art Cashin for instance has compared the Bitcoin craze to the tulip mania that led many to financial ruin in the 17th century.

Part of the problem is confusion in terms. Bitcoin has more in common with gold (limited supply) than traditional currencies (theoretically infinite in number). To start with, there's nothing to keep Bitcoin liquid. Coins are mined via an arduous and largely unprofitable process of unlocking blocks of data that “produce a particular pattern when the Bitcoin ‘hash’ algorithm is applied to the data”.

This doesn’t do much to eradicate the ‘gold for geeks’ label, but according to, some miners are generating as much as $470,000 in Bitcoin revenue per day. However the difficulty with the ecosystem is that it inevitably leads to hoarding, and with no Bank of Bitcoin to release extra liquidity when this happens, price fluctuations and market volatility are inevitable.

Part of the problem is confusion in terms. Bitcoin has more in common with gold (limited supply) than traditional currencies (theoretically infinite in number). To start with, there's nothing to keep Bitcoin liquid. Coins are mined via an arduous and largely unprofitable process of unlocking blocks of data that “produce a particular pattern when the Bitcoin ‘hash’ algorithm is applied to the data”.

This doesn’t do much to eradicate the ‘gold for geeks’ label, but according to, some miners are generating as much as $470,000 in Bitcoin revenue per day. However the difficulty with the ecosystem is that it inevitably leads to hoarding, and with no Bank of Bitcoin to release extra liquidity when this happens, price fluctuations and market volatility are inevitable.

What Bitcoin’s inventors have done is conjure "value" from thin air, as if someone announced "right, over here we have the Emperor's clothes, and you can buy them". Indeed, the very notion that money representing real value that can buy real things in the real world has been used to purchase 100 tons of an invisible commodity is alarming. And by extension of this, there is no control over who else might invent a similar "currency".

There's no constraint on global virtual money supply even if Bitcoin limit their own. Why would I hold Bitcoin when Hitcoin looks like a sure bet next week? It's like betting on flies racing up a wall. At least real currencies have a semblance of connection with real economies doing well or badly. - Read more here:

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Launching Soon: Bitcorati A Who’s Who of Bitcoin Directory!

Launching Soon Bitcorati A Who’s Who of Bitcoin Directory | New Bitcoin World - News about Bitcoin and Free Bitcoins | bitcoin news, latest bitcoin news
Coming Soon! The ultimate bitcoin directory and ranking platform for influencers and businesses in the bitcoin economy!

Are you a bitcoin expert or business? You’ll want to be in this directory! Listings will be free!

Bitcorati – The Who’s Who of Bitcoin – Directory of Influential People & Businesses Using Bitcoin. Like Technorati, Bitcorati collects information ranks people and businesses involve in the emerging bitcoin economy!, the Who’s Who in Bitcoin directory serving everyone involved with Bitcoins and the Bitcoin Economy. Bitcorati collects information and stories on top Bitcoin bloggers, influencers, businesses, and facilitators. Technorati, was coined using the words “technology” and “literati”, representing technological intelligence and remains a useful directory for technology blogs and the tech world. (not affiliated with Technorat.comi) is similar, but focuses on the world of Bitcoins!

List your business or blog today for free! Featured listings and advertising space can be purchased using BTC or USD. Have a great story to share about Bitcoins, please contact us for guest blogging opportunities on! -

Incredibly Unexpected PayPal’s President is “Fascinated” by Bitcoin

Really interesting video interview here by Bloomberg News with PayPal’s President David Marcus. When asked about Bitcoin, Marcus states that he is “spending a lot of time looking at it” and calls it “truly fascinating.” Interesting, because 95% of Twitter and mainstream financial “journalists” are entirely convinced it is a bubble and a scam. Oh, and it’s back to 166 a coin.

Watch the interview here. The discussion about Bitcoin comes in at around the 2:50 minute mark.

Tuesday, April 23, 2013

This is Huge: Gold 2.0 - Can code and competition build a better Bitcoin?

Zerocoin and Ripple present two ways to improve the ailing crypto-currency

Absolutely Fantastic - 3 Reasons why Gold is like Bitcoin | New Bitcoin World - News about Bitcoin and Free Bitcoins | bitcoin news, latest bitcoin newsBitcoin has had a wild ride these past few months. The stateless digital currency’s price has soared to new heights only to plunge back down to earth at less than half its previous value. As the price of gold takes a nose dive of its own, some serious economists have risen to Bitcoin’s defense as true believers urge traders to hang on. Others argue the electronic money scheme is either a dangerous fad, a form of Dadaist art, or more simply, not money at all. But even as the debate rages on, one thing that's fostering hope for Bitcoin as a stable store of value is the fact that, unlike a gold bar or a dollar bill, new code and alternative currencies being built alongside Bitcoin might help change it for the better.

Since Bitcoin is open source, many of these solutions potentially lie within its own thriving developer community. Take for example Bitcoin’s most advertised feature, its supposed anonymity. Everyone from the mainstream media to Wikileaks to the now-disbanded hacker collective LulzSec has trumpeted Bitcoin as "anonymous." But the truth is that researchers have long since proven it's anything but — since every bitcoin transaction appears on a public ledger distributed to everyone in the network (called the "block chain"), tracking bitcoins back to individuals is often trivial.

Zerocoin promises true anonymity by giving Bitcoin its own built-in money laundering system

One team of researchers is saying they might be able to fix that. Developed by cryptographers at Johns Hopkins University, Zerocoin is being proposed as a kind of "plugin" for Bitcoin clients that promises true anonymity by essentially giving the Bitcoin network its own built-in money laundering system. Bitcoin laundries normally work by taking your coins and mixing them up with other peoples’ in a big pool. But being as how they're controlled by third parties, using a laundry means trusting your bitcoins with often-shady intermediaries like Silk Road, the notorious darknet bazaar where you can find everything from black tar heroin to contract killers.

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That's not true with Zerocoin, since the laundry would be built into the Bitcoin network itself by standardizing code across client software. If adopted, the new functionality would allow you to add a transaction to Bitcoin's block chain that turns a bitcoin into a zerocoin — a “flipped” bitcoin, if you will. Then, when you redeem (“spend”) your zerocoins, your client scans the block chain and returns a totally different set of coins, making it impossible to determine who they really came from.

The special sauce is a zero-knowledge proof, a statement used to verify a piece of secret information without giving away the secret in the process. This makes it so that if someone looks at the block chain, they’ll be able to see that you minted a zerocoin at some point, but there will be no way to tell which one you're redeeming.

It's a promising solution that tackles a crucial missing piece in the narrative of bitcoins as "crypto-anarchist cash." But still unaddressed is the even bigger problem of liquidity — the fact that buying and trading bitcoins in the first place is still such a huge pain. It’s for this reason that some economists believe the future of Bitcoin is not an upgrade to the currency itself, but a new generation of digital currencies that take the best of Bitcoin while avoiding its weaknesses.

To that end, consider Ripple, another digital money scheme with its own transaction network and a shared public ledger very similar to Bitcoin's. Although Ripple uses its own currency (known as Ripples or XRP), the people behind it — including Jed McCaleb, creator of the P2P software eDonkey2000 and Bitcoin exchange Mt. Gox — are nonetheless directly appealing to Bitcoin users. - Read more here:

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Marvelous video: The 404 – Ep. 1254: Where can you spare a Bitcoin?

Bitcoin segment starts at 14:10

The 404 – Ep. 1254: Where can you spare a Bitcoin?

Fabulously Extreme: Bitcoin gains Currency in the Digital World! Next Gold backed Currency?

Fabulously Extreme Bitcoin gains Currency in the Digital World Next Gold backed Currency | New Bitcoin World - News about Bitcoin and Free Bitcoins | bitcoin news, latest bitcoin news
Bitcoin, the anti-authoritarian crypto-currency, is still far from reaching mainstream acceptance, but is slowly attracting merchants and payment providers that may help validate it as a medium of exchange, especially when it comes to mobile payments.

So would a bank with a thirst for innovation ever move the virtual currency dial towards the mainstream by accepting it from customers?

At the end of the day, the conceptually difficult thing about Bitcoin is 'who is that?'

Today, the closest any Australian bank gets to the three-year-old decentralised currency is wiring a deposit holder's real currency to and from the account of a Bitcoin exchange, such as Tokyo-based Mt Gox.

Bitcoin is already challenging to convert and spend, and its unstable price during its ''breakthrough moment'' earlier this month made it an even more impractical currency for the handful of places that do accept it.

Bitcoin's rise to more than $260 and cyber attacks on Mt Gox designed to cause panic selling did little to generate confidence in Bitcoin as a true currency

However, the drama that accompanied the bubble - Bitcoin's second since 2011 - did offer many non-geeks a first glimpse at the experimental currency. It boldly has two aims: to enable direct online payments unmediated by financial institutions, and provide a means to protect the digital currency's integrity without a trusted third party, such as a central bank.

Satoshi Nakamoto, Bitcoin's attributed creator, described the electronic cash system in 2008 as "fully peer-to-peer, with no trusted third party".

Despite Bitcoin's bubbles, bursts and dire predictions for its future, the currency is showing signs of maturing by way of associated services such as BitPay, which offers merchants a fee-based "Click to Pay" processing service with some protection against its volatility. There are a clutch of Australian merchants that also accept Bitcoins, such as Patchd and honestbeef.

Berlin-headquartered start-up 9flats, an online service for short-term accommodation seekers, began accepting Bitcoin at the height of the latest bubble and uses BitPay to lock in the exchange rate at the time of transaction.

Despite these signs of growing acceptance, Bitcoin still lacks the trust consumers have in other payment services and, in turn, transaction volumes that might attract financial industry support. Trust may be its biggest issue, says Chris Hamilton, chief executive of the Australian Payments and Clearing Association, the bank and credit union-owned company that clears payments between Australian financial institutions. Read more:

Absolutely Fantastic: 3 Reasons why Gold is like Bitcoin

Absolutely Fantastic - 3 Reasons why Gold is like Bitcoin | New Bitcoin World - News about Bitcoin and Free Bitcoins | bitcoin news, latest bitcoin news
The power of fear is amazing to me.

For the most part, otherwise sane individuals will do all sorts of crazy things once things become a little bit dicey.

Want proof? Look no further than the gold market. How else can you explain the massive move in an otherwise worthless metal over the last decade? And then there's Bitcoin, the digital currency. I'll get to that in a second.

If you are honest, ask yourself what real utility is there for gold? Don't recite what the so-called analysts or experts tell you about gold being the only real currency in the world (it is not). Those folks will tell you that gold is the only thing that will protect you and your family when things go horribly wrong (fear mongering). 
Really, what do you think the world is going to be like if things do really go horribly wrong? I highly doubt that gold bar will get you much if chaos truly takes hold.

Presses printing money
How about inflation?

Those who love gold spew all sorts of nonsense about inflation -- again, all of it is fear-based.

The global powers are printing money across the globe. All that money is going to make paper currency worthless. Prices across the board are going to rise in an unrelenting, unstoppable wave of inflation.

Oh, really?

If there is so much cash out there. Where in the world is it? I know I don't have it, do you?

For inflation to truly take hold there needs to be cash dispersed to the masses. That isn't happening. Not even close.

I'm sorry, but aside from being used in jewelry, gold does not have the utility the market is telling you today, even with the recent selling.

Sure there has been a ton of money made owning gold over the last decade, but that has little to do with true value of gold in a market. What it does tell you is that there is a ton of fear out there and that fear can create a massive bubble in any investment.

The hot new currency
Take for example, hmmm . . . let me see . . . Bitcoin.

You know about Bitcoin, that supposedly hot new digital currency that everyone must have. Come on. Admit it, gold owners. You gave serious consideration to adding some Bitcoin to your portfolio or maybe you actually pulled the trigger and bought some before it collapsed. - Read more here:

17 Incredible Ways How to explain Bitcoin to your grandmother

As anyone who doesn't have a degree in advanced computer science knows, Bitcoin is conceptually tricky. Thus, when your grandmother is wanting to buy marijuana off the Silk Road and begins asking you to explain Bitcoin to her, what do you do? Ever since early 2012, when I asked the question 'what the hell is Bitcoin?', I've been trying to find ways to explain it to myself. Initially I used the example of the Borg from Star Trek, but more recently I've come to believe that one key to describing it is to start from normal currency, and to then describe Bitcoin in relation to that, rather than trying to describe it as a standalone phenomenon. I'm no Bitcoin expert, so this is still a work-in-progress (Warning!), but next time granny asks you, here's a rough-and-ready way you might lay down the foundations (I've deliberately included a lot of repetition, because that's important when learning). 
17 Ways How to explain Bitcoin to your grandmother | New Bitcoin World - News about Bitcoin and Free Bitcoins

1) Start from physical cash
We all have a basic understanding of physical bank notes. We know that we can store a banknote in our wallet, and then exchange it directly with someone else for goods or services. We can do this because we collectively believe the note to have value, anchored as it is within an immensely powerful cultural system which gives it such value, and further reinforced by our belief in the central banks that issue it, and the governments that accept it for tax.

2) Now contrast physical cash with electronic bank money
Most of our transactions though, are with electronic money. That's the money you see when you log into your online banking account, and that you can use to make electronic payments (if you granny doesn't do internet banking, talk about the numbers on the ATM screen). Where is that electronic money stored? It's not like I have a wallet that has electronic cash in it that I can take out and give to someone. All our electronic money is actually stored in the IT systems of commercial banks.

3) Point out that electronic money is just a number in a bank's computer, attached to your account ID

To 'store' your electronic money, all the bank really does is maintain an internal ledger, which is a list that says "Brett has deposited X amount into the bank, and he has received X amount in payments, and he has withdrawn X amount from ATMs, and has paid X amount to other people via electronic payments, and this is how much he has left." And that's the amount you see on your bank statement. Your current bank balance is thus the product of a series of transactions over time that the bank validates and records.

4) Then point out that I cannot hold this electronic money in my own computer
If I had to call Co-Operative Bank up and say, "I have £350 in my account with you. It's currently in electronic form. I'd like to take it out of the bank. Please can you transfer it to me in electronic form, so that I can store it directly on my computer", they'd laugh at me. They'd just say "Sorry Mr. Scott, it's just numbers recorded next to your account ID. We can convert it into cash and give that to you if you come into a branch, but we cannot give it to you in electronic form, unless you could specify another bank where you have another account." - Read more here: