Bitcoins: What are they, and how do they work?

Bitcoin is one of the first attempts to create a real-world currency with no governments, no central banks, and no rules

It started, and ended, with a click. With one touch of a mouse, a hacker managed to transfer 25,000 credits of online currency – then worth almost $500,000 dollars – to his own account. The transfer is visible on a public register; the original owner has publicised his plight online, but to no avail – the money is gone.

This hack, which happened in June 2011, was the first major online heist for Bitcoins, one of the world’s newest currencies, and the subsequent panic left many casual users reeling.

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