Bitcoin

Some of the virtual currency’s more public uses have been to buy drugs or procure hit men. The Winklevoss twins, having graduated from claiming to have invented Facebook, love the virtual currency so much that as of November they bought up 1 percent of all “BTC” in circulation. It’s spawned a host of other made-up currencies, some a lot loopier (“Dogecoin” and “Coinye West,” anyone?) than others.

And yet: Paying for goods and services is not one of those practices that we humans can claim to have perfected. And it’s not as if we’ve never trafficked in alternative currencies before. Microsoft Points and Facebook Credits didn’t take off, but Amazon gift cards function as an alternative currency, albeit with a fixed 1:1 exchange rate with dollars. Frequent-flyer miles—redeemable not just for air travel but a variety of gifts—represent yet another way besides dollars through which you can pay and be paid.

So set aside the libertarian utopianism around Bitcoin. Why is this “crypto currency”—“mined” by solving complex equations on increasingly specialized computers, with transactions confirmed through peer-to-peer math—good for you, the customer? And why should you be wary?