TECHNOLOGY

Video Explains Bitcoin In Less Than 4 Minutes

12/04/2013 5:08 AM AEST | Updated 12/04/2013 6:11 AM AEST

The digital currency Bitcoin might seem like a baffling trend. But tech geek Mark Fennell and cartoonist Duncan Elms are here to help.

Fennell and Elms took time between their day jobs to make "Bitcoin Explained," a video explanation of the digital currency. The video launched on April 7, a day before the value of all Bitcoins reached more than $2 billion and two days before the price of one Bitcoin reached $200.

To summarize the video, Bitcoin is a digital currency that's not backed by any government. Instead, it's engineered to operate like a commodity currency. The units are "mined" by computers with spare processing power, and 50 Bitcoins are mined approximately every 10 minutes, thus lending a measure of artificial stability to the currency. Only 21 million Bitcoins will ever exist, according to the currency's pseudo-anonymous developer, yet only about half of those have been mined thus far.

Though we take issue with the video seemingly equating the Dark Web (the parts of the Internet that can only be accessed anonymously) with the Silk Road (a marketplace that exists on the Dark Web), it does a decent job of explaining the digital currency that's been making waves in recent weeks. The untraceable coin has been gaining traction in Cyprus, as the bailout there makes people question the security of the banking system. It's even supposedly left a few lucky millionaires in its wake.

Not bad for something once considered the currency of "nerds, conspiracy theorists and shady Internet characters."

More On This Topic