What is a bitcoin and where can you trade it?

The bitcoin (BTC, or XBT) is a cryptocurrency or digital currency that has increased in value more than 25,000 times since its inception in 2009 (it started at 0.04 USD). It is called a cryptocurrency because it uses cryptographic algorithms to manage the creation and transfer of money. It's the first peer-to-peer payment network powered by its users with no central authority (government central banks) or middlemen (PayPal, Skrill, WesternUnion, banks, etc.). It works almost as cash with a few advantages over it.

• Bitcoins can be transferred from any place in the world to any other place in the world in 10 minutes. There is no bank in the middle which would take a lot more time to make the transfer and charge exorbitant fees. Also nobody can freeze neither the transfer nor your account.

• Bitcoin allows you to send and receive payments at very low cost. Except for special cases like very small payments, there is no enforced fee.

• With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate you. However, it is not entirely anonymous as cash is.

• The Bitcoin network is always up and running, even on holidays!

• Bitcoins are not just in the realm of computer geeks and nerds. There's more and more businesses around the world starting to accept bitcoins. In January 2014, Wall St. may finally be warming up to bitcoins as large amounts of investor money is pouring into a new fund called Bitcoin Investment Trust. It's for folks who don't really want to buy and sell bitcoins themselves. However, in order to invest in it you must an accredited investor with a minimum deposit of $25,000.

• But, most importantly for you forex traders, there's a lot of hype about bitcoins and other digital currencies (like litecoins, peercoins, feathercoins etc.), the market is very volatile, which means there's a lot of pips up for grabs. The price of a bitcoin even crossed that of gold recently. There are a couple fx brokers who started allowing trading bitcoins on margin. Plus500 is one of them (leverage 1:3). The other one is AvaTrade which offers a more generous leverage of 1:10.