It hasn’t moved in next door, but it’s checking out the neighbourhood: online currency Bitcoin has arrived on the property market scene.

In Melbourne, buyer’s agent Paul Osborne has started accepting payments in the currency.

Bitcoins are becoming a common payment method on cyber black markets, according to security firm Webroot.
Webroot researcher Dancho Danchev has reported uncovering a cyber black market accepting Bitcoins as payment for a keylogger.

Through a partnership with Bitcoin payment processor BitPay Inc., Gyft now accepts bitcoins for its mobile gift card product. This extends the virtual currency's reach to more than 50,000 retail locations.

"The biggest issue with Bitcoin to date is: Where do you spend these bitcoins?" says Vinny Lingham, CEO of Gyft.

With its approximately 200 retailer relationships, including Burger King, Lowes, American Eagle and Nike, Gyft gives Bitcoin users more options. Gyft supports Bitcoin purchases only on the Android platform.

I suppose some people would argue that you could effectively set the price in U.S. dollars, and then just use bitcoin for transactions at whatever the market rate is at that time.
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In this case, you would just be using bitcoin as a payment device, while actually doing business on a dollar basis.

Take a flick through these easy to digest slides about Bitcoin and decide for yourself whether the virtual financial market is a game you’d like to get playing.

Bitcoin has a combination of attributes, like gold’s un-debaseable store of value, the euro’s cross-border acceptance and any modern currency’s electronic transmissibility that give it a unique and powerful utility.

That’s why I’m confident Bitcoin’s many flaws will be ironed out. As with a great piece of open-source software, too many people stand to benefit for it not to happen.

The CFTC regulates derivatives contracts and, under Dodd-Frank financial reform, has sweeping authority to oversee retail foreign exchange dealers.
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One person familiar with the discussions said Bitcoin would not become subject to CFTC jurisdiction unless it becomes the basis for a derivatives contract. The use of Bitcoin to pay for ordinary goods is outside the commission’s bailiwick.
Leveraged Bitcoin transactions that settled in more than two days – so-called “rolling spot” transactions – would also fall under CFTC jurisdiction, the person said.

Backstory
In 2008 an anonymous person or group of people going by the name Satoshi Nakamoto wrote a paper describing the design of a digital currency called Bitcoin. On In January 3rd, 2009, Satoshi Nakamoto released the first Bitcoin client which used the new protocol described in the white paper, and very soon, people started running the software on their computer and buying and selling things using Bitcointhe first real-world transaction occurred (the famous million dollar Pizza).
Bitcoin facts
If you’ve heard about Bitcoin you’ll probably already know that the price of Bitcoins has been increasing quickly over the last year or so rapidly, and that it’sis volatile.
 
You’ll probably know that Bitcoin is a peer-to-peer system so itthat doesn't require any trust to be placed in a central authority. There are no servers to hack, no databases containing sensitive information that can be leaked. And there’s no one in control who governments and other powerful parties can strong-arm to get their way.
You might have understood that you don’t need anyone’s No permissionis required to start using Bitcoin, there are no forms to fill in. Anyone with a computer, an internet connection, and some free software, anywhere in the world can start accepting (and then sending)use Bitcoins.
One other well known fact is that the maximum number of Bitcoins that can ever exist is slightly lessHard-wired into the software are rules ensuring there can never be more than 21 Million Bitcoins. The rate that new coins are created is known in advance. This means that unlike fiat currencies issued by governments, no one has the ability to deliberately inflate the supply of, confiscate, or block Bitcoins payments.
The meaning of Bitcoin
The word Bitcoin refers to twodifferent things.The currency (unit of account) and the payment system that enables transactions.
A Bitcoin is a unit of account, analogous to a Euro or a Dollar. There will never be more than 21 million Bitcoins in the world, and each Bitcoin is divisible into a hundred million atomic units, called Satoshis.
Note that the software will happily send a small fraction of a bitcoin to any recipient, so an economy "running out" is never an issue with bitcoin.
Bitcoin is also used to refer to a public protocol.When refering to Tthe protocol. It can be thought of as a set of rules for how pieces of software--known as Bitcoin clients--must communicate with each other. A bitcoin client allows a person to send and receive Bitcoins. The clients work by sending messages to one another. If the messages passed between clients stick to the rules of the protocol, they’re forwarded on, spreading throughout the network.
Collectively we’ll call all these things the Bitcoin system. We’re going to look at the fundamental ideas behind how the Bitcoin system works.
Transactions and addresses
Bitcoins, and satoshis, are not reallyPhysical coins of course, but they’re not files on a computer either. They’re really numbers in a ledger. The bitcoin system uses a public ledger called the blockchain. The blockchain This contains a record of every Bitcoin transaction that has ever happened. The system operates similar to a Land Registry that determines who owns which piece of real-estate.
You can think of a transaction in the blockchain as a record that a certain amount of Bitcoins were sent from one Bitcoin address to another.
A Bitcoin address looks like this: 1K3p8wnV6bjGEk3ShyKxeiMBrCTTRQA4YE      (Don't worry, all common bitcoin software checks for typos!)
One person can have access to many Bitcoin addresses. In fact it's common to use a new address for each payment, it's free and helps maintain privacy. To make a Bitcoin payment to someone, you need to know an address of theirs.
At any moment, yYour Bitcoin balance is the combined total of all the Bitcoins assigned to addresses under your control. Bitcoin clients typically download the blockchain and scan the transaction history for you to figure out what your current Bitcoin balance is by checking the flow of funds into (and out of) all the addresses under your control. When a user sends Bitcoins to an address, behind the scenes his client creates a transaction , adds a digital signature and broadcasts it to the rest of the network for verification.
Sending money
So what stops a person from maliciously creating and broadcasting a transaction that sends Bitcoins from someone elses address, to one of his own?
Bitcoin addresses are designed to be public
We know that each Bitcoin user has many addresses. What this really means is that the user has the power to re-assign the funds at those addresses to any other valid Bitcoin address, in other words, they have the power to spend theose funds stored at those addresses.
Bitcoin addresses are designed to be public. People share them with others to request payment. Addresses might be publishedAccepting bitcoin payments is as simple as publishing an address on forums, on websites, or on printed material. Scanable barcodes (often on a phone screen) can help save typing too. Knowing a bitcoin address is enough information to send funds to it, but it’s not enough information to does not allow sending funds from that address anywhere else.
The reason you can’t send other people’s money to yourselfbehind this is that Bitcoin transactions must be prepared in a special way before they’re sent: they’re cryptographically signed.
Public key cryptography
A Bitcoin address is really a short representation ofs a code known as a public key. Each public key has an unique accompanying code called a private key. Bitcoin addresses (and the public keys they’re derived from) can safely be displayed to the world, but their corresponding private keys need to be kept secret. This is important because knowing a private key allows a person to spend the funds attached to the corresponding Bitcoin address.
By the way: Most of the time Bitcoin users don’t need to worry about this complexity because their Bitcoin clients automatically keep track of their receiving addresses, as well as their public and private keys. Typically a Bitcoin client stores all this information in an important file known as a Bitcoin wallet. This is the file that should be password protected and backed up in case of computer failure

Cheng Hua was one of the first Chinese to trade the currency. In China, Bitcoin lovers like him call themselves “BTCers.”

Li Xiaolai (李笑来), who claims to have the largest collection of Bitcoins in China, describes his obsession saying, “Bitcoin is the most stunning and most subversive social experiment in history.”

WHEN Roger Ver goes out for dinner with his friends they all argue over who pays the bill, but it's not because they're especially generous. They just want to be paid back in BitCoin, an online currency which has almost tripled in value since the beginning of March.

With new regulatory scrutiny, proponents of the virtual currency might find themselves hard-pressed to maintain Bitcoins’ independence from the financial authorities.

But I can’t help but ask, are these latest moves by the American authorities, too little too late?