What is Bitcoin?

CLEVELAND, OH (WOIO) - Bitcoin is making headlines again because for the first time a global market is trading futures for the virtual currency.

On Sunday night the Chicago Board Options Exchange started tracking the trading of futures, meaning what something might be worth in the future. They are not trading actual Bitcoins.

Bitcoin is was created in 2009 as a virtual currency, also called a cryptocurrency.

It is traded peer-to-peer online which means there is no central bank or government agency regulating Bitcoin. Which also means no middlemen are charging fees for things likes from person to person.

The value of each Bitcoin fluctuates throughout the day, like a stock on the market would. Currently one coin is valued at about $17,000.

Who created Bitcoin?

No one know has been able to identify the actual person who created Bitcoin because he, or she, has never come forward.

That person has only existed online using the registered name Satoshi Nakamoto.

Nakamoto, if that is a real name, created the software users downloaded to be able to trade Bitcoins and track them.

There is no actual coin by the way. It's all just digital shares.

There are more and more companies, who are mainly digital based that are accepting Bitcoin as payment. At this point mainly travel and shopping sites.

How is Bitcoin tracked?

Its estimated that 9,500 computers around the world track all the Bitcoins out there. That's one of the reasons its fairly secure without one central bank regulating it.

A tech savvy person can't just create their own Bitcoins because it wouldn't show up on the other 9,499 computers tracking all the real coins.

Making it impossible to shut down in s the fact that those 9,500 computers are all over the world. If the United States suddenly tried to track, shutdown, or charge a tax on Bitcoin, the computers in other countries would simply take over the process.

Can you buy Bitcoins?

Every ten minutes new Bitcoins are awarded through a process called "mining."

"Miners" are people who run those 9,500 computers. If they have some of the fastest, or come up with a new algorithm to make something faster, they can be awarded a fraction of a Bitcoin.

So far there are 16 million Bitcoins floating around out in the virtual world, but there will be a cap of 21 million to be released. The cap isn't expected to be reached until about the year 2140.

In some cities you're starting to see ATM style machine popping up. You can put in cash, or a credit card, and buy a fraction of a Bitcoin.

This kind of goes against everything Bitcoin started as. Now you're getting people who are handing over cash for what was a virtual currency.

Lots of warnings out there:

There are almost as many money managers warning people about Bitcoin, as there are Bitcoins out there.

With no regulation, no one central government overseeing the process, and no one to answer for anything if the bubble bursts it may all be worthless.

In a CBS article this week looking at the futures trading, Thomas Peterffy, chairman of the broker-dealer Interactive Brokers Group, expressed deep concerns about the trading of bitcoin futures last month, saying "there is no fundamental basis for valuation of Bitcoin and other cryptocurrencies, and they may assume any price from one day to the next."

Follow Dan DeRoos on Facebook and Twitter. Have a question you want him to answer? Email him at dderoos@woio.com.

Copyright 2017 WOIO. All rights reserved.