And many of them have made matters worse by using photos of "bitcoins," when in fact bitcoins have no physical existence. They exist only as digital code on the Internet.
Just one year ago very few people had even heard of Bitcoin, even though it was created in 2009. But last year's sudden spike in the value of Bitcoin, from less than $20 in January to (briefly) $266, caught the attention of the mainstream media.
The truth is, Bitcoin is a major development and will only grow in importance.
Here's an overview of what Bitcoin is and why it matters…
What Is Bitcoin? Something Totally New
At its most basic, Bitcoin is a digital form of money, much as e-mail is a digital form of paper mail. It's also a method of payment, which as we'll see is key to what makes Bitcoin so special.
Bitcoin is a form of money built on the foundation of the Internet itself. It uses the global network both to create the bitcoins themselves as well as to record and verify every transaction.
And the Internet is the means by which bitcoins are transferred from one person to another, which means transactions can easily cross international borders.
Bitcoin is not controlled by any person, group, company, or government. Instead, the system is managed by a software algorithm – essentially an extremely sophisticated computer program.
That's why Bitcoin has attracted so much interest. Because it is decentralized, no one can manipulate it, as central banks manipulate fiat currencies.
And because the bitcoins can be transferred directly from one entity to another (say, a customer and a retailer), there are virtually no fees such as those charged by banks for the use of credit cards.
The software algorithm also controls how quickly bitcoins are created and has safeguards built in to prevent anyone else creating them, or executing fraudulent transactions.
Now let's take a closer look at how bitcoin works.