.05 Bitcoin Digital Currency?

Bitcoins are all "all digital" currency that are minted using computers. There is a wealth of information at http://bitcoin.org/

Rather than a physical coin, a bitcoin is basically a file containing a big chunk of binary information that can be verified by a farm of computers. The concept is that it works like real currency but in digital form.

Recently, the bitcoin market has experienced a very severe crash with the coins losing more than half their value. It was very similar to Gold at first in that it seemed to run higher without limit but, in hindsight, it appears the first wave of bitcoin appreciation was just a classic bubble.

Since bitcoins are not backed by any institution or government, an argument can be made they have no intrinsic value whatsoever. To make matters worse, there are no constraints on the ability of anyone else to come up with a similar concept and "mint" their own bitcoins. Hence, in the future there may be tens, hundreds, or thousands of "private mints" spitting out different - but technologically similar - coins. Not good for long term appreciation.

The above statements are exactly what the US government want. They DON'T want people using these as not only are they hard to track, they can be used to skirt tax laws.

I wonder how many millions of real, tax payer dollars the US is wasting to snuff out this small but free bitcoin market?

I think he's selling gold and other items in exchange for bitcoin. Anyway, when you're dealing with online transaction, always take extra precaution to ensure that you're transacting with real people and not scammers.