re: Bit coins... I want the general definition

quote:

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The simplest analogy to bitcoin, although dumbed down and technically incorrect, is that it's an investment like a stock.

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I disagree. A Bitcoin is the solution to a discrete mathematical equation assigned a specific identifier, think of it as a file name. Ownership of each Bitcoin is tracked via the specific identifier. So Bitcoins are in essence information. Information does not have trade value unless it is exclusive. (Kind of ironic that Wiki opposes intellectual property, but he touts the value of the exclusive knowledge of certain information.)
Exclusivity of the information is maintained using high level encryption. The owner of the Bitcoin is the person who has the key to open the file containing the solution to the equation.

The value of a Bitcoin is determined solely by how much a buyer is willing to pay for it. So the value comes from someone else being willing to purchase the Bitcoin for equal or greater price at some point in the future. That is unlike a share of stock since the price a buyer will pay for the share is dependent on the historic operating results of the company, the expected future operating results and the ability to pay dividends.