Digital currency Bitcoin hits new high before losing S$200 in value in one day

[CityFarmer]

This is the only currency in the world that has no physical form and yet does not pass through any banking system nor controlled by any government. It is like ditigal gold with inbuilt mechanism to control its growth rate. Transactions that does not wish to be tracked by the banking system nor govt love this medium of exchange. You can use it to buy real goods and services, some website only accept payment in bitcoins, e.g. those selling drugs. Such alternative currencies are a natural development in a world where govt prints so freely.

Not sure how it work? Is the bitcoin backed by anything?

Base on the news report:

"There are around 11 million Bitcoins in circulation, 25 new bitcoins are produced every 10 minutes, and they are traded through online exchanges like Mt.Gox."