This is how Bitcoin works

Neha Narula, director of the MIT Digital Currency Initiative, helps PBS NewsHour understand how Bitcoin and cryptocurrencies work. Watch the video below or read the transcript interview with Neha, "This is how Bitcoin works."

Bitcoin’s price has soared over the past year, placing it at the center of the debate over the future of cryptocurrency. But while Bitcoin was released nearly a decade ago, many consumers still don’t know much about how it works. PBS NewsHour Economics Correspondent Paul Solman recently spoke with Neha Narula, the director of MIT Media Lab’s Digital Currency Initiative, to find out more about cryptocurrency. Their conversation has been edited for length and clarity. Watch the full Making Sen$e segment on cryptocurrency on Thursday’s NewsHour program.
The basic idea of Bitcoin is simple: Instead of a financial institution holding a bank ledger, a chain of computers linked through the internet are all using the same software to record and verify every transaction. But how can a cryptocurrency be worth anything in the first place?