A home in Canada is currently listed for sale at $405,000. The listing has a unique solicitation in it. The seller will accept offers to purchase for cash, new financing or by trading in bitcoins.

When asked about the bitcoins the seller stated, "I really wanted to get my hands on some bitcoins and they happen to be quite hard to get if you want to get a large number of them." This made us wonder. What on earth is a bitcoin and how does it work? So we went to work researching bitcoins and here is what we discovered.

Bitcoins are virtual currency. They are not exchanged through a bank or any government agency. They are exchanged online. They are protected by cryptography which is the science of writing in secret code necessary when communicating over any untrusted medium, which includes just about any network, particularly the Internet.

Cryptography is an indispensable tool for protecting information in computer systems. Since the transfer of bitcoins is done between the payer and payee, the payment is irreversible. There is no middle man such as a bank or agency which oversees the transfer. The only way to recover the transfer is if the recipient refunds the bitcoins.

Bitcoins are still considered an experimental new currency. It does become less experimental as usage grows, but keep in mind bitcoins are a new invention exploring ideas never before attempted — which mean its future cannot be predicted and the price can be volatile.

The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature and sometimes illiquid markets. At the time of this article one bitcoin is equal to $114.50 U.S. Dollars.

It will be interesting to see if the seller of the Canada home succeeds in being the first to sell for bitcoins. Who knows, maybe it is a sign of things to come. If you receive a transaction where a portion or the entire purchase price is being paid with bitcoins be sure the principals understand you cannot receive or hold the payment. The transfer will have to occur outside of escrow and you might show an offsetting debit and credit on the closing statement.

Be sure to point out the payment of your fees and other items such as the payment of the property taxes will have to be done in U.S. Dollars. The principals will have to provide you with confirmation the transfer has occurred and instructions as to when the documents can be recorded and balance of the funds can be disbursed.