Bitcoin has become a household name with increasing coverage from the media, and honest to state its notoriety continues to increase. So what is all of the fuss about? Bitcoin appeared around 2009 as a new sort of digital money and was develop in the off as open-source by a smart chap named Satoshi Nakamoto. We are told his true name is ‘shrouded in mystery’ like he’s some sort of Marvel superhero, so I suspect this simply means he’s a super nerd, but there is no question, he’s certainly a pioneer…
So what is it all about?
Bitcoin is a sort of money the same as any other, but it isn’t under the control of any government or bank. The premise is for this to be owned and managed by its own neighborhood. Bitcoin is de-centralised and handled by peer members who partake in the new transaction activity and store previous activity in what are called ‘block chains’. This usually means that a complete ‘copy’ of trades are saved locally and used to verify, between participants, new action, thereby preventing any 1 individual from malforming, including or creating fake transactions within the block series. This ‘consensus’ strategy protects the security of bitcoin doubler trades.
Bitcoin functions in not a similar way to PayPal because you have a virtual wallet with a unique address where people can send you Bitcoins. You may just put in a wallet on your own device, or you could download the full Bitcoin wallet and participate in the system as a node.
Bitcoin’s value is very much an effect of demand and supply with risky investors gambling on the highs. Currently one Bitcoin (revealed as 1.0000000) is worth #573 or $935. You can purchase Bitcoins at any of the 8 decimal places so for example 0.0100000 would cost you #5.70 and 0.1000000 would cost you #57.00, no surprise at which Bitcoin got its name!
OK, where do I buy Bitcoins?
If you don’t have some Bitcoins coming your way using a payment, then you’ll have to buy Bitcoins in your existing currency. Purchasing is about trust since it’s not controlled, however that’s kind of how eBay started out, where consumers reliable each other to pay for and send things, and they’ve done rather well for themselves…
The Bitcoin coalface
Bitcoin mining, as it is known, is the process of generating (and securing) Bitcoins plus a small payment from the form of units of Bitcoins are compensated for the time and effort your hardware is utilized and your level of participation. This is accomplished by means of numerous methods from using your PC’s CPU or GPU (not comparable to additional grid established BOINC projects like Seti @ Home) to utilizing ASIC miners (Application Specific Integrated Circuits), these are designed for the singular purpose for which they are constructed, which in this case is creating Bitcoins. Unless you have significant investment to purchase strong ASIC miners such as the ones from butterflylabs.com that may run at 600GH/s (Hash’s per second) you are going to have to have a look at USB ASIC Miners such as the popular BlockErupter which make 336MH/s. Employing the BlockErupters that you can produce your very own USB hub mode rig running plenty of these concurrently.
The simple fact though, is that it could be too late in the game to make any significant money out of Bitcoin mining. The sophistication (Hash speed) of this Block Chain is now such that joining and contributing to a Mining Pool, in which miners work together and share the gains, will probably find more invested in power than in any real financial return. Also there is a maximum limit of 21 million Bitcoins and at present it is nearing 12.4 million and as more miners join, the quicker this limitation will be attained. It’s currently more likely you will make money buying Bitcoins themselves than creating them.
The near future of Bitcoin.
Bitcoin is an emerging technologies, as such the cost has been volatile, however recently it’s started to become more stable as the community of users grows. As of the writing, Bitcoin is visiting the number of transactions reach as large as 100,000 per day. While banks and large business are yet to contemplate if Bitcoin is a danger or an opportunity, there’s not any doubt they’re starting to sit up and take notice of this new electronic currency which continues to grow its consumer base each day.