There's
virtual money, and then there's Bitcoin. The super geeky Bitcoin is a
mathematically-derived currency that promises to change the way people use
money. Bitcoins are not real coins-they're strings of code locked with
military-grade encryption-and people who use them to buy and sell goods and
services are difficult to trace. Along with anonymous drug dealers, Ashton
Kutcher and the Winklevoss twins have reportedly jumped on the bandwagon.
There's something to be said about using currency that isn't regulated by the
government or banks, doesn't come with the usual transaction fees and is
impossible to counterfeit. Bitcoin also promises to be disaster-proof, because
you can't destroy numbers in the same way that you can destroy gold reserves or
paper money.
What is
Bitcoin?
Bitcoin is a
digital currency created in 2009 by a developer hiding under the pseudonym of Satoshi
Nakamoto (supposedly a Japanese guy who has perfect command of American
English). Bitcoin is decentralized, meaning it is not controlled by a central
authority like a financial institution, country, government or individual. It
is peer-to-peer and open-source, distributed across the internet from computer
to computer, without need for middlemen. Compared to U.S. dollars, Bitcoin is
virtually untraceable, making it attractive to libertarians afraid of
government meddling and denizens of the underworld. You can use it to pay for
purchases online and off, from illegal drugs on the Silk Road to legit
restaurant meals.
Where to Get
Bitcoins
You can get
Bitcoins from friends, online giveaways or by buying them with real money from
Bitcoin exchanges. Using real money to buy Bitcoins defeats the whole purpose
of anonymity, however, because you may need to add your bank account to a third
party site. You can also buy Bitcoins using your mobile phone or through cash
deposit establishments. New Bitcoins are created by "mining." Mining
is done automatically by computers or servers-it's not real-world mining where
you have to dig underground to unearth commodities, but the concept is similar.
You have to exert effort to dig up gold, and you (or your machine) also have to
spend time and resources to verify and record Bitcoin transactions.
One of the
coolest things about Bitcoin is that it gets its value not from real-world
items, but from codes. Bitcoins are pulled out of the ether by machines (and
the people who run them) in exchange for solving complex mathematical problems
related to the current number of Bitcoins. These bulky and pricey
supercomputers come with powerful encryption capabilities (and reportedly suck
electricity like nobody's business). In a typical transaction, buyer A from
location X pays seller B some Bitcoins online. Miners then race to authenticate
and encrypt the transaction, logging Bitcoin codes in a central server.
Whomever solves the puzzle first gets the Bitcoins. About 25 new Bitcoins are
created for every 10-minute block, but that number can increase or decrease
depending on how long the network runs.
How to Use
Bitcoins
Once you get
your hands on some Bitcoins, you need to store them in an online wallet through
a computer program or a third-party website. You become part of the Bitcoin
network once you create your virtual wallet. To send Bitcoins to another user
or pay for online purchases, get that person/seller's identification number and
transfer Bitcoins online. Processing takes about a few minutes to an hour, as
Bitcoin miners across the globe verify the transaction.
How to Make
Money on Bitcoins
If you're still skeptical, one Bitcoin is currently
worth about $90 (as of 18 April 2013), with hourly fluctuations that can make a
day trader dizzy. Volatile as it is, more and more people are starting to milk
the phenomenon for all it is worth-while it lasts. How to get your slice of the
virtual gold rush? Some ways: Sell Bitcoin mining computers, sell your Bitcoins
at crazy prices on eBay and speculate on Bitcoin markets. You can also start
mining. Any person can mine Bitcoins, but unless you can afford an efficient
setup, it will take an ordinary PC a year or more to solve algorithms. Most
people join pools of other miners who combine their computing power for faster
code-cracking.Get updated information please visit : http://www.coinopinions.com/
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