This was a blog I originally made back on March 15, 2014 at 5:10 PM.
Well, I was on the interwebs again. I have heard about bitcoin but never really got into it deeply. So I started doing research. The more I got into it the more it got complicated to understand. I did understand some basics. Bitcoin is basically a peer-to-peer payment system and digital currency introduced as open source software in 2009 by developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money. Conventionally, the capitalized word "Bitcoin" refers to the technology and network, whereas lowercase "bitcoin" refers to the currency itself. Bitcoins are created by a process called mining, in which computer network participants, i.e. users who provide their computing power, verify and record payments into a public ledger in exchange for transaction fees and newly minted bitcoins. Users send and receive bitcoins using wallet software on a personal computer, mobile device, or a web application. Bitcoins can be obtained by mining or in exchange for products, services, or other currencies. Bitcoin has been a subject of scrutiny amid concerns that it can be used for illegal activities. In October 2013 the U.S. FBI shut down the Silk Road online black market and seized 144,000 bitcoins worth US$28.5 million at the time. The U.S. is considered Bitcoin-friendly compared to other governments, however. In China new rules restrict bitcoin exchange for local currency. The European Banking Authority has warned that Bitcoin lacks consumer protections. Bitcoins can be stolen and chargebacks are impossible. Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use by speculators, which has fueled price volatility. Bitcoin as a form of payment for products and services has seen growth, however, and merchants have an incentive to accept the currency because transaction fees are lower than the 2–3% typically imposed by credit card processors. So simply put bitcoin is an alternative way of purchasing goods online via online, internet, cloud, etc. other than money. We all know that money is basically cash as in the money we hold in our physical wallets and pockets. Nowadays, a lot has change and money is no longer physical in and of itself but also digital. We now buy stuff online whether it be from Ebay or Amazon or other online stores besides the stores across the street. We then use debit or credit cards to pay for services and goods. Whether you're buying a computer, a video game, comic book, an action figure, exotic food, even some pets like a small lizard, etc. they can be purchased online through digital currency which is basically the money you have in your bank. That currency though is translated into numerical value on a screen and recorded into a database or server of that bank. The stored information is your account and how much money you have. When we make purchases the amount is deducted from the current checking or savings amount. All that can be done digitally nowadays even though we still use physical currency like 20 dollar bills and quarters in our hands. Let's go to bitcoin money. That money is basically like what is stated above a form of currency but 1 bitcoin can be worth from several dollars to hundreds. I guess it can be compared to the stock exchange. The only thing different is that bitcoin can be mined using your computer or a bitcoin mining box that you can purchase and plug in to your outlet for a few hundred dollars. Some people make a few dollars a day depending on how much hash/second their hardware can mine and some make a hundred plus dollars for having a $2,000 rig that can mine maybe 50 Gigahash/second. That's one way to get bitcoin. You have to have your computer or mining hardware on 24/7 and could take several months to make 1 bitcoin depending on how much 1 bitcoin currently is when translated to dollars or other currencies. The amount somehow fluctuates and changes all the time like in the stock market. It's kind of risky but also beneficial at the same time as far as I understand. Some online stores accept bitcoin as payment. The thing about bitcoin though is that it is bought and sold from individuals and companies for many different currencies. You can buy bitcoins with your money right now but you can also mine for it and it doesn't cost you anything except since you have to have your mining rig or computer on 24/7 it could raise your electric bills and shorten your PC life span or whatever you're using. I've never tried using bitcoin myself but am just fascinated by it. So a Bitcoin wallet is a software you put on your computer similar to a torrent software. A wallet program generates and stores private keys, and communicates with peers on the Bitcoin network. The first wallet program called Bitcoin-Qt was released in 2009 by Satoshi Nakamoto as open source code. There are several thousand companies considering or willing to accept Bitcoin payment nowadays like eBay, Paypal, Tesla, 4Chan.org, OkCupid, Pizza For Coins that let you order Dominos Pizza with Bitcoin, Tigerdirect, etc. What do you guys think of Bitcoin? Do you think it's worth your time and investment? One thing's for certain we all know that not everyone will accept Bitcoin and not everyone will use it as digital currency. Since you don't have to give your name, address, credit card number, etc. to create a Bitcoin wallet and use this currency is it actually worth a try? There's also only a total of roughly 12 million existing bitcoins as of November 2013. The Federal Reserve controls money circulating all over and could control inflation but Growth of the Bitcoin money supply is predefined by the Bitcoin protocol as from what I've read. In this way inflation is kept in check. There's also an approximate creation rate of 25 bitcoins every ten minutes. The total supply is capped at the arbitrary limit of 21 million, and every four years the creation rate is halved. This means new bitcoins will continue to be released for more than a hundred years. I am well aware of what I've read about pyramid schemes, Ponzi schemes, Black markets, Thefts, Malware, etc. with the use of Bitcoin but that can happen to anyone as well even though they don't use Bitcoin. I'm talking about websites that have these softwares that try to look legit and pretend to be an update for your computer when it's actually malware or spyware, etc. in disguise and they can steal your data anyway. So I can say that these things happen anyway even though Bitcoins aren't involved but I guess that's the risk of trying something new in this digital age. I also gotta warn you guys about another type of Bitcoin-related malware called Cryptolocker. The program called Cryptolocker is a ransomware which spread through legitimate-looking email attachments, encrypts the hard drive of an infected computer, then displays a countdown timer and demands a ransom, usually two bitcoins or $300 through Moneypak, to decrypt it. It is indeed a Brave New World.
Here's a video about Cryptolocker and its dangers so watch out for suspicious email you receive.
Bitcoin by the way isn't a physical currency that you can hold but the pictures below are more a representation like a symbol, brand, or logo of that internet and digital money.
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