BITCOIN BASICS
Other wise refered to as electronic money or virtual currency, bitcoin is a peer to peer payment system that offers a 21st century alternative to regular banking.A bit coin is something most users will never see and never touch beyond there computer screens. Exchanges are made through wallet software rather than the traditional wallet in your back pocket and there exists no central bank or authority so the value of your bank balance is set entirely by the supply and demand of the market.
BUYING THING WITH BITCOINS
As with all money its best if your able to spend it. Its been gradual but there are more and more commodities becoming available to bitcoin holders, perhaps the most high profile company accepting this currency is virgin galactic, there upcoming space tourist flights are purchasable with bitcoin. If your prefer your transport a little more traditional and some what safer then lamborghini is the first motor company to give the go ahead and even musicians are accepting bitcoin for payment with Mel B being the first to start this trend.
THE NUMBERS
Bitcoins supply is limited and the production of bitcoin is called mining with millions of dollars worth mined or excahanged electronically every day. every bitcoin transaction is verified using an extremely complex algorithm and these verificitions are done by a large network of mining computers competing against each other, when a miner successfully completes a transaction they are rewarded with a small amount of bit coin, this is also how new bitcoins are introduced into the system. Mining is a huge amount of work, globally the network of computers is over 250 times more powerful than the worlds top 500 supercomputers combined.
THE VALUE
With nothing to actually hold in your hand bitcoins value might seem hard to value and as a new concept it does seem to fluctuate, how ever in general the value seems to be increasing. In nov 2011 , after a crash , a bit coin was worth 2 US dollars , in nov 2013 a bit coin exceeded over 1000 US dollars in value and was for a short time worth more than an ounce of gold, though its value has since fallen.
BITCOINS AND BANKRUPTCY
You have to speculate to accumulate and there are there is no shortage of speculators when it comes to bitcoin. While there are winners there are bound to be losers too. In Feb 2014 , Mt Gox the one time largest bitcoin exchange was forced to file for bankruptcy protection due to possible hacking, theft or mishandling that cost them in excess of 450 million dolllars and be aware that Bitcoin is a currency that can loose up to 80 percent of its value in seconds although this is unlikely.
BANNING THE BITCOIN
Probably because it goes against the traditional banking system , works outside traditional banking regulations and sticking 2 fingers up in the air to the banking elite , bitcoin is outlawed in many countries around the world and is frowned upon by many others. In July 2013 thailand became the first country to completely ban the currency although they later relaxed the ruling and china band banks from trading bitcoins in dec of the same year. The US treasury has also flexed its muscles by shutting down a physical bitcoin production company in 2013, althought we know the bitcoin will remain no matter what.
KNOW YOUR LIMITS
The number of bitcoins that can exist is limited to 21 million and the production rate is halved every 4 years to ensure the value of a bit coin is not lost, this means that supply will run out about 2140 and although miners will no longer be rewarded with new bitcoins they will still be paid for there efforts through transaction fees. As it stands today with just over a century before this deadline roughly 64 percent of bitcoins sit unused in various owners accounts, gaining and loosing interest over time.
Wikileaks
The much published company wikileaks relies heavily on bitcoin , in 2011 this non profit whistle blower group began using bitcoin as a way of processing donations because other money transfer companies wouldn't deal with them. To be come so dependent on something so unpredictable wis perhaps not the wisest of moves but so far using the cryptocurrency has not done any harm to the media profile of julian assange and company.
SILKROAD
The equally infamous silk road website used bitcoins as its form of currancie, a black market trading site that specialised in illegal drugs and other goods , it provided browsers with anonymity and made its money using bitcoin. When alleged site founder Ross ulbricht was arrested his estimated fortune was so inconceivable that well over half remains still unaccounted for.
Bitcoin begginings
Satoshi Nakamoto is the person or persons supposedly behind bitcoin. Launching the software back in 2009 nakamoto past majority control onto scientist gavin andresen in late 2010 and andresens comments capture bitcoin perfectly he says ' its like better gold than gold'. nakamoto is believed to be in possession of over 1 million bit coins equivalent to over 850 million dollars but his name is probably a pseudonym as the real identity of nakamoto is unknown. i have hard it suggested that electronics company samsung , toshiba, nakamicchi and motorola are the founders but there has been no conformation and will likely stay a mystery for a long time to come.
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