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Sunday, February 9, 2014

1454. What is Bitcoin?

You know I have been hearing a lot about Bicoin recently and although I try to keep up with the tech trends I really can't get my head around what this is and how it effects me. Do you have any information?

Bitcoin is the first decentralized digital currency.  Simply put they are Money. And you can send bitcoins over the internet.  Some advantages are you can send them directly to other people.  No banks or middleman.  Therefore fees are lower or non at all.  You can use them in any country.  They can never be frozen.   And they can't be traced.  This has many advantages.

If you have a Bitcoin and somebody else has a product you want to buy you could use your Bitcoin to buy it. IF the other person is willing to accept Bitcoin as payment.

Today there are many merchants that accept Bitcoin as payment in the same way they accept PayPal, or any of the credit cards.  There are exchanges that will exchange Bitcoin for other currencies like the US Dollar, Euros, or British pounds.  As an example the exchange rate for a Bitcoin at this time of recording is 1 Bitcoin is worth $619.00 US dollars.  A 21% drop when an exchange (Mt. Gox) stopped trading Bitcoins.

There are two ways to obtain Bitcoins.  One is to exchange money, goods, or services for Bitcoins.  The other is to "Mine" them, like Gold.  The original architects of the bitcoin (who are unknown) made a decision that there would be a limit of 21 Million bitcoins.  To date about 11 million bitcoins have been mined.  You can buy equipment to mine bitcoins.  It is done with computer hardware and software.  As more and more bitcoins are mined the more difficult it becomes to "mine" it.  Just like gold.

My advice to you Ken is to treat getting involved with Bitcoins the same way you would be involved in trading in very high risk commodity.  Some experts feel Bitcoins will fall 99 percent in value by June.  Others feel the future of commerce are Bitcoins.

Try or use you favorite search engine and type in Bitcoin.  There are many articles available to learn about the Bitcoin.

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