Bitcoin has employed a novel solution which uses encryption and brute-force power in order to preserve the scarcity of the currency. To start off the network, Bitcoin uses a concept known as “mining” — people devote their resources to solving a very difficult cryptographic math problem, and those who succeed generate some bitcoins. The difficulty of this problem is adjusted by the total production of bitcoins, so that the network as a whole produces a relatively constant rate of coins. The problem of cheating is essentially solved because a cheater cannot possibly hope to amass the amount of computational power needed to overpower the rest of the network.
Bitcoin is different; if it will still be around in 5 years I don’t know, but I think they have already had significant success compared to predecessors. Even if they don’t survive in their current form I believe they do represent a big step forward. Gee, I thought the currency of the past and the future was gold and silver. The concept of digital money has been tried before with limited degrees of success. Bitcoin is not filesharing software, so it does not share your files. It only uses your CPU if you want to try to “mine” bitcoins, otherwise it uses practically no CPU at all.
Invest It Wisely is about evaluating the choices that each of us face everyday. It’s about investing your time, your money, and your energy wisely, in order to achieve your goals. The end goal is maximizing your life expectation, and exploring the ways to get there. It’s a new paradigm that is in its infancy, and things are probably going to change and evolve a lot before everyone is using this. That’s the beauty of open source, decentralization, and free competition without arbitrary red-tape holding you down — things can evolve fast, and it is the user/customer that benefits. If all one has to do is install a keylogger or trojan to rip you off then we have some work to do on the security end of things.
Since anyone can run a Bitcoin node, these fees should tend toward the marginal cost of running a node, and therefore should be quite low. Bitcoin has the potential to revolutionize the online payment industry, but furthermore, it could even place economic power back in the hands of the people. Hefty transaction fees currently discourage micropayments, but Bitcoin could completely change that, opening up a whole new micropayment industry in blogging, online gaming, and many other areas. Bitcoin is also open, peer-reviewed and decentralized, which means that its fortunes don’t change on the whim of a single dictator in charge, or even a single monopoly power.
Not sure if I’m convinced that it will work out, but it will be interesting to follow the growth in the next months/years. You know, most modern currencies have been semi-digitized already by banks, governments and credit card companies. Bitcoin really took off last year; it rose from a market value of about $0.005 per BTC to nearly $1 per BTC; this is an increase of value of over 200x! With over 5 million coins in circulation, Bitcoin is currently in a nascent point of growth, and the sky is the limit.
Not sure how they would ever get off that but in many ways I hope they do…. Funny thing is that it wasn’t so different only a few decades ago. What i’m curious is if this change will come about via allowing competing currencies within national borders or whether it will come about as a result of a peg. It seems that holding anything to an artificial value is always bound to introduce distortions into the system, though hard to argue with the idea that the current system is any less distortionary. P.S. The currency is not worthless ATM because you can trade it for non-digital currency.
Re: Want to mine bitcoin? RENT ME!
This implementation solves both the problem of centralization as well as the issue of trust. To see how, first we need to look at the properties of money, and why physical commodity currencies such as gold were chosen spontaneously as money by the people, and why they have held their value for so long. What is your weekly charges to mine bitcoins and how many bitcoins you can mine in a week, instead of work for others you can mine and sale those bitcoins in the market you can earn more money in this way. Basically you buy the $400 thing from china along with a pump and stuff from ncix, hook itup, choose a mining pool., and then you generate bitcoins with it. You either keep those bitcoins like stocks and speculate with them or sell them on or go to an ATM and sell them or buy something with them. The most fundamental aspect of Bitcoin is that it is not a derivative of any other currency; e-gold is a derivative of gold, but Bitcoin simply is, just like the element gold is.
As long as Bitcoin can maintain scarcity through its encryption requirements, and evade the grasp of the money center elite through decentralization, then it has a decent chance. I think you’re right about the idea but with any technology it’s the early adopters and the evangelists that really drive the innovation and push it out in a form where it will be accepted by the masses. Bitcoin is not there yet, but could it conceivably become so?
For something to begin life as money, it should add value in order to seed its own growth. Gold added value through its beauty and artistic uses, and Bitcoin has the potential to add value through the properties of decentralization, openness, and alloscomp pseudonymity. I mention openness as the project itself is open source, and the code, protocol, and implementation are all open to scrutiny and analysis. Many various ideas have been tried over the years, such as RipplePay, eCache, and ecash.
More directly to the point of your question, currently the vast majority of money transfers are done without any fees taken. In the future, some bitcoin nodes that dedicate computational power to mining and to effectively notarizing transactions might start requiring fees to process transactions. As that happen, you’ll have a choice to still put no fee and wait until a bitcoin node accepts it, or attach a fee to it and have it processed faster. What you can do though is participate in one of the many exchanges and trade bitcoins for USD, EUR, or other various options. Bitcoin is a pseudonymous, decentralized electronic currency, and it has been designed in such a way that it functions similarly to physical commodity money, such as gold.
Bitcoin: The Digital Currency of the Future
That’s the key ingredient needed in order for this to grow! It is already accepted by some places but not a great deal of places, but this has improved a lot since 6 months ago and it’s continuing to improve. One of the qualities has to be that other people accept it! If I can’t pay for my pizza in BitCoin…or I can’t pay for my car, cable, internet, coffee, etc. then the currency is worthless. At best it is a computer game where I can win points. I honestly can’t say for Bitcoin as the specific software, but I think the idea itself is definitely not a fad.
Bitcoin has shown that it can work, and now it’s only a matter of building an ecosystem around this. It’s also entirely possible that it runs afoul of some regulation and it becomes illegal to use such software, but that’s another issue entirely. Check out the market place forum and the #bitcoin-otc channel on freenode https://cryptolisting.org/ to see my selling history. If you have some bitcoins and want to buy gold with it, here is an auction for a swiss gold coin. There are already thousands of dollars being traded in BTC every day, so while in the overall scheme of things it is still tiny, it definitely has a presence and is growing rapidly.
Previous attempts at digital currencies were rather easy to shut down. A government merely had to walk to a company’s headquarters, seize their equipment, and walk away. In the past, digital currencies that end up being successful enough to be useful have also proven to be a target for regulatory bodies that are ostensibly worried about activities like money laundering. The market for Bitcoins is still small, but it is growing every day. Popular services include VPN servers, VOIP, and web hosting, and many tangible goods are also available, such as books and T-shirts. You can check out many different services available at the Bitcoin trade page, and you can visit the Bitcoin faucet to get some free coins to get you started.
Again, Just because a company can ship things out in a timely manner doesn’t make it a deal or a hot one. This should be moved to shopping discussion if anything. Mortgage Calculator Figure out your potential monthly payments and more with our mortgage calculator.
H Bitcoin Miner – LIQUID cooled ANTMINER
It is ideal if the properties of money are inherent in the medium itself, such as with gold. Fiat currencies have value through legal force and convention; gold has value due to the physical properties of the universe. Legal force waxes and wanes, and conventions can change, but the laws of the universe stay constant. I hope something comes out of this, as competing currencies breaks the monopoly of the central banks.
All you need to know about bitcoin can be found in the outstanding docu ‘The rise and rise of bitcoin’ afterwards you’ll realize that mining is no longer for average individuals . Butterfly labs is a POS and was put into receivership or something by the US government a few weeks ago. Antminer’s are the ONLY miner in the world you can buy and get them without a huge preorder time. If you have to ask what bitcoin mining is than bitcoin mining is definitely for you.
😉 The idea of digital currency itself is one whose time is going to come sooner or later, and right now Bitcoin looks like the best iteration of the idea. It will be interesting to see how things continue to move forward. Actually, access to mobile technology is significantly more widespread than computers; I believe more than a billion phones ship per year now? I think in 5 years from now as costs keep falling we’re going to see ubiquity of the smartphone… it will be quite interesting. I personally think there will always be a need for a tangible trade-able currency that is not in digital form. There are still a lot of people in developing countries that don’t have access to computers and digital media…probably the bulk of the population out there.
I can also see websites springing up to act as “digital vaults”, but there’s certainly an element of risk there that you don’t have when you use CCs, for example. At the same time there are many advantages, too, so it becomes a tradeoff. Everything is open and the code can be scrutinized so I don’t think it’s a scheme, but whenever money is involved scammers are always attracted like flies. If tomorrow you and me are the last bitcoin users on earth, we’ll still be able to do business with bitcoins just fine.
- If I can’t pay for my pizza in BitCoin…or I can’t pay for my car, cable, internet, coffee, etc. then the currency is worthless.
- You can check out many different services available at the Bitcoin trade page, and you can visit the Bitcoin faucet to get some free coins to get you started.
- It only uses your CPU if you want to try to “mine” bitcoins, otherwise it uses practically no CPU at all.
- Basically you buy the $400 thing from china along with a pump and stuff from ncix, hook itup, choose a mining pool., and then you generate bitcoins with it.
The idea of distributed currency is a concept that has already been proven, but it’s just a little harder to say who’s going to execute the idea well and when the time is right. Plus, it doesn’t need widespread acceptance by a large segment of the population. However, the difference is that supply & demand would reflect actual market fundamentals since there isn’t anyone standing by ready to drop additional coins from a helicopter. In fact it’s quite something that the value has risen so much in spite of the very large initial inflation of the money supply that has occurred until now as a result of its birth. Like anything else, the value of a bitcoin is determined solely by supply and demand. If the market value of a bitcoin is higher than the production cost, then it will be worthwhile to devote resources to mining more bitcoins.
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I believe that nascent technologies such as Bitcoin and its future derivatives have the real potential to drive change and innovation in our world. Honestly bitcoin is so speculative its only worth it if the coins go up otherwise you will be losing money and have useless hardware sitting around. The benefit before when it was video cards was that at least you had cards, and could sell… The idea is its a small, quiet enclosed box you can sit somewhere. You can buy bitcoins from or go to one of the various ATMS around Canada. I don’t quite see how it could break free from real money at this stage because obviously I guess they earn real coin off your mining efforts and use that to run their company….
Want to mine bitcoin? RENT ME!
In this sense, the cost of mining will tend to approximate the value, but it does not drive the value. It is the combination of supply and demand that drives the value. It is entirely conceivable that at some point, the cost of mining a bitcoin will be astronomical, nearing infinity, yet the supply will be stable and the value of a bitcoin will be determined by demand. At this point, transaction fees will support the network and the value of a bitcoin should rise and fall in conjunction with its underlying economy.