Do You Have a Bitcoin in Your Wallet?

As you may know, I am very interested in technology, electronics and computers. I am always reading and learning about these topics as I find it necessary to adapt to our new digital world, which has changed drastically over the last 20 years.

One new technology that I have started to learn about and have become amazed by it is Bitcoin. However, I am just learning about it so I can’t tell you if it’s a good or a bad technology. I hope those of you who know more about it can respond and enlighten the rest of us.

So what is Bitcoin?

Bitcoin is a decentralized virtual currency that exists only on the Internet and can be used to buy goods and services on some online stores as of now. It's so big that the value of all outstanding Bitcoins just hit $1.5 billion. You keep your Bitcoins in a digital online wallet. You can buy Bitcoins from exchanges, trade Bitcoins with others, and most interestingly, you can generate Bitcoins through a process called mining.

Mining is basically making your computer run a program to do mathematical calculations for the Bitcoin network to confirm transactions and increase security.

While your local bank keeps a private ledger for deposits and withdrawals, Bitcoin’s ledger, called the Block Chain, is public and therefore, everyone can download a copy of it. Your Bitcoins are sent to an alphanumeric address that is randomly generated by a virtual wallet. While all transactions and wallet addresses are recorded in a public ledger, the keys needed to access funds are private, which ensures that only you have access to your Bitcoins.

Each transaction over Bitcoin network is verified by a software program that generates a cryptographic algorithm, which is sent to the public Block Chain. This is how your computer’s spare power is used to verify the validity of each transaction and earn you Bitcoins. People who actually do this work with their PCs are called Miners.

Mining takes up a lot of space on your computer, and your odds of receiving any Bitcoins from mining on your own are slim. To compensate, many people join what are known as mining pools. In a pool, people can combine their computing power to crack the codes together, splitting the Bitcoin profits among themselves.

Originally, people used the CPUs of their computers to mine for Bitcoin. Then they learned that the GPU (the video card) of the PC was much faster to mine for Bitcoins. Now there are special mining devices that utilizes microchips specifically designed to run the Bitcoin calculations; these devices can be purchased for around $300.

Since its inception in 2009, Bitcoin value has varied widely: $1 could buy one Bitcoin at the beginning of 2011, but in April 2013, you needed $230 to buy that same Bitcoin, making it a damned good investment! The value of one Bitcoin has dropped to around $140 as of now.

If you want to get started in Bitcoin business, you can visit some of these sites to learn more.

This is a short video about Bitcoin: http://youtu.be/Um63OQz3bjo

www.coinbase.com Coinbase is a Bitcoin wallet and platform where merchants and consumers can transact.

http://guiminer.org/ is one of the most popular mining programs for new users.

Are any of you using Bitcoins?