Are you using Bitcoins? I’m missing topic about this one here… I think it can change the world.
Bitcoin offers pseudonymous electronic cash transaction over the internet (for nearly anonymous transactions I’ll share some tips in next article). It is mix of technologies which allow speedy transfer of value privately without any barriers.
There are two bitcoins:
With lower b - bitcoin as the underlying technology (mainly the blockchain - which I’m sure we will hear in the future a lot). Blockchain offers distributed accounting ledger which is revolutionary in its transparency and decentralization.
With capital B - Bitcoin as the unit of the currency we use to pay with (BTC is shorthand). In this sense currency Bitcoin is first application (example) of the bitcoin blockchain.
I’d like to introduce Bitcoin little bit to those who might not heard about it and share some interesting facts laid out for non-it geeks Please read my article:
The phenomenon of recent times, which was until recently the domain of programmers and IT professionals is starting to wrinkle central and commercial bankers.
Bitcoin is a virtual Internet currency. At first glance, it is just another attempt to dematerialize money and achieve higher transaction speeds. At second glance it is very unique - there is now central or commercial bank nor other institution behind its currency emission. It has no headquarters or supervision, and just like the protocol on which the Internet is built, it is decentralized and entirely independent of the world’s governments.
Inventor of Bitcoin is unknown programmer with the pseudonym Satoshi Nakamoto. His concept was followed by implementation team of about 25 professional cryptographers who since 2010 enhance the security protocol, debug, and tune its internal code. The program is open source and free for download. You can run it on Linux, Mac OS and Windows platforms. The community project, though still in beta, has managed to achieve a market capitalization of about 11.5 billion US Dollars.
Bitcoin in its three-year history has come a long way. From ordering pizza for 10,000 BTC (shorthand for Bitcoin) to a current rate of about USD 600 per 1 Bitcoin. What is behind its success? It is a unique combination of technologies: accounting books are decentralized and shared in peer-to-peer network of thousands of nodes (like BitTorrent), which ensures high stability of the network. Electronic coins are protected by advanced cryptography and coin disposition is tied to electronic private keys (same technology as behind PGP mail encryption and SSL internet banking encryption). The keys are password so complex that even in future it will not be possible to guess them, because number of possible variants is equal to count of the stars in all the galaxies.
High-speed processing of payment transactions and low cost - are the main advantages of this electronic currency. But money is also a store of value. Bitcoin is in this respect similar to gold rather than fiat currencies because it lacks the possibility of printing additional bills or notes. The core of the algorithm - the only real controller of the currency - reduces the amount of currency emission to 21 million Bitcoin. It is expected that the currency Bitcoin will be rare and, together with the growth in popularity gradually valorize. We are well prepared for this - every bitcoin is divisible up to 10 decimal places. To make initial coin emission fair, Bitcoins are “distributed” to the individual operators nodes, to the extent in which they are involved in operation of the network and transaction processing.
In addition, owners of nodes pay for employee wages and operation of sophisticated hardware and software acquisition by earning fees from transactions. When the consignor is sending money he can choose priority of the transaction by setting its fee freely (almost zero fee). High fee transaction will be prepared in 10 minutes, near zero fee transaction can be processed in the coming hours. You usually pay less than a tenth of mille from amount sent. Transaction costs are determined by perfect market environment and depend on network utilization. Network performance is increasing, the current capacity (about 23.000.000 petaflops) is equal to the most powerful mainframes on the planet combined.
You can pay with Bitcoin for coffee or a sandwich, purchase hardware or software from Dell and Microsoft, contribute to Wikipedia, Doctors Without Borders, Electronic Frontier Foundation, buy a domain name with Namecheap or rent Wordpress.com blog or cloud services Mega. You can transfer value from Amsterdam to the end of the world any time you want. There are first bitcoin ATMs launched. Malta based first hedge fund was designed to take advantage of deflationary tendencies Bitcoin. Chinese try to overcome their restrictions on individual foreign exchange. Bitcoin attracts many private investors and speculators. Swiss bankers, US FinCEN, R3 banking consorcium and the ECB are looking at Bitcoin with apprehension. Bitcoin may revolutionize but also risk. A risk is the chance.
Are you using Bitcoins?