What Can I Use Bitcoins For?

Practically, almost any product or service that can be bought with dollars or other currencies can also be bought with bitcoins. On the other hand, the high volatility of bitcoins is a huge risk for some people that might want to use this cryptocurrency, but they are afraid about price differences. Even so, the characteristics of bitcoins make them perfect for internet payments:

1. Fast transactions

A bitcoin transaction is processed in 10-15 minutes. In case of a bank transfer, it might take hours or even days for the money to get from one account to the other. Some might say that PayPal or other ewallets are even faster. It is true, but there are other aspects that ewallets can’t give: privacy and smaller commissions.

2. Privacy

When you send bitcoins to a partner over the internet, the transaction will be registered in a blockchain. The list of transactions is public, and it can be verified on specialized websites. Only the identification number, the sum and the time are recorded. There is no way for somebody to find out from where the bitcoins come, and where they go. This is characteristic of bitcoins attracted many people. Well, some of those are interested about it because they can buy illegal goods with those, but the majority of bitcoin users are people that want to buy legal items and services, but which don’t want to disclose their identity. Porn and gambling websites might be immoral, but they are not illegal, so people that want to subscribe for those services can safely pay in bitcoins on the websites that accept this currency, knowing that their reputation will not be affected.

3. Smaller commissions

The average commission is 0.002 BTC for a transaction. It is significantly smaller compared with the PayPal or banking commissions. Moreover, you are not even obliged to pay it. By paying a commission, you “reserve” the computational power of a pool (or at least a part of it), to process your transaction faster. You even have the possibility not to pay the commission. In this case, you might need to wait two or even three days for your transaction to be processed. If you are not in a hurry, this might be the perfect opportunity to make money transactions with zero costs.

Of course, there are also disadvantages for using bitcoins, such as the possibility to lose them. If somebody steals your bitcoins, or if you delete the wallet files, it is impossible to recover those. As long as the bitcoin is not regulated, there is no central organism for arbitrage between divergent parts. In other words, you can’t complain if you lose or you are robbed by your bitcoins, simply because there is nobody to complain to.

Bitcoins are only a part of the cryptocurrency world, as there are many other virtual currencies that might be a good alternative. Devcoins, Litecoins and Dogecoins are only a few of the words that you keep hearing lately

 

Who invented BitCoin, Who keeps track of it all and How Can I Get Some?

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BitCoin: So how exactly does money get created?

Your bank gets to produce money by lending it out.

Say you deposit $1,000 along with your bank. Then they lend out $900 of it. Suddenly you’ve $1000 and somebody else has $900. Magically, there’s $1900 floating around where before there clearly was merely a grand.

Now say your bank instead lends 900 of one’s dollars to some other bank. That bank consequently lends $810 to some other bank, which in turn lends $720 to a customer. Poof! $3,430 immediately – almost $2500 created out of nothing – provided that the financial institution follows your government’s central bank rules.

Creation of Bitcoin can be as distinctive from bank funds’creation as cash is from electrons. It’s not controlled with a government’s central bank, but instead by consensus of its users and nodes. It’s not developed by a small mint in a building, but instead by distributed open source software and computing. And it needs a questionnaire of actual benefit creation. More on that shortly.

Who invented BitCoin?

The initial BitCoins were in a block of 50 (the “Genesis Block”) developed by Satoshi Nakomoto in January 2009. It didn’t obviously have any value at first. It was merely a cryptographer’s plaything centered on a document published 8 weeks earlier by Nakomoto. Nakotmoto is a seemingly fictional name – nobody seems to learn who he or she or they is/are.

Who monitors everything?

When the Genesis Block was created, BitCoins have since been generated by carrying it out of checking all transactions for several BitCoins as some sort of public ledger. The nodes / computers doing the calculations on the ledger are rewarded for doing so. For every group of successful calculations, the node is rewarded with a specific amount of BitCoin (“BTC”), which are then newly generated to the BitCoin ecosystem. Hence the definition of, “BitCoin Miner” – because the method creates new BTC. Since the method of getting BTC increases, and as the amount of transactions increases, the task required to update people ledger gets harder and more complex. Consequently, the amount of new BTC into the machine is made to be about 50 BTC (one block) every 10 minutes, worldwide.

Even though computing power for mining BitCoin (and for updating people ledger) happens to be increasing exponentially, so may be the complexity of the math problem (which, incidentally, also requires a specific amount of guessing), or “proof” needed seriously to mine BitCoin and to be in the transactional books at any given moment. So the machine still only generates one 50 BTC block every 10 minutes, or 2106 blocks every 2 weeks.

So, in a feeling, everyone monitors it – that’s, most of the nodes in the network keep an eye on the annals of each and every single BitCoin.

How do I get myself some BTcoin?

First, you’ve to really have a BitCoin wallet. This article has links to have one.
The other way is to purchase some from another private party, like these guys on Bloomberg TV. One of the ways is to purchase some on a change, like Mt. Gox. And finally, one of the ways would be to dedicate lots of computer power and electricity to the method and develop into a BitCoin miner. That’s well away from scope with this article. But when you yourself have a couple of thousand extra dollars lying around, you will get a significant rig.

 

Written by BTcoin expert !

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