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April 13, 2013

What is Bitcoin?

Been hearing about Bitcoin lately? If that’s the case, you might have asked yourself the question above. If you’ve just tuned in like me, here’s a graphical explanation of what is Bitcoin and how it works.

bitcoin

To start things off, Bitcoin is an online digital currency that was introduced back in 2009. It is also known as the “Gold for nerds” and is different fom PayPal as it is not backed by an official currency. Bitcoin is its own currency that is not managed by any government or central authority. Watch the video below to be enlightened further.

Bitcoin is making a lot of noise nowadays that it has captured the attention of the financial sector, investors and venture capitalists due to its high volatility. As of writing, 1 Bitcoin (BTC) is equivalent to $117 US. (It was at an all time high of $266 last Wednesday) However, while the process of obtaining and holding BTC transactions are secure, the individual wallets and exchanges are still vulnerable to hack attacks. As to whether Bitcoin will become a viable currency in the future or not remains to be known.

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23 Responses to “What is Bitcoin?”

  1. kaninglamig says:

    I’yeah ive been hearing a lot about these Bitcoin. I’m just wondering though how would your usual accounting principles affect these types of currencies? I mean with the inflation, GDP and stuff like that if these are country agnostics?

    • Louie Diangson
      Twitter: John_Louie
      says:

      I’m wondering as well. But I don’t think the usual principles apply. It’s not backed by any central bank. Free for all.

    • Mr A
      Twitter: solidad
      says:

      I am not sure if this is the answer to your question.

      Bit Coins are limited and it always adjust the difficulty of obtaining one thru time. Unlike before, people can mine bit coins using their CPU because it is easy. Today, you need special hardware to make mining efficient. I belive by 2040, there will no longer be any bitcoins generated. It will now depend on the transaction of current bitcoins that are in circualtion.

      The recent spikes on bitcoin is attributed to the movement of exsisting one. Since the news of gorvernment and organizations starting to look at bitcoin, theres a demmand that showed.

      As to the effects of inflations and GDP. I am no accountant, but what I understand it will be country agnostic. Unless you convert your BitCoins to cash, that’s the time it will affect the economy.

      I hope it helps.

      My interest if its viable to mine bit coin the provice. The electricity is cheaper there.

  2. anOnymous says:

    I want BitCoiN

  3. Iyan Sommerset
    Twitter: iyansommerset
    says:

    Nice and scary thing about bitcoins is that you can use them for anonymous online transactions – buying drugs, illegal shit, etc.

  4. jeprokz says:

    im surprise nobody knows about bitcoins for 4 years?haha (im lucky) i’ve been mining bitcoins since it started in 2009 and i’ve bought some mining rigs like avalon asic ( first mining rig to be release as of now)
    and the highest bitcoin exchange rate ive ever deal is $266/btc! easy money :)

    if you want to know more and invest in bitcoin just send me an email i will help you

    • Mr A
      Twitter: solidad
      says:

      Are you living in the country? How much do you pay for power and what is the ROI between the Rig and the operational expense?

    • jeprokz says:

      im working here in riyadh free electricity my mining rig hashing speed is 68GH/s max this is what i received last 3 months before the bubbles pop

      http://bit.ly/139Q6Qw

    • pagari says:

      whoa. do you have your avalon asic in hand? mining with it now? missed it by hours, really wanted one. was priced out on batch 2 and 3.

    • jeprokz says:

      yup… the batch 3 price range about 780btc but its already sold out now they are selling chips only for those who want to make DiY rigs. im waiting for my 2nd rig this coming june-july 60gh/s bfl single sc luckily i ordered it before they changed the price from $1,299 to $2,499 and they nerf the hashing speed to 50gh/s :p

    • sir interested me sa bitcoin mining.. nasa riyadh din me right now eh.. where do i start? give me some tips master… here’s my email crankiz_under8d@yahoo.com.. ill wait for ur response thnkx

    • bahmak says:

      hi jeprokz,
      I am a bit lucky that I started trading bitcoin late 2012. Back then lots of my friends think I’m crazy…now ako natatawa sa kanila dahil
      gusto ng balato or maghiram. They knew million(php) ang kita. I know nothing about hardware but in terms of trading di pa ako natalo, “buy low sell high” lang ginagawa ko. I have business proposition sayo about sa litecoin here sa United Kingdom. If you are interested please contact [bahmak2004 @ gmail.com]

  5. Milan says:

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  6. jeprokz says:

    yup… the batch 3 price range about 780btc but its already sold out now they are selling chips only for those who want to make DiY rigs. im waiting for my 2nd rig this coming june-july 60gh/s bfl single sc luckily i ordered it before they changed the price from $1,299 to $2,499 and they nerf the hashing speed to 50gh/s :p

    • pagari says:

      wow. so you’re killing it right now huh? how much btc per day? you must have made your money back on that avalon asic by now. all profit from now on? hehe do you mine on your own or pool mining? your so lucky since by the time batch 2 and 3 ship the difficulty is gonna rise and it will be much much harder to mine. spike will probably come middle of the year when all the avalon’s are shipped together with the chips they are selling right now. as of last count i think the projected number is 490,000 chips? so avalon, bfl, bitfountain, asicminer that’s a lot of asic machines out there man. do you still think mining will be profitable? i can’t decide which way to go, bfl or a diy rig. but since bfl hasn’t shipped anything, i’m leaning towards going with a diy rig.

    • jeprokz says:

      solo mining since mataas naman hashing rate ko hehe…but sometimes im connecting to btcguild

      as of now my current speculation is once lumabas mga BFLs super duper very hard na ang difficulties of mining bitcoins expected network hash rate will be 250TH-350TH/s maybe nasa 19m difficulty na.kulang isang araw para makumpleto 0.00001btc hehe but for now kung kaya mo mag DiY naman pede ka bumili ng chips sa mga developers sa zefir sa bitcointalk nag purchase ng 10k chips ngayon binebenta nya ng mas mura hehehe

  7. pagari says:

    yeah, buying chips is the way to go. not really worried about bfl, even if they get their sh*t together they will ot be able to ship all those units on their promised dates. if i get a rig in early august i think i can still make money.

  8. […] this is your first time hearing about Bitcoin, we recommend watching the video in this article […]

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