What the heck is Bitcoin?

Over the past year, Bitcoin has generated a lot of buzz because of it making some people very rich. Here’s the answers to some of your Bitcoin questions.

 What is it?

Bitcoin is a virtual currency. You can not hold a bitcoin in your hand. You can send bitcoins virtually to another person through highly encrypted transactions. There is a limit to how many Bitcoins will be in existence once they are all “mined”.

How do I get it?

You can buy them, trade for them, or “mine” them. Mining is in essence donating your computers processing power to handle these highly encrypted transactions. Because these take up so much processing power, people team up into “mining pools” so all these computers work at the same set of transactions. When Bitcoin first started out, it was relatively easy to mine and get bitcoins. Now, it takes highly specialized machines to mine. I wouldn’t start mining personally.

 Why are Bitcoins worth so much?

Speculation. There are plenty of theories on why Bitcoin has such a high bubble, but it’s essentially people thinking they’re worth a lot, so they pay a lot.  In November, prices reached over $1000 per bitcoin. Pretty amazing seeing as their starting value was 0$.

Why are people accepting virtual money?

If someone thinks a currency is worth a product, they will trade for that currency. The benefits of Bitcoin are numerous, but some include it’s a currency that isn’t tied to a government, it’s usually a very secure transaction, and it’s hip.

I hope that answers some of your questions on Bitcoin, let me know in the comments if you have any more.

Early adopters of BitCoin.

 

giantfromthenorth
Technology, games, and how gaming influences the world is what I love to talk about.

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