bitcoin: what is it, and how to get started.

There’s a very interesting project called bitcoin, which has started to gather momentum recently, and pop up in more and more places. Bitcoin is a currency, but it has the following properties which distinguish it from what we might call a ‘physical’ currency:

• digital - Bitcoin doesn’t exist in a physical sense; the coins are stored on your computer, and are transferred over the internet.
• decentralized – There is no central governing body in control of the currency
• distributed – Transactions are made across the globe, without the need for banks or other financial institutions.

Here’s a little infomation video from weusecoins.com (CC-BY 3.0)

There is a lot of speculation going on about what will happen next. Will bitcoin be a success or a failure? Will the masses begin to use bitcoin on a regular basis? What will that mean for other currencies? Will bitcoin be able to fit into the current economic model and live alongside the legal currencies of the countries of the world? I’m not an expert on the technology behind it, and I’m certainly not an expert on economics; but maybe that is a good thing. I know that everyone using bitcoin at the moment hopes that it is given a fighting chance, and not just outlawed by governments around the globe. Should a currency not be used to give people control, rather than be used to control the people? It is unrealistic to think that it could replace all of the currencies being used around the world, but I do think it will become quite popular for certain purposes, and it will have a significant impact on the way on-line transactions are carried out around the world.

Getting started with Bitcoin: your first steps and cents.

If you are curious about all this, I would encourage you to try it out. The first step is to download the software, from here. Once installed and running on your computer, you will surely want some bitcoins. Rather than buying some straight away, there are ways to get a few freebies, to get a feel for it and decide if it’s worth your time and/or money (your other money, that is…). You can sign up at bitcoinbonus.com and earn a small amount of the currency just for signing up. You can see that further small amounts can be gained by just shopping on-line through the sites listed on the page. You can also get a tiny amount of bitcoins here, although this wasn’t working at the time of posting. The coins are then yours to do as you please with. You can buy goods or services, or sell your bitcoin for legal tender. If you want more bitcoins, you can offer goods or services to people, or buy some at an exchange. For those of you with high-end GPU’s, you can try to ‘mine’ bitcoins (think mining gold, only on your computer), although I think that unless you have a lot of resources, this really isn’t worth it.

How this will eventually turn out is anybodies guess, but I think bitcoin is destined to become increasingly more popular and controversial in the not-so-distant future. If you have any thoughts on this, let me know in the comments!