Bitcoin: Understanding What It Is

Bitcoin

Understanding the history of something is always helpful and “Bitcoin” has already been around for 5 years but it already has a  rich history. It was created in 2009 by someone working under the alias Satoshi Nakamoto and currently no one knows who he was, or even if the name represents a person or a group. The mystery surrounding the name has grown over the years, because in 2010 it seems that Satoshi Nakamoto, either himself or his team, disappeared. Some have said that because the name was Japanese, Satoshi Nakamoto must have been as well. Others say that because the Bitcoin program was not titled or commented in Japanese, in addition to his use of english on his P2P Foundation profile, he could not have been Japanese. Regardless, it has been said that before he disappeared Satoshi mined the first Bitcoin block,  creating what is sometimes referred to as the “genesis block,” making off with just over 1.6 million Bitcoin. Bitcoin has reached over $1,000 USD each, and because every transaction is made public on the “Blockchain” people saw that only about a quarter of the Bitcoin Satoshi had ever changed hands. So it is estimated that he was sitting on somewhere in the neighborhood of $1.1 billion.

While all of this may be interesting to read about, it is still just a bunch of words to everyone that still has no clue what Bitcoin is all about. Bitcoin is a digital currency that can be exchanged without any middleman. There is currently a Bitcoin exchange where they are bought and sold, but there is another more interesting way to get them, it is called “Bitcoin Mining.” Quick and dirty, in order to mine a program, such as MultiBit, must be downloaded and installed on a computer. There is also software available for the Mac and Linux operating systems as well. Once the program is downloaded and installed the user is given a “local wallet” and, basically, an account number associated with your wallet. After that the user navigates to a site such as Bitcoin CZ Mining, signs up, and then downloads another program called GUIMiner. After downloading this program on as many computers as possible the user starts mining .

Obviously there is a lot that could not be explained in this brief article. Security, for one, is extremely important when dealing with any currency. The more information that is consumed on the subject the more information seems to appear. It should be understood before jumping head first into the sea of Bitcoin, the amount of currency that can be mined by just one person is pretty small. It is possible to work with other people in order to mine faster than you could alone, called a “Pool.” It takes a little getting used to some of the rules of pooling with other people. Because the leader of the pool has the power, once a block has been discovered and mined, to leave with the block of 25 Bitcoin. Although most of the time this does not happen, it is still a distinct possibility.

Just like any new venture it is important to weigh, and understand, all of the risks involved. If, at any point, more money is going into purchasing or mining Bitcoin than is coming out of it, it may not be a venture worthy of anyones time. As more Bitcoin are mined it becomes more difficult to find new ones. At any rate at least the world of finance has been given a little bit of spice.

Opinion By Phillip Schmidt

Sources:
Motherboard
Bitcoin CZ Mining
Tech Crunch

One Response to "Bitcoin: Understanding What It Is"

  1. jamie   June 15, 2014 at 4:39 pm

    This is kind of a misleading article – no CPU can mine bitcoins anymore, please research more thoroughly first.

    Reply

Your Thoughts?