Bitcoin is a fascinating new form of electronic money that uses strong cryptography as the underlying support structure. Bitcoin is a form of electronic currency known as “cryptocurrency”. It is in my opinion a very revolutionary idea, but although it has been rapidly growing in popularity and usage it is still not completely “mainstream.” Those of you who have never heard about bitcoin may want to checkout the video I’ve posted below:
Now that you’ve watched the video and you have a better understanding of bitcoin you may be wondering how can you start using it. Well, there are several ways you can join the action.
1) Buy bitcoin at one of the numerous bitcoin exchanges (ie Mt Gox, Bitstamp, btce, cavirtex, etc – there are quite a lot more!)
2) Offer your products and services in exchange for bitcoins (ie. join the bitcointalk.org forum and post in the marketplace section)
3) Join the network of users that help secure the network by becoming what is known as a “miner”.
By mining bitcoin you essentially get to create bitcoins using your mining hardware. Later on if you wish to you can spend these bitcoins for goods and services or exchange them for US dollar or any other form of national currency. These days the bitcoin mining industry has progressed to the point that there are dedicated bitcoin mining chips out there. These chips are far more efficient than what miners were using before – mainly cpus, and GPU (graphics cards).
If you decide to buy bitcoin mining hardware I would recommend you invest in “ASIC” miners – mining hardware that use special purpose chips. There are quite a few out there but a good bet would be to invest in second generation ASIC miners from a company known as KNCMiner.
KNCMiner are due to start shipping their hardware in October (if you order now) and each unit is expected to produce a whopping 400 Gigahashes* per second – that is a lot compared to existing mining hardware. Granted there are other companies that plan to release mining hardware KNCMiner are likely to be the first to come to market as part of the second wave of dedicated mining hardware.
If you are a large investor reading this and you’d like to invest in the bitcoin mining industry I can offer my consulting services (recommended hardware to purchase, how to host them, how to set them up, etc). Use this blog’s “about me” section to get in touch with me for details.
*Worry not if you don’t understand what Gigahashes are. I will make another post hopefully soon explaining all of this.