Tag Archives: bitcoin

An introduction to Bitcoin (Video)

bitcoin

Greetings!

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.

Bitcoins valued at over $30 per bitcoin now!

Wow. That’s pretty much all I can say. The recent growth of bitcoin has been nothing short of astronomical! I never would’ve guessed that back when I first found out about it this little “hobby e-currency” (what I thought of it at the time) would grow in value and popularity so fast. Now that I think about it some more I wish I bought more! Is now still a good time to buy some bitcoins? I think so but please don’t take this as investment advice – do your own research. However if this catches on even more it’s going to BIG, and I mean really big. My gut feeling tells me that I’ll see an exchange rate of $100 USD per bitcoin. Only 21 million bitcoins will ever be minted (by a process called mining – research it at the bitcoin wiki) so even if several million people start to use it you know it’s going to HAVE to go up in value.

Speaking of the bitcoin value, I found a really cool website that displays real time bitcoin market data. It allows you to see every trade that passes through the Mt. Gox exchange (currently the most popular and most established bitcoin trading market). Here is the link to the site:

http://bitcoin.clarkmoody.com/time-sales/

If you’ve got some spare bitcoin please consider donating a few bitcents to the author of that page – it’s extremely useful and nifty in my opinion.

Hope you found it useful. If there are any bitcoiners in the house please feel free to leave a comment.

Cheers,
Alan

Bitbills – Bitcoins you can hold!

bitcoin

Greetings everyone.

I’ve discovered something pretty cool that I’d like to share with those of you who have an interest in bitcoins. Apparently someone finally came up with a method to create the bitcoin equivalent to paper money. Yep, you can how hold bitcoins in your hand sort of speak. This neat new solution is called Bitbills.

Bitbills allow you to physically store the private encryption keys that give you ownership to your bitcoins on a pastic card via the use of QR codes.¬† So basically encoded within the QR code is a key or multiple keys that give you ownership over a certain amount of bitcoins (depends on the denomination of your Bitbills). For example you can give your friend a 5 BTC (5 bitcoins) Bitbill, and he then scans the QR code with his smartphone or PC QR code scanner and after importing the bitcoin private keys contained within the Bitbill into his bitcoin software he’s got 5 more BTC.

How does it work?

For this I will let the Bitcoin creators do the talking:

When your computer stores bitcoins, it does so by saving secret pieces of data called private keys. Since only you have your private keys, only you can spend your bitcoins.

To make Bitbills, we start by creating a shiny new bitcoin address. Depending on the denomination of the card, we send a certain number of bitcoins to the new address. Then, we encode the address’s private key in a QR code. Finally, we manufacture the actual plastic card, hiding the QR code between layers of the card so that it can only revealed if the card is destroyed. On the back of every card we print the address itself, so you can always check how many bitcoins are stored on a card.

Security is a crucial component of Bitbills. There are two key aspects to card security: anti-counterfeiting and tamper-evidence.

We use industry-grade production techniques and special security holograms to make Bitbills nearly impossible to counterfeit. It’s important that when a stranger hands you a Bitbill, you can be sure that it was made by us.

It’s also important that it is clearly evident when a card’s private key has been accessed. By embedding the key inside the card between two secure holograms, the only way to access it is by visibly destroying the card.

Whenever handling a Bitbill, always be sure to check that the design matches the one shown on this website, and that both the front globe hologram and reverse “Secure” and “Valid” hologram are intact. Do not accept a Bitbill if it’s damaged, shows signs of tampering, or looks unusual.

How do Bitbills look like?:

FAQ:

What are Bitcoins?
Bitcoins are the currency traded in the Bitcoin network, which is the first completely open-source, decentralized digital currency network. You can read more at bitcoin.org.

How can I be sure my Bitbill is authentic?
Check that the design matches the one shown on this website, and that both the front globe hologram and reverse “Secure” and “Valid” hologram are intact. Do not accept a Bitbill if it’s damaged, shows signs of tampering, or looks unusual.

Do you keep a copy of the cards’ private keys?
After each card has been produced and proven functional, we delete all records of the private key. This means that once the card leaves our hands, we can no longer access the associated bitcoins (be aware, this means we also can’t help if you lose or destroy your card).

At the moment I’d say that Bitbills are still a bit “geeky” and not as user friendly as they should be, but I’m sure with time this will improve. The main problem is importing them into your bitcoin wallet. It would be really nice if there was built in support into the official bitcoin client software to do this, but unfortunately there isn’t at the moment. Once the official linux and windows bitcoin software have this feature I believe that Bitbills will be truly more functional and convenient.

So if you for some reason want to take your bitcoins with you there is now a way! Isn’t progress wonderful :)?

For more details about Bitbills please see their homepage at: http://www.bitbills.com

That does it for this post. I hope you found it informative.

Cheers,
Alan

The Bitcoin Sun – The First Bitcoin Newspaper

bitcoin logo

Hello dear reader.

It looks like the bitcoin community is continuing to grow. I just found out that someone published the very first newspaper dedicated to bitcoin and the bitcoin community. Pretty cool! This newspaper is called “The Bitcoin Sun.”

Link to download the first edition of The Bitcoin Sun:

http://www.bitcoinservice.co.uk/files/866

I thought I’d share a link to where you can download a copy for yourself. I’d say it’s worth a read. It is a bit rough as is to be expected for the first issue of something new, but it does contain some intersting articles. The one that I’d say any bitcoin newbie must read is the one entitled “From Alice to Bob: A not so simple introduction to bitcoin’s inner workings” Do not get intimidated by that title. The article is not _THAT_ complex so if you flex your brain a bit you no doubt will be able to get it. Bitcoin is complex in a sense, but it is an ingenious one (my opinion – if you disagree leave a comment) and once you begin to understand its inner workings more and more I am pretty sure you tooo will agree with me. What can I say, I wish I’d have thought of it myself!

OK folks, that does it for this post. Stay tuned her for more bitcoin related posts. I am also thinking of maybe starting an entire blog dedicated to bitcoin. Not sure at this moment if I have enough time to update yet another blog, but I shall at least give it a try.

By the way, I invite you to join me and others on the bitcoin forum:

http://www.bitcoin.org/smf/index.php

Cheers,

Alan

Bitcoin: An Innovative Alternative Digital Currency

bitcoin logo

Hi everyone.

If you’ve been paying attention to my previous posts you probably already know that I’m into this new e-currency called Bitcoin, and that I made several posts about it (here, here , here and here). There is quite a lot of useful reading material about bitcoin out there, and I just came across some new reading material that I’d like to share with you. It is a paper written by a Yale Law School student. While this paper is still a preliminary draft I would still recommend it to new bitcoin users.

There is one thing that I’d like to mention. In the paper the author refers to bitcoin as a fiat digital currency. This is not true in the strictest sense of the word “fiat.” Bitcoin is not fiat because fiat money only has value due to government regulation or law. No government controls bitcoin so its value is not based on the fact that some government decreed that bitcoins are “legal tender.” Bitcoins are instead free-market money because PEOPLE choose to value them and to make use of them as a medium of exchange.

Anyways, technical details aside (I did say that the author’s paper is preliminary didn’t I?) here is the link where you can download a copy of this paper (PDF format):

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857

Enjoy!

Cheers,

Alan

Lets clear up common Bitcoin misconceptions

bitcoin logo

My interest in Bitcoin having been rekindled I find myself in a rather interesting situation. When I tell people about Bitcoin and how it works¬† I sometimes run into a brick wall of misconceptions and biases, so to clear these misconceptions I send them to the Bitcoin Wiki. They have a nice section called “Myths” where they attempt to “clear up common Bitcoin misconceptions” and I personally think they’re done a good job. If you’ve just gotten into Bitcoin and you’re not quite “getting it” and think that Bitcoin is still just another e-currency doomed to failure, have a look at this link please:

https://en.bitcoin.it/wiki/Myths

Stay tuned to this blog as I have some big plans for Bitcoin. I am working on launching quite a few online services that will work solely with Bitcoins thus hopefully I will be doing my share to make the bitcoin economy grow and add extra value to it as well.

Cheers!

Alan