What is bitcoin? For many individuals bitcoin is an enigma, it is something that nerds use and straights stay away from. However, if you are someone who is interested in promoting liberty, freedom and alternative approaches to the use of federal reserve notes (FRN‘s), bitcoin is a truly wonderful alternative. So lets answer the question, what is bitcoin, and do it as simply as possible.
Bitcoin is a digital currency, it does not exist as paper money or as a medium of currency outside of a random string of numbers and letters. According to a great informational site We Use Coins.org, “Bitcoin is open-source. Nobody owns it; the most popular client is maintained by a community of open-source developers.” Best of all using the bitcoin network is free, you an transfer bitcoin segments too other users anonymously, securely and without being charged exorbitant banking fees. Bitcoin use is almost instantaneous in most cases, while regular banking and use of FRN’s is subject to slow transfer speeds and massive fees.
Bitcoin.org is the original site for bitcoin and according to this site, “Bitcoin is an experimental new digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bitcoin is also the name of the open source software which enables the use of this currency.” This is another wonderful site for additional information and howto guides, whether you are a merchant or just like to use alternative values to FRN’s like I do.
Bitcoin is not a currency it is a medium of trade, it has value based on the amount in use, and what the current market is willing to pay for it. This results in ups and downs regularly, one day the bitcoin may be worth 12 FRN’s apiece and the next day based on traffic with the bitcoin it could be worth over 14 FRN’s. A general rule of thumb is to approach using bitcoin as it was meant to be used, a medium of trade, I tend to keep most of the bitcoins I have gathered and will occasionally sell some based on need at the moment. However, I enjoy having bitcoin available in the event I need or want something from a vendor that accepts bitcoin. Bitpay is a great site that lists clearnet vendors that take bitcoin, and this site also offers solutions for the vendor who wants to start taking bitcoin.
So how do you go about purchasing bitcoin or getting bitcoin. One option is to have people like myself as friends, and be able to purchase from them at a slightly reduced price. This approach saves both of you money, allows friends to maintain anonymity and builds trust. Of course, there are alternatives for the person looking to purchase large lots of bitcoin. On the Silk Road there are several extremely reliable vendors that sell moneypaks of bitcoin. It is important to review their feedback and whenever possible test their reliability first. The Silk Road allows the use of a convenient method of purchase in which your money is kept safe in a holding account. I highly recommend utilizing this feature if you are new to the system. I can recommend a couple of very reliable individuals on this marketplace, though due to the anonymity of the approach I an only recommend them based on my dealings with them. Lastly you can use the state approved, taxed and monitored approach through Mt.Gox or a similar agency. Yes the risk is less, though in my experience not substantially.
When purchasing bitcoin I highly recommend setting up multiple digital wallets, use sd cards, micro cards or memory sticks and ensure that you have recorded the passwords for each wallet. Each wallet has its own unique identifier and should be treated with the utmost discretion. For those of us that use smart phones, there is a great app to create temporary wallets for transferring bitcoin around put out by blockchain, the clearnet site for blockchain also offers tracking of your bitcoin payments. We use coins also has easily downloaded and used bitcoin wallet applications. I do not recommend starting out using wallets with your terminal unless you are an avid and active linux user.
Lastly there are the miners, those individuals who have the time and energy available to “mine” for bitcoin, for the beginner I would not recommend this until you have had time to set up a series of secure wallets (you want at least 3, most of us have many more), and have had time to use a few bitcoin to get the hang of it. There are many people including myself who are willing to assist our friends, bitcoin forums offers some great advice and as with all forums, allot of terrible misinformation. Use your head, be smart, and remember folks if it seems to good to be true, it is. For current pricing for bitcoin go to Mt. Gox or blockchain, if someone is offering you bitcoin for considerably less (and you do not know them) avoid that at all costs. Remember, stay secure, follow smart protocols and more importantly stop thinking along regular lines. We are the future, but only if we are willing to change our approach.
Free the mind and the body will follow.
- How can the police seize Bitcoins? (theguardian.com)
- Bitcoin price takes a beating after Silk Road gets busted (techcitynews.com)
- The End of Internet’s Biggest Black Market Is Good for Bitcoin (businessweek.com)
- How digital currencies democratize tax evasion (qz.com)
- Bitcoin Payment Processor Coinvoice Begins Accepting Payments (onbitcoin.com)
- Bitcoin Bets Feed Twitter Dreams as Regulators Circle (bloomberg.com)
- Bitcoin sinks in value after FBI busts Silk Road drug market (reuters.com)
- Bitcoin price takes a beating after Silk Road gets busted (venturebeat.com)
- Silk Road Closure Causes Sharp Drop In Bitcoin Value (techweekeurope.co.uk)
- FBI arrests Silk Road site suspect (bbc.co.uk)