Bitcoins are a safe decentralized currency that’s ideal for businesses and consumers alike because it’s controlled by the people who use it, rather than banks.
Hate banks? Fed up with Wall Street incompetence and criminality? Concerned the impending economic collapse and/or runaway inflation will gobble up your savings? Are you already unemployed – or like many Americans, only one paycheck away from the streets? Do you yearn to opt out of the brutal and corrupt capitalist system but find yourself tied to a banker-controlled money system that controls virtually every aspect of your life?.
Welcome to the bitcoin (BTC), a safe, reliable open source alternative currency, created and maintained by volunteers, just like Wikipedia. Four years after their introduction, bitcoins seem to have reached critical saturation, at least in numbers of Internet and brick and mortar business who accept them. Internet merchants, especially, love bitcoins. There are no currency exchange charges and no secure payment site, credit card or PayPal fees. Even better, it’s totally anonymous. So if someone wants to donate to Bradley Manning’s defense or Wikileaks, they can be confident neither Homeland Security nor the FBI is opening a file on them.
The bitcoin, a decentralized international currency, was first introduced in 2009 by an anonymous web developer who called himself Satoshi Nakamoto. Bitcoins can be exchanged by personal computer directly through a wallet file or a website, without an intermediate financial institution. Bitcoin production is automated, limited, divided and scheduled (bitcoins are generated every 10 minutes) and given to servers or “bitcoin miners” that verify Bitcoin transactions and add them to an archived transaction log. Transaction fees may apply to new transactions depending on the strain put on the network’s resources. Each 10-minute portion or “block” of the transaction log has an pre-assigned money supply. Currently, 25 Bitcoins are generated every 10 minutes. This will be halved to 12.5 BTC within the year 2017 and halved continuously every 4 years after until a hard-limit of 21 million bitcoins is reached within the year 2140.
Bitcoins are traded like other currencies, and one bitcoin is currently worth around 43 US dollars. At present there are over 10 million bitcoins in circulation.
How New Bitcoins Are Mined or Created
The way bitcoin works is that instead of having one central authority which creates and controls the money supply (as central banks do in most countries), this work is done by thousands of bitcoin “miners.” Anyone with a computer can be a bitcoin miner. Miners who successfully create new blocks are rewarded in bitcoins according to a preset schedule. The way the bitcoin network makes sure block chains are reliable is by making them extremely hard to produce. Instead of being allowed to create blocks at will, miners have to compute a cryptographic hash of the block that meets certain criteria. Bitcoiners refer to this process as “hashing”. The only way to find a cryptographic hash that’s “good enough to count” is to try computing a whole bunch of them until you get lucky and find one that works. Experienced miners recommend the use of a GPU (graphics processing unit), which can try hundreds of millions of hashes per second.
How to Get Bitcoins
Anyone can purchase bitcoins with US dollars or other national currency from bitcoin exchanges, which operate like currency exchanges. The current value of the bitcoin is around $43 US. There are also a number of websites (see http://thebitcoinmaster.blogspot.co.nz/2013/02/websites-that-do-not-give-free-bitcoins_18.html) where people can earn bitcoins (usually 0.000007 – 0.000008 BTC) by completing surveys, viewing websites or previewing music videos. On the best paying website (http://www.bitcoinget.com/), a person can earn around .002 BTC (around 8 cents each) performing tasks such as updating business directories and about one quarter of that for flagging images with adult content.
People can purchase metallic bitcoins from numerous vendors including https://www.casascius.com/
Where to Spend Bitcoins
Most bitcoins are spent for online products and services, such as ebooks, graphics, music, ring tones, web hosting and creation, domain names and technical support (especially on Linux, Ubantu and other open source programs). An increasing number of brick and mortar businesses (especially in Europe where austerity cuts have made Euros pretty scarce) accept bitcoins as payment for products and services. With a growing shortage of American customers who can pay cash, more and more US retailers are accepting bitcoins, especially in New York and on the West Coast.
Brick and mortar merchants employ a protocol available at http://www.bitvendor.net/. It’s far easier (and cheaper) than credit card payment. It enables customers to pay in bitcoins via any text-enabled cellphone
For a list of on-line merchants who accept bitcoins check out https://www.coindl.com/
For a list of brick and mortar businesses accepting them, consult:
http://bitcoin.travel/listing-category/real-world-bitcoin-businesses/
http://bitcoinnavigator.com/section/location/location-na/
http://bcfxer.appspot.com/submissions/listbusinesses
More information on how to get a bitcoin wallet and start earning and spending them at
To be continued with a discussion of potential risks and a great bitcoin crowd funding website investigative journalists (including bloggers) can use to finance specific projects.
photo credit: gruntzooki via photopin
Crossposted at Daily Censored
