Bitcoins: How They Work, How to Get Them, and How They Will Change the World

I am sure you have heard of Bitcoin in the news recently. It seems to be causing quite a stir, particularly with the amount of people who have made it ‘big’ recently, but also with the inability to chance their legal status. On this page I want to decipher a little bit about what Bitcoin is, and perhaps more importantly for you, how you can get some and how you can spend it. This is not a complete guide to Bitcoin. It should give you a nice push in the right direction though.

Bitcoin is a virtual currency, and probably the best type for online casino transactions even invented. It is the only 100% anonymous currency, Since there is no way to personalize them, online new casinos and betting sites incorporate them in a standalone situation, but the day when the older sites will is on the horizon. It is not a currency in the traditional sense of the word though. Think of it as this. It is something which has been assigned a value that can be exchanged for something else of value. That is all a currency really is. They were worth precisely nothing until somebody decided to say ‘hey, this is worth such and such’ and then someone else agreed and paid for them. This is why the price goes up and down so often. There is no ‘benchmark’ for it. The value of the currency is completely controlled by those that accept and spend it. This is the new global currency with no transaction fees or taxes.

This means that it can be used in every country freely. The governments and banks have no control over it, only the account owners have any control. This is why so many big banks worried about its use. You may have seen on the news recently that China has really started to clamp down on it, and the U.S is considering the same recourse, but both have been unsuccessful. It is unlikely this will happen any time soon in any other countries though as it is being integrated everywhere and it is open source. That means that the language and programming of bitcoin transactions have been created, and are being maintained by volunteers. It also means that no single entity could ever own the “rights” to bitcoin.

Bitcoins are obtained by ‘mining’ or buying them. There is special computer software out there which requires your computer to solve extremely complex mathematical calculations, and for doing this you can make a little money if it were 5 years ago. I am not going to go into depth on how this works at the moment. All you need to know is that computers ‘create’ them and there is nothing tangible to back them, like gold used to be in the USA. It is not a quick process by any means as it takes an incredible amount of processing power to even begin to “put a dent” into anything. This is how it all began though. Oddly, the best computers to mine with are set ups with 100’s of graphics cards, not large severs that would cost too much in power consumption alone.

There are a few ways in which you are able to obtain Bitcoins in 2014:

1. Mine for them yourself. This is perhaps one of the more ‘obvious’ ways. However, it is worth pointing out that you are going to need to have a pretty powerful computer to be able to do this. As a result, one of the other methods may suit you slightly better.
2. You can sign up to a scheme online which you pay a certain amount of money for other people to mine Bitcoins for you. There are plenty of them available now. This allows someone who doesnt have a “super-computer” make them. You just need to make sure that you choose the right company, and not one that is going to close shop overnight.
3. You purchase them flat out. You can exchange them, just like any other currency, in several different markets. This is where they can be converted to USD. You can also either pay cash or receive them in exchange for certain goods or services over the internet, as well as the physical bitcoin ATM that takes cash and puts it into your wallet at the current exchange rate.

Bitcoins are stored in special online accounts called wallets. I suppose the simplest way to think of it is like using Paypal, although you can only store Bitcoins and not any other ‘normal’ type of currency.

So, where can you spend them? Well, a ton of places actually accept Bitcoin payments. You may be surprised at just how many do when searching for a retailer. In fact, I bought the keyboard I am typing with now with less than 1 bitcoin.  In some cases you may be able to do a bit of shopping, in some cases you can use it to buy things in games, and some stock brokers are even allowing the use of Bitcoin when you play. What you do need to remember though is that Bitcoin is an incredibly volatile ‘currency’. It is handy to use in some cases (i.e. in the case of gambling) but you do need to be aware that the price of it could rise drastically or it could fall as well (it does both quite great regularity) so do be aware of the current price before you use it. In some cases it may just be easier to use cash.

Their value changes daily, and can be traded as a commodity just like any other currency. At the time of this report 1 bitcoin is worth $736 and has increased by thousands of percents over the last 2 years. Investors leverage this exchange and have made millions already, and there is really no end in site. Of course when talking about economy and money, things change, but it currently looks a lot like this is the new worlds digital currency for keeps. Nothing even close, has gone so far in such a short time.

Relevant Websites:

bitcoin.org – information about the currency and how it works.

en.wikipedia.org/wiki/Bitcoin – technical information and history

blockchain.info – a trusted wallet

Convert and Exchange (BIT – USD) – coinbase.com