What is Bitcoin?

I keep seeing the word Bitcoin come up in the media and on website. What is this Bitcoin thing all about?

Bitcoin is a peer-to-peer digital currency that functions without the intermediation of a central authority. It has been called a cryptocurrency because it is decentralized and uses cryptography to control transactions and prevent double-spending, a problem for digital currencies. Once validated, every individual transaction is permanently recorded in a public ledger known as the blockchain. Payment processing is done by a network of private computers often specially tailored to this task. The operators of these computers, known as “miners”, are rewarded with transaction fees and newly minted Bitcoins.

Here’s a video that explains it:

So, how can you get in the game? Well, you can buy some dedicated hardware and start crunching numbers; however, the cost of the hardware needed and power for your rig would outweigh the value of any bitcoin you can generate. The other option is to join a scheme that lets you contribute computer time for a group reward. You can see one of these in action by clicking on this link.

By the way, the synopsis above is actually taken from the Wikipedia entry on Bitcoin. It’s great how you can find anything you want on the web, like hitting Reeds.com for Citizen watches or just trawling Wikipedia for the information you need. Love the web!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.