Bitcoins.

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Bitcoins.

Postby ColoradoChris » Sat Sep 24, 2011 1:53 am

This is interesting. Not sure how many of you all have heard of this or are familiar with how it works. I've been researching it for a presentation and I am torn on my decision with this one. It's basically generating an anonymous e-currency (or buying Bitcoins to spend/trade) and bypassing transaction fees you would normally pay via traditional forms of payment like Paypal. No single bank/government is in control of its circulation. Much of it is very new to me. The whole P2P nature of this system definitely has some weaknesses but I suppose it could be a viable alternative.

The PDF here is short and sweet if you're curious about the details: makeuseof.com/pages/download-virtual-currency-the-bitcoin-manual

It isn't something I would invest too much in at this point. I guess we'll see where it goes. :mrgreen:

Thoughts? Experiences? Do share!
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Re: Bitcoins.

Postby AlphaCentauri » Sat Sep 24, 2011 8:49 am

I haven't had a chance to read it yet, but my initial impression is that without a controlling agency like a government, who enforces rules to control theft and fraud, and who controls the supply to prevent hyperinflation? There is a reason that US dollars are used in a lot of countries in preference to their own currency -- it's not that easy to issue a currency and have it have any value.
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Re: Bitcoins.

Postby AlphaCentauri » Sun Sep 25, 2011 3:04 pm

Looking at some third party sources: There are transaction fees paid to speed up the confirmation of transactions. They are paid to owners of computers on the network who allow their computers to devote processing power to doing the confirmation calculations, which amount to brute forcing a code. These computer calculations are called "mining" and generate bitcoins for the owners. The early adopters were paid much more for their contributions than people joining now receive. The exchange rate for bitcoins is highly variable and can be manipulated by hackers breaking into bitcoin exchanges and stealing deposits (going from one penny to fifteen dollars within a few minutes, for instance). Botnets are being created to capture computing resources to mine bitcoins.

Doesn't sound very scalable to me.
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