A bitcoin is a consensus network that enables payments with digital money. There is no central authority or middleman, payments are made person-to-person. In simple terms a bitcoin is pretty much cash for the internet.
Many businesses are even using it these days such as restaurants, law firms and online services such as WordPress and Reddit! (frequently asked questions, 2014) https://bitcoin.org/en/faq
The creators of bitcoins decided a finite number of bitcoins would ever exist, this number is 21million. Currently there are over 12 million in circulation, which means there are less than 9 million to still be discovered. At the current rate the last bitcoins is estimated to be discovered in the year 2140. Since it was created back in 2009 bitcoins have skyrocketed, and at the end of August 2013 the value of the bitcoins in circulation was over $1.5 billion.
Now the question of how does one ‘discover’ a bitcoin
First a person has to get a virtual wallet to store the bitcoins that are earned. This wallet essentially acts a persons encrypted online bank account. After this one can start mining for bitcoins. Mining is the term used for people who are trying to discover new bitcoins. The weirdest part is a person can discover for example, 1/8th of a bitcoin! (beginners guide to mning bitcoins, N.D) http://startbitcoin.com/
A person mines for bitcoins by downloading or buying hardware that will mine for you. But it can cost more in power than you get in return from bitcoins, this is because the system was set so bitcoins were easy to mine in the beginning and get harder as we approach the 21mllionth bitcoin. This means currently faster hardware has to be used to mine for the bitcoins and the free online bitcoin miners are pretty much useless. New hardware is being created that will have the capability of mining bitcoins on its own at a much faster rate…..the current ballpark price for this hardware $12,000. (beginners guide to mning bitcoins, N.D) http://startbitcoin.com/
Most people now join a pool, this will give a person better odds of discovering new bitcoins. A pool is a group of people that combine their computing power to make more bitcoins.
But just like most things on the internet though the wallets holding a persons discovered bitcoins can be hacked since they are unregulated. Last year hackers stole about $1.2milion worth of bitcoin currency from a particular site, and the problem with bitcoins is once they are lost or stolen they are gone forever. This s because bitcoins are like cash so with no central banking backing up your bicoins there is no way to recover your loses. (Gewirtz, 2014) http://www.zdnet.com/want-to-make-money-mining-bitcoins-criminals-have-you-beat-7000025361/
There are also other ways to recieve bitcoins such as buying them or getting paid in bitcoins in return for a product or service. Even an exchange has the potential to discover new bitcoins!
I’m sure this is probably all confusing, even I’m still trying to figure the whole thing out and I have now read plenty of articles on it. There is also so much more to it then what you just read I could go on for days but that would probably get boring and very confusing. Below are some of the better articles that will help give a more in depth detail on the subject. This just goes to show how literally everything can be done on the internet and in this may be the way of the future.
http://startbitcoin.com/
https://bitcoin.org/en/faq
http://www.zdnet.com/want-to-make-money-mining-bitcoins-criminals-have-you-beat-7000025361/
Bibliography
beginners guide to mning bitcoins. (N.D). Retrieved March 28, 2014, from start bitcoin: http://startbitcoin.com/
frequently asked questions. (2014). Retrieved March 28, 2014, from Bitcoin: https://bitcoin.org/en/faq
Gewirtz, D. (2014, January 21). Want to make money mining bitcoins? Criminals have you beat. Retrieved March 28, 2014, from ZDnet: http://www.zdnet.com/want-to-make-money-mining-bitcoins-criminals-have-you-beat-7000025361/
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