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Every Bit You Need to Know about Bitcoin

The transition to an increasingly digitalized work is occurring at an extremely rapid pace. One of the most prominent examples of this has been in the news a lot recently: the Bitcoin.

Before my research, all I and everybody I know seemed to know about this peculiar money system that it is completely digital with no physical substance. How a world was supposed to function on a monetary system with no physical means of payment was a question most of us couldn’t answer.

As a peer-to-peer payment system and digital currency, Bitcoin was introduced in 2009 as a cryptocurrency, because of its use of cryptography to control the creation and transfer of money. For all you non-tech gurus like myself, cryptography is the practice and study of techniques for secure communication to ensure data confidentiality, data integrity, authentication, and non-repudiation.

Transactions with bitcoins require no middlemen, thus no more bank accounts to deal with. Bitcoins can be used to cover anything from merchandise to webhosting services to even that late night Saturday pizza craving you need to satisfy. While presently the field of available things to buy remains limited, the bitcoin-purchasing world is expanding rapidly.

My next question was why exactly do we need to get rid of the money system we have now and move into the bitcoin world. Anonymity and internationality were the answers.

Bitcoin, with the use of cryptography, allows the user to act completely anonymously with no name or identity being attaching to your transaction. The bitcoin also allows for easy and cheap international payments, because the money is not tied to any country or subject to any regulations.

Without any tracing of the selling and buying back to an individual, the bitcoin allows the user to really do anything they please on the Internet with no regulation. While this could lead to illegal activity, hopefully most of us will be responsible and just keep purchases to online shopping adventures.

With the non-regulation and non-banking technique, no fees are attached to the bitcoin either, making it even more attractive for use by small businesses and individuals.

Now, how do you get bitcoins? A couple different ways allow you to acquire these little things. You can either buy on exchange, which allows you to buy them on “bitcoin exchanges” using different currencies. Or you could do it the fun way: Mining. Through this method, people compete to “mine” bitcoins using computers to solve complex math puzzles.

Currently, a winner of this online mining wins a reward of 25 bitcoins every ten minutes. When realizing that one bitcoin is equal to roughly 575 U.S.  dollars, this mining might be better than that old gold mining, and more fun!

When you gain these bitcoins, you can store them in a digital wallet that exists either in the cloud or on a user’s computer. These wallets exist as a type of virtual bank account that allows you to send or receive bitcoins for payment or saving.

As global governments are still concerned over the taxation and control over this currency, the world is still quite a ways off from adopting the use of these “coins” in everyday use. The idea that our monetary world could become this completely digitalized interface is quite exciting, though.

Just think. Eventually, you could be spending your Friday’s playing online games while watching Netflix and then using your rewards to pay for your drinks when going out that night. Seems ideal, right? Well with bitcoin, that could be in all of our futures. 

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