The new Gold rush ? Bitcoin is going mainstream but probably most of us hardly understand this artificial unregulated electronic currency based on cryptography.
The Bitcoin Exchange – The Currency Hype:
The Price of a Bitcoin in USD:
In April 2012 the price for a bitcoin was 4.85 USD on March,28 2013 the price is at 93 USD. And on April 2nd, 2013 a Bitcoin trades at 105 USD per BTC (Bitcoin).
The volatility can be very high during a days trading. Low and heigh price can differ by as much as 20%.
Learning about the bitcoin currency – written by the inventor (only for the super geeks):
How the currency works?
“The steady addition of a constant of amount of new coins is analogeous to gold miners expanding resources to add gold to circulation. In this case, it is CPU time and electricity that is expended.”
The maximum amount of Bitcoins will be 21.5 Millionen by the year 2140. This is the mathematical boundary. At the moment it is at 10.5 Millionen BTCs. Creation of BTCs thus will constantly slow down.
Key in the setup of BTC is, that the user cannot spend the same BTC unit twice which would be like magically spending your 1 USD note twice at the same time. This setup of BTC makes it impossible to forge the currency, which is not the case for USD or other paper currencies.
Even though crypto keys are used and thus allow for some anonymity each transaction of BTC ever undertaken is stored in the so called Blockchain. Every user in the Peer to Peer Bitcoin Network has access to the blockchain. Some smart computer geeks could potentially uncover the person behind the transaction. To which destination BTC units are transmitted can be watched here live:
https://blockchain.info/de/popular-addresses. Key destination seems to be SatoshiDice – a gambling platform.
Where can I keep the electronic currency Bitcoin ?
The electronic Wallet:
You need an electronic wallet to own, trade or recieve a bitcoin or portions of a coin. But which is the best to choose from ?
In principal a wallet is a personalized url – which is the address of your wallet.
03. April. 2013: Down on security issues- no transfers are accepted.
Disucssion on the situation at Reddit.
As soon as you type instawallet.org in your browser it will create an url for your wallet. The url starts with 1 and has then over 31 characters and numbers in random order. You wallet(“account”) is now opened but with 0 BTC deposit.
There are no additional costs – it is free.
How to protect your wallet ?
Additionally you have a key that you should not share with anyone. It is recommended that you do not keep it on a computer with internet access – rather on a usb stick. Best is probably to take a screenshot and save it as a picture.
Security: Additionally you should probably delete your browsing history and use a computer with a security internet protection. Also recommended is not to create a wallet when surfing in an internet cafe.
How transfer Bitcoins – make payments ?
On instawallet.org you can also transfer Bitcoins (BTC) to anothe electronic wallet. You have to type in the url of the electronic wallet you want to make a payment to and the amount. The minimum transfer amount is 0.01 BTC (Bitcoin).
Of course you can only make payments if you have BTC in your wallet. There is no overdraft as the electronic wallet is similar in principal to a true wallet with coins and paper money.
At this address you find different type of wallets:
Web wallets (example instawallet.org),
From a security standpoint Bitcoin.org recommends Software Wallets and does not recommend web wallets at all.
Can I customize my wallet (bitcoin) url so it is easier for people to remember or help them to avoid sending the money to the wrong url ?
Yes there is also a bitcoin url generator called vanitygen. Discussed in details here:https://bitcointalk.org/index.php?topic=25804.0. Instead of using a random url you can influence the url through vanitygen to use a certain pattern of your choosing at the beginning (example: 1boat or 1USA) when the url is created. I have not seen a 32 bitcoin url that was fully customized like 1SwitzerlandPeterPalmeBitcoinUrl..
What is Bitcoin and What Can I Do with It ?