Bit Coins, explain please.

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  • Bit Coins, explain please.
  • athgray
    Member

    Heard a bit about bit coins recently, from online arms and drugs markets, to some guy that sent a hard drive to the tip with £4m of bit coins. How does it all work? (Simple terms please).

    Premier Icon jimmy
    Subscriber

    its an online currency.

    athgray
    Member

    I had established jimmy, but not much more.

    Premier Icon mikewsmith
    Subscriber

    http://en.wikipedia.org/wiki/Bitcoin
    you can “mine” bitcoin by doing some complex maths processing but from what I heard a while ago the power consumption required made it less cost effective that buying.

    After that it’s a secure and fairly (as anything is) anonymous currency that is used globally without the input of banks.

    You have your secure wallet if you break that then you loose effectively.

    There is a finite amount of Bitcoin available (like gold) with the last ones being probably the most costly to extract. Once it’s all out then it’s just there to trade.

    Boba Fatt
    Member

    Have a look on wired.com, they seem to be bitcoin daft at the moment.

    Seems a bit too flakey to be honest, no real security around storage and way too easy to lose your “fortune” – I get a weird feeling like it’s some massive con that someone is going to get extremely rich off while a load more folk get ripped off

    jambourgie
    Member

    What I do know is that when I first found out about them in 2010 they were worth about £7 each. Now they’re about £500 😡

    Premier Icon jimmy
    Subscriber

    It seems a bit bonkers.

    my contractor colleague bought £30k’s worth a few month back (“easy come, easy go…”). It’s now worth ~£150k. He (a self-confessed geek) knows way too much about it, but it seems to be a bit of a bubble.

    http://www.vancouversun.com/100K+traded+through+Vancouver+Bitcoin+week+with+video/9145774/story.html

    Premier Icon wallop
    Subscriber

    I’m still none the wiser.

    jambourgie
    Member

    Well, from my limited knowledge,

    It’s a virtual currency. Only a preset number will ever be made (mined). I don’t know the exact figure, let’s say 30 million. Bitcoins can be ‘mined’ (made) by using computer power to solve complex mathematical equations. The more that are mined – the harder the equations become, the more CPU power required to ‘mine’ them, hence the value goes up (I think). As well as being susceptible to price fluctuations due to market forces, like any other currency.

    They can be bought and traded anonymously, and stored either online or locally in a Bitcoin ‘Wallet’ making them great for buying fun yet illegal things (allegedly).

    Hardly a scientific answer, and maybe a bit wrong, but that’s how I understand them.

    Premier Icon Flaperon
    Subscriber

    It’s a pyramid scheme by any other name.

    Can I buy beer & an Indian takeaway with them? Or a caravan?

    Premier Icon eddiebaby
    Subscriber
    Premier Icon mikewsmith
    Subscriber

    esselgruntfuttock – Member
    Can I buy beer & an Indian takeaway with them? Or a caravan?

    Yes, out local cafe accepts bit coin. You can purchase anything with anything the other party will accept.

    Premier Icon ourmaninthenorth
    Subscriber

    Colleague has set up a hosted mining company. Which is clever enough given he’s about 12 years old, but he’s doing it using hardware his brother’s company makes.

    Just for clarity, his brother’s business has turned over $40m in less than 2 years of trading.

    Tulips, maybe, but those who’ve got ’em have got rich. Just don;t sling out the hard drive….

    Premier Icon epicyclo
    Subscriber

    Can you buy virtue with virtual money? 🙂

    samjgeorge86
    Member

    Mining them requires very high powered hardware, using multiple GPU’s.. And yes, the power consumption outweighs the financial gain now. The trouble is, every time one is mined, it’s a block added to the string, so it’s growing and growing. The bubble will burst in the end, it has to.

    I had a few bitcoins, purchased pretty cheap at the time *£30 a piece*, and slowly started spending them. They are now worth nearly £1,000 a coin..

    Explaining them in full wouldn’t be easier. The simplest way would be to think of it like this,

    You have a “virtual wallet”, you want to put a “coin” in your wallet. Someone will give you this coin, but it will cost you “£x”, you pay you money, you get a coin. Now, you can spend this coin. There are many places to spend them.
    The beauty (if you see it this way) about BitCoins, is they are pretty anonymous, you don’t have to give real details to get a virtual wallet, and you can’t buy them using PayPal (so no trace with that). You can do it via bank transfer, and though several websites that handle the money for you (escrow) then pass it on. You don’t mention BitCoins when you buy them (all the traders I bought from asked me not to mention it, and instead claim the payment was for something else, like manuals, and crap like that).
    As the Coins just go to a virtual address, and once the block has been “mined” it moves on to the next stage in the block, and to trace where the last x amount of BitCoin transfers went the Blockchain has to be taken apart again, from what I know, that is virtually impossible, and as such, no one can tell who sent who coins… You can also have them laundered…

    That’s as much as I know anyway…..

    Premier Icon Nick
    Subscriber

    What you really wanted to know is whether you could make £4m worth of Bit Coins like the daft Welsh lad did, but this time not bin the hard drive.

    I think it’s too late, sorry.

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