Wednesday, June 5, 2013

BitCoin - The Secure, Digital Currency (of the future?)

Now, we'll admit, this one is tricky to explain. So, we'll quote Wikipedia on this one:

"Bitcoin (BTC) is a cryptocurrency first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority. Each bitcoin is subdivided down to eight decimal places, forming 100 million smaller units called satoshis Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution."

"The processing of Bitcoin transactions is secured by servers called bitcoin miners. These servers communicate over an internet-based network and confirm transactions by adding them to a ledger which is updated and archived periodically using peer-to-peer filesharing technology. In addition to archiving transactions, each new ledger update creates some newly-minted bitcoins. The number of new bitcoins created in each update is halved every 4 years until the year 2140 when this number will round down to zero. At that time no more bitcoins will be added into circulation and the total number of bitcoins will have reached a maximum of 21 million bitcoins."

"Bitcoin is accepted in trade by merchants and individuals in many parts of the world... See the whole wikipedia entry here. 

The USD price of a bitcoin increased ten-fold in early 2013 from $13 on 1 January to $190 on 9 April."

Well, don't worry, if you didn't follow everything up there - even we are trying to get our heads around this whole new stuff! But, here's a short video that takes you through some of this and hopefully makes it easier.
Will this be a kind of new trend as the global economy continues to battle one challenge after another? Guess, only time will tell...