Top Five Things to Know About Bitcoins

Author:     Tuesday, February 11, 2014 12:00 AM

The saga of the bitcoin−a digital currency−continues to fascinate everyone from investors, federal regulators and the public around the world. With its power of offering completely anonymous transactions, as well as the fact that the bitcoin "lives" digitally on the Internet and in hard drives, savvy Internet users and financial experts have followed the Bitcoin's oingoing trends since its inception in 2009.
Since this digital currency continues to insinuate itself into the mainstream, there are many things that the general pubic can learn to find out how the bitcoin might prove valuable. The top five things to know about bitcoins might shed some light for anyone who wants to dig deeper into this transcation proposition that continues to gain steam.
1. Store Bitcoins in a Digital Wallet. Anyone who invests in, and uses, bitcoins will keep this currency in a digital wallet, which is kept either at a specific website that caters to the currency or to a personal hard drive. Bitcoin investors can open and keep as many wallets as they choose.
2. Purchasing Patterns Might Decrease Anonymity. While bitcoin users do not have to provide identification when using the currency, there is a running record of every bitcoin transaction. Given that the bitcoin is digital in nature, it makes sense that there is the digital equivalent of a paper trail that helps identify users, if someone is looking for such patterns.
3. Buying Bitcoins Continues to Become Easier All the Time. People acquire bitcoins through performing tasks. There is a limited supply of bitcoins, similar to traditional currency, so people need to buy and earn it so it retains its value. Similar to peer-to-peer and file sharing, those seeking this currency can purchase bitcoins on the open market. bitcoin-specific ATMs are becoming increasingly available, and people can use these machines and pay cash for bitcoins.
4. Millions of People Are Already Using the Bitcoin. With 10.71 bitcoins in circulation, which works out to more than $207 million U.S. dollars.
5. Savvy Miners Can Mint Bitcoins.Bitcoins have generated a new mining industry, which uses a special type of software designed to mint this digital currency and make a profit. Using a computer that can work through complex algorithms, miners can earn up to 50 bitcoins each time they come across a block in the chain of the bitcoin network.

Source: BFI