BITCOIN I – An Overview


Bitcoin is an exciting new currency that many tech-savvy people and other early adopters are investing in as the future of monetary exchange. Granted there are dozens of places on the web that you can find that will explain to you the rudimentary basics of bitcoin but I will attempt to show you a little bit more and perhaps show you where to look next.

Courtesy of Bitcoin.org, the home of bitcoin found [HERE].

“Bitcoin is one of the first implementations of a concept called crypto-currency, which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.”

So basically bitcoin is money, just like the pound or the dollar. It has a symbol ฿ (BTC) to the dollars $ and the pounds £. In the US you can buy bitcoins at many exchanges and here in the UK we have Intersango.com [HERE]. This company is based in London and acts as a currency exchange to facilitate the acquisition of bitcoins. They charge small fees but they are negligible.

You will need to download a bitcoin client; this will be your digital wallet and also keeps a complete record of the entire transactional history of bitcoin. This is how bitcoin maintains security without a central regulating body. Every transaction processed from one bitcoin address to another is recorded and encoded into the blockchain which you download a complete copy of and store. If anyone tries to dispute a transaction, it can be seen from any terminal anywhere in the world. No need for a bank to investigate.

Weusecoins.com [HERE] is a great place to continue to learn more about bitcoin. If you are interested I would strongly suggest heading over there before you start getting yourself set up.

Obviously like any currency the value fluctuates based on standard supply demand models. You can view the charts for various exchanges and currency trade combinations on bitcoincharts.com. The Intersango GBP price over the last 9 months can be seen [HERE]. You can also view live updates of transactions and the latest blocks on the blockchain [HERE] on blockchain.info.

To keep up to date with news regarding new development in bitcoin you can look to a few sources. Firstly you have a quite in-depth financial blog over at bitcoinmoney.com [HERE]. You also have a more informal blog at bitcoin.me [HERE]. You can follow @cryptocoinmedia on twitter to get recent updates. The main forums on the net for bitcoin are hosted at bitcointalk.org [HERE]

I bought my first ฿10 from Intersango. I used the Lloyds online banking system to transfer money into my deposit account. I then used the Intersango exchange to purchase my bitcoins at about £3.05/BTC. I transferred them to my wallet, and left them there for a short while. I used them to subscribe to the bitcoin magazine. The bitcoin magazine is the first dedicated periodical to the bitcoin currency. There website is available [HERE] and subscriptions can be purchased in either dollars or bitcoin [HERE]. You are helping the bitcoin economy by purchasing in BTC though.

[Fig.1] The first Issue of bitcoin magazine. Click the image to go to the magazine’s homepage.

Issue 1 of the magazine arrived two days ago and I must say I am very impressed with it. I initially subscribed for three months but I intend to not only extend my subscription but buy bulk copies of Issue 1 to give to friends and local libraries. I have also printed out a few copies of the weekly bitcoin information newsletter, found [HERE] and deposited them wherever I can.

Well I hope that this overview of the consumer side of bitcoin has helped pool a few different resources for your ease and understanding. In subsequent posts I will delve deeper into some of the more complex implications/aspects of the currency.

If you enjoyed this please use the sidebar to follow this blog or follow @scientificmoust on twitter to keep up to date with the latest posts. Also make sure you check out the rest of the journal if this is your first visit.

Regards

John

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2 comments

  1. Patrick Levell · · Reply

    Reblogged this on All Things Bitcoin and commented:
    Good video…

  2. […] Last weekend I had the pleasure of attending the second annual Bitcoin Convention at the Royal National Hotel, Russell Gardens. For those of you who do not know what bitcoin is I shall refer you to the previous post I made explaining the subject [HERE]. […]

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