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A New Kind of Money

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Posted on Aug 3, 2011
Flickr / zcopley

For the past two years, a new kind of digital currency has been gaining in popularity. Bitcoin is used to make supposedly anonymous direct transactions between buyers and sellers of goods and services online all over the world, without the oversight of regulators or the mediation of banks, and can be exchanged for traditional currencies. Organizations like WikiLeaks use Bitcoin to accept donations.

To learn more about Bitcoin, click through to its official site. —ARK

AlterNet:

Founded in 2009 from a self-published 2008 white paper by developer Satoshi Nakamoto, whose actual identity still remains a mystery, bitcoin’s peer-to-peer virtual currency has gone viral, from WikiLeaks to Google and beyond. It’s a fascinating experiment in economic evolution, where goods and services can be exchanged using an opensourced mobile currency mostly outside the reach of regulators, speculators and central bankers. There are over six million in existence, pegged between $14-$17 per unit—although their actual price can fluctuate wildly in a given day—with a tentative cap of 21 million. Bitcoins are stored in a digital wallet, and can be used in any country to barter with a massive and growing list of sites that accept them.

Here’s how it works: A public peer-to-peer transaction ledger, called a block chain, is stored on every computer running bitcoin and records every transaction ever made. The ledger weighs hundreds of megabytes in size, and is validated every 10 minutes by a computer working to secure the network, called a bitcoin miner, which wraps blocks of broadcasted message transactions in cryptographic hash functions. Transactions are entirely public, while those who transact are nearly private. The result? An emergent digital economy for the iGeneration.

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Gabriel's avatar

By Gabriel, August 4, 2011 at 10:57 pm Link to this comment

@Rob
Oh I get it, more than u know. Problem throughout history is and has been a capped or limited money supply. Doesn’t matter how many times you divide it it’s still only so much. This gives anyone with power or scam to control said limited supply.

Anon part: user has the choice to give out their private info or not. This makes it as close to anon as it can be.
Unless someone figures out how to backtrack a user this is a pretty good part of system.

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By Marian Griffith, August 4, 2011 at 11:05 am Link to this comment
(Unregistered commenter)

From what little I understand if you try to expand bitcoin to unlimited amounts you run into the same kind of troubles we have with our current monetary system. You have a monetary supply that is infinitely expandable and you lose the relation between currency and value that you have with Bitcoin.

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By dacoinminster, August 4, 2011 at 10:25 am Link to this comment
(Unregistered commenter)

There are still a lot of security issues to be worked out, but I believe that bitcoins are going to change the world. I recommend that everyone read up about them. If you are interested in buying/selling bitcoins, I personally use and? recommend TradeHill - they have lower? fees than the main exchange (mtgox), and their website seems more professional IMHO.

Also,? I have a code that will get you 10% off trading fees there for life: TH-R1168

Enjoy!

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By Rob Lister, August 4, 2011 at 7:43 am Link to this comment
(Unregistered commenter)

Dear Gabriel
Just to correct a few misconceptions you may have, Bitcoin is not technically anonymous.  At best it is pseudo-anonymous.  Every coin and any part thereof can be directly traced through every wallet that held it back to the day it was created. For example, Suppose you bought a Widget from Bill’s Widget Sales Extravaganza.  Bill ships the widget to you.  Bill’s wallet is public.  There’s a record of that transaction.  To know where you live I need only ask Bill.  Get it?  Also, the 21 million Bitcoin limit is really not an issue.  Coins are divisible to eight decimal places.

Dear Don’t believe it:
You could be right about the Bitcoin market.  It could be pump and dump.  You’re clearly interested because you’re tracking the charts.  You therefore know that if you had bought at $8 yesterday, you could sell today at $10.  smile  I believe it is certainly overpriced at $10.  It looks and acts like a bubble.  I might buy at $5.

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Gabriel's avatar

By Gabriel, August 3, 2011 at 9:19 pm Link to this comment

I like it. Only drawback is it’s 21M limit. Is why I don’t love it.

Someone come up with limitless anon currency for everyone to replace present fiat currency and good bye rip-off bankers and NWO

@Don’t believe it, August 3 at 12:15 pm
it doesn’t matter if it drops to 1 cent. It’s still anonymous, that’s what matters most.

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By Don't believe it, August 3, 2011 at 12:15 pm Link to this comment
(Unregistered commenter)

Don’t believe this story.  It’s all part of a pump and
dump scheme.  Bitcoin has been crashing $1/day from $13
the entire past week.  It’s now down around $8 and
falling.

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