What is Bitcoin
Bitcoin is a virtual currency created in 2009 by a person, or group of people, calling himself/herself/themselves Satoshi Nakamoto .
Who SatoshiNakamoto is, or are, is still the topic of a lot of debate as no one has ever come forward to saythey’re the actual human being who created Bitcoin. But one thing for sure is Satoshi Nakamoto is a cryptographic genius.
As a digital currency you would think it would be easy to generate fake Bitcoins or spend the same Bitcoin twice. Not so thanks to Nakamoto’s cryptography.Every Bitcoin created has a cryptographically generated 64-digit address. Each Bitcoin also has public key and a private key that unlocks its Cryptographically generated addresses. Bitcoin addresses are collectively known as a “wallet”and hold all your Bitcoins. In order to spend your Bitcoins their address must be verified using the public and private keys by a series of decentralized servers (laptops, desktops,dedicated servers, and, increasingly,smartphones) all over the planet.
Because of the advanced cryptography, theverification of these Bitcoin wallets by decentralized servers (known as mining) is a very processor-intensive and time-consuming task.But it also adds a layer of security and confidence in this digital currency. Bitcoin servers are connected via peer-to-peer networks, much like torrent networks, so no centralized server exists.
What is a Bitcoin worth and where can I
spend them?
Right now, Bitcoin will make you rich—if you got in early. Back in 2009 a man bought 5,000 Bitcoins for £15 and forgot he had them until news of the currency started exploding earlier this year. He ended up selling those 5000 Bitcoins a few months ago for £430,000.
Yeah, I want a time machine too.Bitcoin has been on a wild ride this year. The price exploded to $1800 a Bitcoin on some markets in May. At the time everyone thought that was huge But Bitcoin prices fluctuate wildly, and if you buy them on an exchange and get in at the wrong time, you can lose a ton of money. However,
many now believe the value of Bitcoins can
soar
ten to a hundred times their current price.
At first you could only spend Bitcoins on
random
websites—or on the “dark web” where you can
buy all kinds of illegal things. But as Bitcoin
has
risen in prominence, now major websites like
Reddit, WordPress, Baidu and several retailers
are
taking the currency.
How do people get Bitcoins?
You can buy them, or you can mine them.
Mining
will get your free Bitcoins as rewards for using
your hardware to calculate the complex
mathematical problem resulting in a 64-digit
answer that is required to verify a Bitcoin is
legitimate. For every algorithm you solve you
are
awarded a block of 50 Bitcoins.
But there’s a catch, the difficulty of mining (ie:
the algorithms that need solving) are
automatically adjusted to make them more or
less difficult so that only 50 new Bitcoins are
created every ten minutes. This means that
the
more people that try to mine, the harder it is
to
get Bitcoins (in other words, more processing
power is needed to crack advanced math
problems). This helps keep the currency
valuable.
Generating Bitcoins is called “mining” because,
like mining precious metals in the earth, there
is
only a set number of Bitcoins that can ever be
created—21 million. Right now about 11 million
Bitcoins exist, which means only another 10
million can be mined. But if you get even a
handful of those ten million, with prices as
they
are now, you can make enough of it to live on
for
years…or even the rest of your life.
If you do want to skip mining and just buy
Bitcoins, you can do so on one of the many
Bitcoin exchanges where you can use physical
currency to purchase someone else’s Bitcoins.
The biggest Bitcoin currency exchange is Mt.
Gox.
Android apps for mining Bitcoins
Okay, so say you want to mine Bitcoins. The
best
way to do it then by setting up a really sweet
PC-rig
with the fastest processor, most RAM, and
best
video card you can. All this power will help
your
computer calculate the algorithms that will
generate the 64-digit code needed to verify
Bitcoin transactions. Each time you solve an
algorithm, 50 Bitcoins are yours.
Recently, there have also been some Android
apps that help you mine Bitcoins. There’s even
been a few Bitcoin mining apps that snuck into
Apple’s App Store, though the company quickly
pulled them.
But, as I said, the thing about mining Bitcoins
is
that it is a very hardware-intensive task; so
unless you have the most recent, cutting-edge
Android phone, don’t expect to get far. Also,
keep
in mind the energy requirements needed to
keep
your Android powered while running these
mining
apps. That’s why dedicated PCs or servers are
often the best options.
Still, if you do want to give Bitcoin mining a try
on your Android, there are a number of apps
you
could check out. As always with any Android
app,
use these at your own risk as Google does not
verify the safety or security of Android apps on
its
Play Store.
I’ve asked around to my Bitcoin mining friends
and they say these three apps are the best:
DroidMiner BTC/LTC Miner – This is a pretty
barebones app that lets you mine Bitcoins in
the
Getwork pool. Pools are collections of miners
working together to mine Bitcoins and split the
profits.
Easy Miner – Another pool mining app. This
one
has a little better UI, showing you charts for
Bitcoin prices and network hashing rates.
LTCMiner – This app, currently in beta, allows
you to mine with the Litecoin pool, one of the
more popular Bitcoin mining pools. The app
has
little to offer besides network settings, but it’s
worth it for the Litecoin pool support.
Again, keep in mind that, until Android
hardware
gets much, much faster, you aren’t going to be
mining a lot of Bitcoins with these apps. For
example, after 8 hours of mining on one of the
above apps, my friend only made 0.0005
Bitcoins.
Still, Bitcoin could be a valid contender for the
future of currency. If you can get started
mining
them today, who knows what your stash could
be
worth in a few years? You could be the next
Nathan Mayer Rothschild!
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