Get Ready For Bitcoin — Expect to see stories about the bitcoin in the old general media.
Online businesses are starting to use this digital currency because it dodges credit card fees and goes a long way in eliminating payment fraud.
Unlike a fiat currency such as the dollar or euro, bitcoins are mined like gold except that instead of a crusty old guy with a mule wielding a pick they are found by math geniuses using computers.
Each bitcoin transaction involves data called “blocks” each of which contain just a little bit of meaningless random information. The miners take all the data in the transaction, shuffle the random part and find a “hash” which are mathematical processes that are easy to reproduce but impossible to reverse and hard to predict. This means that it is more expensive to counterfeit them than to try to find them the right way, as counterfeiters would have to account for more data.
They are backed “exclusively by code” as per the Bitcoin Foundation.
By design there is never more than 21 million bit coins. New, more difficult to hack, hashes replace the older ones. At some point the system will stop creating new coins and the miners will be out of business.
Note, there is no government regulation or oversight.
Get Ready For Bitcoin
Doubt though you may it appears to work. Over 70 exchanges for bitcoins can now be found online. It is on these that you can get your bitcoins for buying. Merchants, of course, can simply acquire them by accepting them for goods or services.
To use bitcoins, a merchant can site up an account with an exchange such as BitPay which will convert the money to dollars and direct deposit it into the businesses bank account. It charges a processing fee starting at .99 percent which is much less than a credit card.
Prediction number 2: Expect to see governments based on fiat currency start attacking bitcoins.
Hat tip Entrepreneur magazine