As some of you know, Bitcoins are the new cryptocurrency currently sweeping the planet.
People are touting this as the end of government-controlled currencies, and yes, it does seem like something that’s really cool, but is it the end of money as we know it? That we have no need for government-controlled currencies?
No, I don’t think it’s the end of the Euro, Dollar, Yen, or whatever. An example of this can be found on Mt. Gox, the main Bitcoin exchange site. They list several currency exchange rates. Currently, the US Dollar is worth around $125 per bitcoin.
Sounds great, right? Well, yes, but…
The Bitcoin isn’t like the US Dollar where you have two decimal places of currency, like $0.00.
The Bitcoin goes to eight decimal places, so it’s 0.00000000.
To make this explanation easy, let’s imagine that one bitcoin (1.00000000) is worth $100 USD. So then we can say with certainty that….
0.1 BTC is ten dollars
0.01 BTC is one dollar
0.001 BTC is ten cent
0.0001 is one cent
Anything beyond that is pretty hard to communicate in terms of USD.
Okay, so, now, I have 0.00369536 BTC.
In our example, that would be $0.37 cent.
Over the past few days, I’ve been working off and on on a few “get bitcoins here” sites, most of which give 0.00000020 or less.
Oddly, even Crowdflower has programs that pay in BTC, but not a whole lot, like above. And yes, most of the BTC I’ve earned came from a few things they offered. Now, what’s odd, is that Crowdflower also offers small assignments via Amazon’s Turk program, where some things might pay 1 to 8 cent or so per task.
That eight cent would be 0.0008 BTC. So compare that to the 37 cent I’ve earned so far, and you see that by using those programs is a humongous waste of time since the ability to get up to the top three rungs of BTC will take far longer than just earning regular money.
Crowdflower also gets to pay out far smaller amounts than if the payout was in a recognized currency, such as USD.
So then, how to get BTC?
Apparently you can mine for it using computer hardware, but of course, my computer is too old and slow to be able to mine, either solo or as a group mining effort. The “mining” is essentially making your computer crunch numbers in an effort to uncover and decode new blocks of BTC data.
There was an article on Boingboing a few days ago where a guy who joined a joint mining group wrote about it. He earned more money from ads attached to his blog post about mining than he did mining for the week after he wrote it.
Another way is to do work in exchange for BTC. But of course, the problem with that is you’re paid in BTC, not USD, and 99.9999999999% of companies only accept money in USD right now. And because of that, I can’t put gas in my car with BTC or buy groceries with it either.
I liken the Bitcoin as almost a real-world version of the Darknet Credits from Daemon and Freedom (books by Daniel Suarez), or even World of Warcraft Gold. They have their uses, but so far too few people use them. Of course, as I’ve read many times over, it’s still the early days and there’s still plenty of coins to mine.
Of course, who knows where BTC will go. The price jumps around so much. At one point, 1 BTC was worth $10, then it shot up to $240, and is now around $125.
Just looking at the exchanges and stuff on blockchain.info is enough to get anyone wanting to jump on the bandwagon.