Oct 1, 2012

Virtual Electronic Currency as Anonymous As Cash

Bitcoin Magazine
Bitcoin Magazine (Photo credit: zcopley)
Okay, time for a little break from all of the politics and to get back to some new and exciting technology. This time the technology we are talking about involves money. Okay, there may be some politics in this, but nothing too crazy. Mainly some references to our ridiculous Federal Reserve program.

So what am I talking about? It's a relatively new virtual currency called Bitcoin. It is a peer-to-peer based currency which means that there is no central authority like a Government, bank or clearing house controlling it. Plus it is a very REAL currency with an exchange rate, that is actually doing much better than the American dollar. In fact at the time of this writing 1 bitcoin (BTC) is worth about $12.44 according to Mt. Gox, the Internet's number one Bitcoin exchange. Here is a description from the organization that created Bitcoin:

Bitcoin is an experimental new digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bitcoin is also the name of the open source software which enables the use of this currency.

Not only that, but all transactions are anonymous. Sort of like cash except even more so because in order to send money you don't have to be there to make the transaction. You can send it electronically. Plus all transactions are protected using very high grade encryption. That means if you are worried about privacy, this might be the perfect way to use your money without a nosey Government being all up in your business.

Also, unlike other forms of electronic transactions, there are no central banks or entities that the Government can use to trace where funds go. It's nice for the privacy conscious.

Check out this video made by We Use Coins, a group who is trying to make Bitcoin easier to use and understand for beginners.:

If you want to see an example of Bitcoin in action, you can take a look at Wikileaks. If you have been living under a rock, Wikileaks is a site that provides Government and corporate whistle-blowers a means of disseminating secrets to the public. They are also currently being persecuted by the US Government for releasing an epic ton of classified Government documents.

Wikileaks is using Bitcoin as one of their methods to accept donations. One of the main reasons is because the US Government put pressure on credit card companies and Paypal to make them stop processing donations to Wikileaks. Well since no Government controls Bitcoin, they can't stop it.

I personally am not ready to convert all of my money to Bitcoin, but I am trying it out. I am using a Bitcoin mining site right now to try to generate revenue, and if things go well I may use it more. Who knows?

Do you use Bitcoin? Why are why not? Any good tips? Where are some good online stores that accept Bitcoin? Let us know in the comments!

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