I must admit, I really haven't paid much attention to the whole BitCoin subject. Chances are, I might have remained "blissfully" ignorant, except for the fact that I subscribe to the digital edition of The Boston Herald, which had this article today.
Full story from the link above: (Also, if you're interested, there's a video at the link above from Forbes.com, where one person spent a week living on nothing but BitCoins, as well as interviews with several individuals and businesses who use BitCoin.)
You’re going to be hearing a lot about a new form of currency called bitcoin. It exists thanks to the power of computing. But unlike the dollar or the yen, it’s not backed by any government.
Weirder still, no one seems to know who created it.
Bitcoin’s fervent supporters and detractors all agree on a few points: It’s ingenious, bizarre and extremely risky. I realized bitcoins were on the cusp of the mainstream last month, when my favorite food delivery site, Boston-based Foodler, began accepting them. Indeed, the blogging site WordPress and the dating site OKCupid are among a growing list of bitcoin-friendly businesses. Here’s a primer for this brave new world of web currency:
What is a bitcoin? It’s a virtual medium of exchange, of fluctuating value, produced by software, mainly — but not always — offered and managed by Internet vendors. It is used mostly to buy goods and services on the Internet. But it is also possible to buy lunch or pay a bar tab with your bitcoinage.
How was bitcoin invented? Around the time of the global economic collapse in 2008, one or more anonymous software developing geniuses wrote a complex program that would control the creation of bitcoins, protected by cryptography.
How is a bitcoin made? The U.S. Treasury prints dollars. Bitcoins are created by a software program that runs insanely complex math problems, and occasionally produces a bitcoin as the result — making them rare and hard to acquire, much like gold. You can download that program at bitcoin.org and hope for the best — it’s aptly called bitcoin mining because chances of your computer striking bitcoin gold are very slim — or you can buy them on the open market.
How is it used? There are bitcoin currency exchanges, the most popular of which is called Mount Gox, which processes more than 70 percent of the world’s $1.4 billion bitcoin transactions and is owned by Tokyo-based Tibanne Ltd. You can buy a bitcoin from an online seller. Your bitcoins and a log of transactions are stored in a virtual wallet that can be downloaded to a smartphone or computer. Goods and services can be bought and sold in fractions of bitcoins.
What is the appeal? Proponents like bitcoin for two big reasons: There is no authority governing them, and because users can transact directly without use of a wire transfer. Think Western Union.
What are the risks? Bitcoin is volatile, unpredictable and uninsured. In just months, the value has jumped from $1 to $30 and back down to single digits. Yesterday it stood at $133. Mount Gox has faced cyber attacks. Lastly, losing a bitcoin wallet. If you lose your login information, for example — is like leaving a briefcase of cash on a park bench. It will never appear in the secretary of state’s lost property ads.
How do I feel about BitCoin, now that I have at least somewhat of an idea after reading the article? Meh.