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5 Things You Need to Know About Bitcoins

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A couple of weeks ago, we weren’t really interested in bitcoins. We were convinced that they’re just a passing fad and that, eventually, the writers we follow would soon tire of churning out articles about this so-called revolutionary digital currency. Of course, we were wrong; and it’s a good thing we realized early how wrong we were or we might never have discovered some cool stuff about this newish online currency. Don’t believe us? Well, how about we give you five bitcoin facts so you can decide for yourself if it’s worth the hype or not?

#1 It is designed to be purely digital.

We don’t know about you, but when someone says ‘peso,’ we automatically think Mexico or the Philippines. It’s probably the same for the yen or the won; the first association is usually the countries that control such currencies. With a bitcoin, there is no controlling country associated with it. Sure, you can buy things with it; but you can’t go to an ATM and withdraw it like real money. Think online wallets rather than a tangible purse that can contain your wads of cash.

#2 You can buy pizza with bitcoins…

…among other things. In 2011, hotel chain Howard Johnson in Fullerton, California, started accepting bitcoins in exchange for a hotel stay. According to owner and manager of both the Howard Johnson and the Red Roof Inn in Buena Park Jefferson Kim, he would “personally like to see the BTC (bitcoin) succeed.” Other things you could buy with bitcoins include a goat on BitMit.net, guns on the Tor network, socks made from alpaca wool at GrassHillAlpacas.com, a Dominos pizza through PizzaForCoins.com, and a tiny cannon from PocketArtillery.com. Personally, we would like to know if bitcoins can be used to purchase a cloud phone (more info), especially as we are in the market for such a system in our line of business.

#3 No one knows who created it.

Perhaps one of the most fascinating things about bitcoin is that “the identity of its creator—or creators—remains one of the Internet’s great mysteries.” What is known so far is that bitcoin has been around since 2009 and that “it’s widely agreed that it emanated from an individual calling himself Satoshi Nakamoto.” However, upon further investigation, it has been revealed that “Satoshi Nakamoto” does not exist. And in fact “a worldwide guessing game has sprung up over who’s behind the Nakamoto handle.”

#4 Bitcoins can be mined.

Yes, you read that part right. You can buy bitcoins with real money, and you can also put on your prospector hat and “mine” them. How? Well, according to Business Insider:  “You do this by using your computer to hunt for 64-digit numbers. By having your computer repeatedly solve puzzles, you’re competing with other miners to generate the number that the Bitcoin network is looking for. If your computer generates it, you receive 25 Bitcoins.”

#5 Bitcoins have a market value of about $1.04 billion.

That’s based on supply and exchange rates, at least according to Bitcoincharts. Now, don’t be surprised if you think that’s a bit much for something that can’t buy a lot of things (yet) and seems to have no real value. As one blogger puts it, “Bitcoin, in its present form, has a stark resemblance to gold.” Keep in mind that gold is backed by no one and that it’s inconvenient for day to day use (except in the case of jewelry), so you’ll have to wonder why it has such a high value. For both gold and bitcoins, you need to understand that “both have value only because society has confidence that they will maintain said value over time.”

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