Weekend Reading: Everything You Need to Know About Bitcoin

Yesterday’s media frenzy surrounding the identity of bitcoin’s creator brought the virtual currency to new levels of attention. The elusive currency — which is now finding its way into everyday transactions — has certainly captivated the world. But what exactly is it? How did it start and how does it work? Why is it getting so much attention? And is this a bitcoin bubble, or is bitcoin here to stay?

Here’s what you need to know:

Bitcoin 101

This deck by Maps of the World covers everything you need to know about bitcoin, from what it actually is (a form of decentralized electronic money) to how it’s traded, purchased and more. It also looks at the history and future of the currency.

The Trends, Challenges and Opportunities

Digital currency site CoinDesk analyzes bitcoin’s trends, challenges and opportunities. Did you know the total number of merchants accepting bitcoin recently tripled to more than 3,000?

How Bitcoin Affects Your Business

There are now bitcoin ATMs, and homes are being sold for bitcoin. Should your business start accepting the currency? This deck looks at how bitcoin may affect you and your business:

Creative Commons License
Bitcoin Art by BTC Keychain is licensed under a Creative Commons Attribution 4.0 International License.
Based on a work at http://www.flickr.com/photos/100239928@N08/10906274725/.

  • llozano

    I may be dense but I read the presentations and still don’t know what Bitcoin is. It reminds me of a telemarketer trying to sell me something I don’t need or want.

  • Tom Gronke

    One discussion I read made an impression – realize there is Bitcoin the currency (or commodity, or possible fraud depending on your opinion), and bitcoin the ecosystem.

    Bitcoin, the currency, shares traits with existing currencies:
    –It has no inherent value and depends on the trust of others and the ability to easily trade the currency for goods and services.
    –It has a relatively stable supply, so a large amount of currency cannot suddenly appear or disappear from the overall supply.
    –It is entirely electronic. The majority of US Dollars in circulation are bookkeeping entries in banks and national reserves, not physical currency.

    bitcoin, the ecosystem, appears to be the interesting part that is bringing interest.
    –It’s a way to exchange value directly between individuals without involving existing banks, payment vendors like Visa and MasterCard, or national governments.
    –Since it’s directly between individuals, this means payments can made as fast as communications across the internet, without any 3-to-5-day transaction closing time you encounter today with electronic payments to or from your bank. It also can be done for practically no cost (if directly between indiividuals) or by new payment vendors likely to charge less than the 2% to 5% that payments vendors like Visa charge merchants for accepting a Visa credit card
    –it distributes the task of tracking payments and authenticity of Bitcoins to worldwide participants, which should make it difficult for the supply or value to be manipulated like existing currencies and also place it beyond control of any government.

    The recent failures of some Bitcoin exchanges highlight risks of this currency, and why some people consider it more like a commodity (or something worse)
    –The algorithm for creating new Bitcoins limits the maximum number of Bitcoins that can ever be created. As demand increases with little or no increase in supply, Bitcoin’s price in other currencies rises dramatically. The ironic effect is fewer Bitcoins are used in exchange for goods and services, and more are hoarded in anticipation of increase in value. I believe economists call this a deflationary spiral.
    –With almost no regulation, it’s hard for outsiders to distinguish a well-run Bitcoin exchange company from a poorly-run or a totally fradulent company. Unless you are creating your own Bitcoins (which is becoming increasingly difficult without purchasing specialized equipment), Bitcoin exchange companies are your main entry for using the Bitcoin currency.
    –With the totally electronic and instant peer-to-peer transaction model, a Bitcoin exchange can be bankrupted in a matter of minutes. If your electronic wallet is breached, you can similarly be robbed in minutes.

  • Phyl

    If you really want to know what a bitcoin is watch this:
    https://www.youtube.com/watch?v=HYSEwwOt_ic&list=PLfLtedKjGtQE7sk5CNWXiDhXsQBqkHFH8

    seriously, watch this!

  • http://www.coindesk.com/ Keith Horwood
  • George Violaris

    Simply put it is money gone digital. If you check out the wikipedia entry, it has pretty much all you need to know to start using it, if you want. Nobody’s trying to sell you anything.

  • Alfonso

    A question. Can you work and get Bit Coins???

  • Alfonso

    And what about hackers???