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Bitcoin Research, Part One

What is Bitcoin?bitcoin

Bitcoin is an Internet currency. It was created in 2009 by Satoshi Nakamoto. It can be used in the same anonymous manner as cash, for the exchange of goods and services. There are several currency exchanges around the globe where Bitcoin can be bought & sold. Since inception, Bitcoin has increased in value from $0.005 to $32.00 US, last May. At present, 1 Bitcoin = $5.25 US or $4.99 CAD.

Bitcoin uses public key encryption, which is part of the technology that makes it work and gives it value.

How Do I Use Bitcoin?

First, you need a Bitcoin wallet. The wallet can be installed on your Windows, Mac, or Linux PC, just like a piece of software. Wallets are also available for smartphones and as web-apps. The web apps require no software to be installed, but offer less security.

Your public key is your Bitcoin “address”. To send Bitcoin to another person, you simply use your Bitcoin wallet to send X amount of Bitcoins to another Bitcoin address. To receive Bitcoin, you simply give your Bitcoin “address” to someone, so they can send you Bitcoin. The Bitcoin network processes these send & receive transactions within 10 minutes.

Is Bitcoin Secure?

Yes, Bitcoin is built on security. All transactions on the Bitcoin network are broadcast to all users. This is done to ensure that Bitcoins are not spent a second time, while transactions are being processed. If a discrepancy is detected, all computers on the Bitcoin network are notified.

Where Can I Spend Bitcoin?

bitcoin-accepted

At the moment, there are about 650 vendors that accept Bitcoin, including some sellers on eBay. You can also pay for odd jobs with Bitcoin. To date, there aren’t a lot of off-line places where Bitcoin is accepted. This seems to be an inherent weakness, due to the “techies” who built the system, but it is changing. As dissatisfaction with traditional banking grows, so does interest in Bitcoin.

How Can I Earn Bitcoin?

You can earn Bitcoin by donating computer time to the Bitcoin network. This is done by installing a Bitcoin “mining” program on your computer, thus becoming part of the Bitcoin peer-to-pear network.

Bitcoin Mining? Like Mining for Gold?

In many ways, yes. Processing Bitcoin blocks is called Bitcoin mining. Bitcoins are created after so many blocks are processed. There are currently ~8.8 million Bitcoins, with a total value of $45 million (US). There is a built-in system limit of about 21 million bitcoins.

How Does the Bitcoin Technology Work?

Bitcoin transactions are grouped into “blocks”. Each “block” has a timestamp that ties it to the previous block of transactions. Collectively, these are called a “block chain”. The computers on the Bitcoin network race to process each block. When six computers successfully process a block, the transactions in that block are declared complete.

Finally! A Ubuntu System!

Last November, I purchased a Mac mini, so that I could start learning to program iPhones, while waiting to go back to my regular job. After only a few weeks with my new Mac, I was hooked. In the last six months, I have only turned my Windows laptop on so that I could migrate files to my new Mac & DroboFS.

A few months ago, I was fixing a friend’s sick PC. In our attempts to resuscitate the computer, we tried running Ubuntu, from a thumb drive. I was pleasantly surprised to see how much the Ubuntu Desktop looks like the Mac OS X Lion desktop. In fact, a lot of Ubuntu’s features look a lot like the Mac OS X. This was a pleasant surprise.

My History with Unix/Linux-based Machines

When I was working on Unix/QNX systems, it was still from the command-line. The world of graphical user interfaces (GUIs) was still in it’s infancy. (I was learning how to program sprites, at the time!) I was an avid reader of UnixWorld magazine, and followed developments at Xerox and SPARC, as well as the latest GUIs, like X-Windows.

I kept up with Steve Jobs, the NeXT cube, and the NeXT OS. I was impressed. In high school, I wanted nothing more than to have my own NeXT cube with Adobe PS screen & printer, but they cost $10,000 in the late 80s, and I was working part-time for $3.15 an hour.

Motivation to Move to Ubuntu

But, I digress… My Windows laptop is an HP ProBook 4720s. By most counts, it is a nice piece of hardware. When I considered how much I liked my Mac, AND how much it looks like Ubuntu, AND the fact that the Drobo is a Linux box, AND Apple had just broken their DAARP protocol, which meant I couldn’t use my band-new DroboFS as an iTunes server, like I had intended, I was ready to for something new.

I found a web-site that walks you through the process of creating a bootable USB pen drive for installing Ubuntu. The first time that I booted my HP laptop from the USB Ubuntu drive, it worked like a charm. I installed Chrome, and surfed the ‘net for a few hours. It hasn’t worked, since.

I would love to blame Microsoft for this, since I left the USB pen drive attached when I re-booted back into Windows, and subsequent Ubuntu boots from the pen drive have simply frozen.

Let the adventure begin!

I recently purchased a refurbished laptop for a bargan. So far, I’ve installed Ubuntu Linux 12.04 LTS, along with Real Studio, for software development.