Maybe you can’t afford high-tech ASICs and video cards, or maybe you subscribe to the old-timey idea of the only work worth doing is doing with your hands, like a 49′er headed to California in the 19th century, but either way you’ve still got options — this guy shows you how to mine Bitcoin with a pencil and paper. The demonstration is most useful as a demonstration of the cryptocurrency process, but if you’ve got a lot of time, you might just end up with a bitcoin in your pocket.
The IRS has released a decision about what Bitcoins are: they say virtual currency is property, not money, and will be treated as such. The upside? If you make money off Bitcoins, it’s taxed as capital gains, not income. So, lower tax rate for anybody who actually totals up and claims their Bitcoin profits when they’re converted to dollars. This is how Al Capone would get sent to Alcatraz in the 21st century.
Just imagine, if you will, what the world would have thought if Bitcoins emerged during the early internet childhood of the internet: it would probably look something like this.
A group of…somebody? has decided to create the cryptocurrency Auroracoin and give some to everyone in Iceland out of the goodness of their hearts. It’s 50% pre-mined, and no exchanges are trading it at the moment, but it’s got a lot of “good” press at the moment. If you’d like to start mining it, to be ahead of the curve, pools are just starting to accept connections.
Based on evaluating the market cap of Bitcoin, it looks like current Bitcoin values are purely due to speculators, and not due to demand or spending. Via.
Bitcoins screwing up your finances? These guys have a new cryptocurrency for you.
It used to be you could mine bitcoins with a PC, but as competition has grown it takes a bit more coin to mine them. This facility is being built in Hong Kong, in hopes of mining enough Bitcoins to pay for all the equipment.
A cosmetic surgeon in Miami has its pricelist online, in a variety of denominations of international currency – including Bitcoin.
You’ve probably heard of Bitcoins before, but even with a close understanding of how encryption works and the idea of wallet chains that tracks, but yet doesn’t track, the Bitcoin, it’s all a ‘bit’ confusing. Because a Bitcoin is little more than, well, bits on the internet, there’s nothing physical to hold in your hand, jingle in your pocket, or get in a birthday card from Grandma. Well, maybe in an eCard, but that’s a pretty sophisticated Grandma if she’s sending you fifty bitcoins in an eCard for your birthday.
Old-school Grandma can now send you bitcoins in the real-world now, too: a handful of hackers have developed a bitcoin change machine, built into a suitcase. They brought it with to DefCon as a fun toy, but they ended up sparking quite a bit of interest.
The BitCoin Briefcase lets you insert regular coins, and then prints out the proper value in BitCoins as a QR Code. It sorta sounds like the reverse of the laundromat coin changer, but there’s something even more similar out there. You know those Coinstar coin counting machines, sitting over by the distilled water dispenser and Stanley Steemer display at the grocery store? Nearly every one can dispense giftcards, and some can even convert pocketchange to PayPal balances.
So, BitCoin might not seem all that innovative, especially when you compare the fact that, with ECH and online bill pay, most people never see a dollar sign on paper ever. But, let’s go back to a BitCoin’s existence.
A BitCoin is a small sequence of characters, which represent a certain value of BitCoins, which exists and is verified to have value by the BitCoin mining process. The mining process is essentially a mathematical process, and not one based in regulation or law. As such, once a BitCoin exists it is about as individual an object as a metal coin. Your dollars may get sent to PayPal, but they exist in PayPal only as long as PayPal chooses to acknowledge they’re there and allow you to have access to it. Stealing, devaluing, or counterfeiting a BitCoin is inherently difficult, if not impossible.
So, let’s go back to the BitCoin Briefcase: they’re doing something one better than CoinStar. A CoinStar funds a debit account with a business, and the status of your balance is at the whim of the business’ discretion, the agreement you made in funding your account, and any applicable laws. A BitCoin, however, is permanent, immutable. Its value might change, but so does gold; an ounce of gold is still an ounce of gold. So, a BitCoin is still a BitCoin whether stored on a computer or printed out as a QR code, but a “dollar” on an Amazon giftcard is a bit fuzzier. The BitCoin Briefcase might be a fun toy, but it’s a demonstration of something that a dollar isn’t. Even if you convert a BitCoin from one form to another, in theory, it does retain its inherent value as a BitCoin.
Amazon has officiallly launched its own micropayment currency, called Amazon Coin. Currently, one ‘coin’ is worth a penny, which makes it somewhat simple for calculating the exchange rate. It is designed for buying digital content for the Kindle, from books to apps, and customers buy or earn Amazon Coin in order to load their account.
With a name like “Amazon Coin”, there’s sure to be comparison to the BitCoin phenomenon, but they’re nothing alike. Getting an Amazon Coin will be akin to sticking a $10 into the arcade token machine and getting forty brass tokens to stick into the pinball machine. A Coin is worth one hundredth of a dollar; when the dollar fluctuates, so will the Amazon Coin. Calling it a ‘coin’ is a bit of a misnomer; in the business world, internet currencies are “tokens” or “coupons”; only governments make coins. But, whatever symantics Amazon thinks having online coins will avoid scrutiny from governmental entities is their own problem.
So why even call a “Coin” something different? Why not just call them Amazon Gift Cards – which are already a thing, a way to get your money into Amazon in bulk to use for smaller transactions. One thing about it being a “Coin” is that it becomes a purchase transaction, rather than a gift card which is increasingly regulated as persistent storage for money. I’ll bet that there will come a day when app developers and participation in the Mechanical Turk will have the option of being paid in Amazon Coins. This makes Amazon a barter-world: you do work that earns Amazon real money, and in payment you get tokens to spend at the Amazon store. Sounds a bit like company scrip, don’t it? Scrip isn’t horrible, as long as it isn’t misused. Amazon isn’t dumb enough to require all transactions to be made with the same virtual money system, but if they did they wouldn’t be the first to try and restrict payment options.
The other benefit for Amazon, aside from giving free Coins when buying the tokens, they can just hand them out willy-nilly without using coupon codes or other odd redemption processes. If you own a Kindle Fire, you’re getting $5 in Amazon Coin just for free, to encourage the use of the system. Go ahead and spend them, but be careful when converting your dollars into Amazon Coin: be aware of what you’re getting for your money, like any other product you might buy.