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All About Bitcoin: Digital Currency for the Economic Future

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According to economists, if Bitcoins become a widely accepted currency, each one could be worth $524,000
According to economists, if Bitcoins become a widely accepted currency, each one could be worth $524,000
If you’re like many Americans, Bitcoin is something you heard someone mention on the news right before you turned to Dancing with the Stars, or maybe you heard about it from that guy in the gym, who’s a maven on all matters financial, but drives a beat up Cutlass Ciera. You may know that it’s a form of currency you can use on the computer.

Anything beyond that and you’re as lost as your ninety-year-old grandmother, trying to reset her cable box. If you’re thinking, “Leave me alone with Bitcoins already. I’ve got more important things to worry about,” worry about this: according to economists, if Bitcoins become a widely accepted currency, each one could be worth $524,000. At time of print, each bitcoin is worth $748. Is it important enough to learn about yet? Here are some quick Bitcoin facts:

What is it?

A Bitcoin is a decentralized digital currency. Unlike the dollar or Euro, it is backed by nothing more than its own ability to hold value, in the same way gold has for most of its history. Bitcoins are anonymous because they’re built upon a decentralized system. Bitcoins exist entirely on their own because there’s no central infrastructure to shut down.

How can I purchase it?

The most popular way is from digital exchanges like Coinbase or Mt. Gox (http://howtobuybitcoins.info/us.html), though at least one Vancouver ATM now trades Bitcoins for cash and vice versa.

You can also “mine” them. 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.

The Bitcoin system is decentralized and programmed to generate a fixed number of Bitcoins per unit of computing time. Currently, it’s set at 25 Bitcoins for every 10-minute block. In 2140, the total number of Bitcoins in circulation will be capped at 21 million. In other words, the Bitcoin system is self-sustaining, coded to prevent inflation, and encrypted to prevent anyone from disrupting its code.

How did it originate? In 2008, Bitcoin was first devised and outlined by the mysterious and pseudonymous developer Satoshi Nakamoto, who mined the first 50 Bitcoins from what was called The Genesis Block on Jan. 3, 2009. Bitcoin evolved as an open-source development project, where it grew from its own mining and trading, the most notorious swap being perhaps the first that occurred in “the real world” — 10,000 Bitcoins (now equivalent to $9 million) for two pizzas in May 2010.

What can you do with them?

Buy stuff…anywhere Bitcons are accepted. And they’re being accepted in a lot of places like hotels, electronic chains, barber shops and many more.

Is This Legal?

Bitcoins aren’t physical artifacts used to represent value the same way that dollar bills and coins are. The federal government is not currently worried about Bitcoin because it’s not “tender,” i.e., coins or bills that look like they’re manufactured by the government.

Want to learn more? Visit www.thejewishvoice.com for some fascinating videos about Bitcoin and how you can get them.

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