Bitcoin Mania

Back in the late 90's there was an article published called "100 things to do on the Internet before you die". I think it was originally in Wired... or some other technology orientated (printed) magazine from the period. It included a lot of activities, from making a webpage to shopping online, many of which I had done and a few things I hadn't. Over the years I've tried to jump on the bandwagon for a lot of new (financially accessible) fads like joining Twitter, posting to YouTube and Instagram. I've tried some social value sites which promise that you will learn to appreciate how socially relevant you are. I think I did that for about 10 days before calling that off. It might have been something to do with an almost instantaneous hacking of my Twitter account as soon as I linked it. So overall I somewhat potter around on the internet and technology in general. I was intrigued when the Bitcoin originally became popular on the interwebs a couple of years ago. I have been dabbling in distributed computing programs since 1998 (it was on the 100 list) and I thought that if I was writing an article today about things you need to do online before you die then mining for Bitcoins should be on it. Bitcoins are sadly misunderstood in that people don't seem to connect the mining aspect with real work, and thus the creation of worth. I tend to think of it in the same way that someone might outsource video rendering or model simulations, my computer power is being used as a resource. It's not an ideal comparison, but there are plenty of references online if you want to try to understand how currency works. I wasn't one of the first wave of miners... I came later (at the end of 2011) and I spent a little time dedicating an unused PC and video card to run the mining client. Back in those days the virtual "currency" had jumped from $15 to $30 and then back down to about $2. I wasn't seeing the mining as a money earning proposition, not at $2 a Bitcoin. However I would never have realized it was going to become worth $1000 a Bitcoin in November 2013.

Unfortunately I sold the 10 coins I mined, at a point where I thought it would pay the electric bill and recoup the cost of my video card. It's quite amazing when you dig into the trading which surrounds Bitcoin as it is global and non-stop. People have made huge money out of trading bitcoin, probably more than the miners unraveling the code to release new coins. If you are interested in seeing the live transactions then this is an interesting watch. They provide a virtual map of transaction on an animated map, a still from which is shown below.

Bitcoin currently has a mixed reputation. While Virgin Galactic says it will allow budding space tourists to purchase tickets with Bitcoin on the one hand, the FBI has shut the door on the "Silk Road" a notorious dark web store for drugs and other illegal activities. While new doors open in some countries,China has just moved to curb Bitcoin usage within in it's borders causing Bitcoin to temporarily lose about half it's value.

On thing I have noticed is that Bitcoin is almost always in the news now, if anything that gives it additional credibility. I wonder how many people have speculated by taking steps to acquire coins and are now storing them like virtual gold or silver. The media loves the stories of people getting rich or finding 100's of bitcoins on old hard drives. What will happen when the FBI dumps the 174,000 coins (or is it 144,000) it seized back in October. In November that would have been worth a staggering $174 million, now it's "only" worth about $100 million. Then you have to wonder about the new kids on the block too, such as LiteCoin. Currently the news is that there is a scarcity of AMD Radeon video cards because they are being bought up to use to mine these easier coins.

I think the next couple of years will make or break Bitcoin (and probably LiteCoin too). We'll work out if a crypto currency has legs or if it's a giant bubble waiting to burst. I've re-started a mining machine, but it's slow going now that the Bitcoins are harder to mine (by design). Currently I spend more in keeping that machine running than I can make from the percentage of a Bitcoin I earn. But it's fun to say you are involved, in the same way I have run machines for years contributing to the World Community Grid project. Should, some day in the future, a cure for cancer stem back to these kind of projects, then I will be able to say that one of my "100 things to do on the web" contributed something.