How real is the virtual currency?
Is there such a thing as a Bitcoin, that you can hold and toss around? No, there is no heads or tails on a Bitcoin. It is what is known as a “virtual” currency, meaning that it exists on the Internet, with that existence created and maintained by a network of computers. That doesn’t mean that it has a value that comes and goes with the wind.
When you’ve got tens of thousands of users, and over five million transactions taking place in a period of one year, you have something that is very, very real. Bitcoins may not be coins, per se, but they can be used to buy and sell products and services around the world. And there are not only curiosity seekers but true believers getting on board every day to see what this new and exciting world has to offer.
Some of them are into “Bitcoin mining,” which involves the quest to create and acquire Bitcoins. You see, though it is indeed possible to purchase them at an online exchange, Bitcoins can also be “discovered” just like gold can. To get into many of the technical specifics may be too confusing, but there are very sophisticated computations that can be made with the aid of specially-designed Bitcoin hardware and software, and if the “miner” can solve a computer “problem” the right way, and has a little luck too (which doesn’t hurt), the successful mining of Botcoins can indeed be the result.
Yes, we mention having a little luck, and that is something anyone familiar with this process will make very clear. There is an aspect to Bitcoin mining that resembles the Gold Rush that took place in California back in the mid-1800’s, in that although their is something of a correlation between the amount of effort one puts in and the amount of success one can have, there is also the cold, hard fact that one has to also be in the right place at the right time. This is one of the factors that makes Bitcoin mining such an intriguing pursuit.
Although Bitcoin transactions are anonymous by nature, they are all recorded, and frankly, that is for everyone’s protection. There is a “ledger” where all the transactions appear, and that is viewable by all the computers, or “nodes,” that are part of the network at any given time. This is the backbone that gives Bitcoins much legitimacy and exists as a safeguard against fraud. Since these entries in the ledger are permanent and not edited, no one is going to get away with the double-spending of coins.
And that’s a very good thing indeed.