Dear Crabby, What is Bitcoin?

Dear Crabby, What is Bitcoin?

Sincerely, Molly Money

Dear Molly,

Bitcoin is digital currency. It is not something you can touch, roll around in, or put under your mattress. There is no bank, no government, no fees and it works on idea of faith. Just like the dollar, there is no real value, you just trust it’s worth something. Bitcoins can be used to purchase goods and services online. It’s traded online, that’s where you can buy it. For the most part, right now, it’s a commodity that is bought and sold (buy low, sell high is the game).

Another way to get Bitcoins is to “mine” for them. People can use their computers to solve complex math puzzles and questions. Winners receive Bitcoins. But it takes a lot of energy, produces a lot of heat, and runs up your electric bill. All successful “mining” operations require a lot of proof-checking with the Bitcoin community to make sure you’ve done the puzzle correctly. Bitcoins are then stored in a digital wallet IDs. All transactions are private – you can remain anonymous – so don’t lose your electronic key or the money will be lost.

Dear Crabby sits infront of his laptop

Dear Crabby Gives Advice

They say there is a limit of 21 million Bitcoins and all the mining should be completed by 2140. Some call it a Ponzi Scheme or Pyramid Scheme. The value of Bitcoin can vary moment-to-moment. Up or down $1,000 is normal. Again, as long as people have faith is the platform, Bitcoin will be worth something. And more and more investors and scooping up the crypto-currency with the use of high-end mining computers.

In some cases, people have lost their keys and thus lost the ability to access their account, and since their is no personal data, the money is lost forever. Also, Bitcoin holders were getting hacked and people would lose everything in their account. However, now they use some super, duper system where it’s near impossible to break-in and steal their Bitcoins. But it complex to use and understand – so I won’t bother – let’s just say it’s tricky, but safer.

You can spend your Bitcoins at Overstock.com, Expedia.com, Subway or even with Mircrosoft. The Government is still trying to find a way to regulate this new currency, but even with 14 million users, it won’t be too big of a deal for you and I.

Invest in Bitcoin is you want to, me, I plan on keeping my mattress stuffed with dead presidents.

Sincerely, Dear Crabby

  • Facebook
  • Twitter
  • Google Plus
  • LinkedIn
  • Pinterest
About Dear Crabby

Stuck in a rut? Need some biased advice from a crabby old baby-boomer? Read regularly by thousands and loved by some, Dear Crabby answers questions weekly to life's challenges. Send him a note at DearCrabby@rochestermedia.com.

Speak Your Mind

*