Posted by on Dec 17, 2013 in Bitcoin, HeadLines | 0 comments

How cool would it be to set up your own printing press and start making real money that people are happy to take for goods and services? If that sounds too good to be true, you’re only partially correct.

The U.S. Secret Service is charged with protecting the President and the currency. It doesn’t have a sense of humor when it comes to counterfeiting Federal Reserve Notes (aka dollars), but it is happy to stand by and watch you data mine “blockchains”  — a serial number-like code used to demonstrate authenticity of bitcoins.

Since bitcoins aren’t born on paper and are math-based, computers are used to “mine” the bits, with increasingly more difficulty until all the possible combinations are found. For technical reasons that go beyond the scope of this article, you can use your computer in an attempt to mine, but your computer’s central processing unit (CPU) is probably too slow to find any.

Speed is of the essence because like any real gold rush of days gone by, it’s first-come, first-service. Miners use special faster number crunching graphics processing units (GPU) instead of CPUs to gain a speed edge. You can find many “Picks and hammer” mining sellers on eBay (EBAY_) and Amazon (AMZN_).

Before you break out your Capital One (COF_) Visa (V_) card and buy mining computers costing thousands of real dollars (along with a miners cap for good luck), keep in mind that the electrical cost of operating mining computers may exceed the value of bitcoins mined. Of course, it depends on your computing costs and the electronic currency’s value, but don’t expect to get rich if you’re just starting out now.

While some have become rich (at least for now on virtual paper) as discussed in my previous bitcoin piece, bitcoin’s greatest attraction is the ability to buy and sell products that aren’t legal. Users “think” that if they are using bitcoins as a payment method that their transactions aren’t traceable. In theory, that may have validity, but in practice, unless you’re the type that is diligent and willing to launder your bitcoins, it may be more difficult, but far from impossible. Besides, the weak link is rarely the technology, it’s the people using it.

From Here by Robert Weinstein

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