Bitcoin

Bitcoin is a new virtual currency designed by programmer Satoshi Nakamoto and released in 2009. The internet was abuzz after it's release and the virtual currency quickly gained a high value and continues to do so today. Although Bitcoin is primarily virtual, physical ones do exist. The virtual Bitcoins are nothing more than a number that is tied to a Bitcoin address. Since this is a new currency, it can be a little frightening to attempt to make an investment into it. Those early adopters have however made themselves a lot richer by doing so.

Projected Bitcoin mining in millions

So how do you go about acquiring Bitcoin? You will need to find a Bitcoin exchange site and go from there. The oldest running one is Mt.Gox and is very reliable. You can easily sell and buy bitcoin from there. There are of course many other alternatives and its simply a matter of research and preference. You can study the average of the Bitcoin value on these websites, so when the prices are low and when they are high. Bitcoin is pretty much like the stock market or any other currency really, its price can fluctuate but it remains to be a high value investment. Even if the price is high for one Bitcoin, you don't have to actually spend hundreds or a thousand dollars to own one, you can simply own a share of a coin.

You may also attempt to do some Bitcoin mining. This isn't for your average everyday person. To mine for Bitcoins means you need  to have some serious hardware dedicated for mining alone. Corporations are starting up slowly with extremely high end machines working on these. For one person it is more feasible to join a pool. This means your pc and other people's pc's are working together, trying to solve algorithms to create a new Bitcoin. Bitcoins are awarded by 50 at a time, and if you are mining alone, you will probably never be awarded a Bitcoin unless you are extremely lucky. Some Bitcoin mining machines can cost up to $13000.00, way more than what an average person is willing to get into. 

Bitcoin price chart on Mt.Gox

So why the hate from the government and fear of Bitcoin? For one, it's a virtual currency that isn't minted by the government and they have no control over it. Big banks also aren't very fond of this new currency since they have no way of getting their hands on your money. JPMorgan recently had a patent released to the public that shows they have been working on a Bitcoin killer and its safe to say other banks are going to attempt the same thing. The US Government accepts Bitcoins as legal money but still has their doubts to its validity and safety. Since Bitcoin is completely anonymous, you can't be tracked with it. This was a headache for law enforcement and the government with the SilkRoad, Bitcoins were used to buy drugs and also used for many other illegal activities. The IRS also has a keen interest in Bitcoin for obvious reasons, but so far will be unable to do anything.

A security concern for Bitcoin is the fact that is all online. Mt.Gox has been hit with DDoS attack along with other exchange websites. Some places have also been the victim of online theft, forcing the exchanges to return money to investors and then shut the doors on their exchange rate. The Financial Crimes Enforcement Network have also stepped in, requiring Bitcoin business to provide authorities with information on Bitcoin payments that could have been used for illegal activities. It also requires Bitcoin miners to be more open with their activities in such a competitive market. After the SilkRoad, many agencies and the public were very skeptical about the legitimacy of Bitcoin. Not only could drugs be bought, money laundering was an issue as well as assassins for hire. With no way to track who spent the money and who recieved it, FinCEN wanted to put pressure on business that operated in the United States and have some transparncy for the public and authorities.

Bitcoin is a banker's worst fear and can be a treasury department's worst nightmare. A lot of that fear is simply because of their lack of control. For some people, their fear of Bitcoin is a legitimate one. What happens if there is another DDoS attack on their exchange site and find out the prices crash? Or another online theft? Much like playing the stock market, Bitcoin is a gamble but so far it's paid off quite well for all of it's early adopters. Before investing, it would be wise to watch the markets, download some apps on your phone or tablet to monitor it and make your own decisions. If you don't like or trust it, tough luck though. Bitcoin is obviously here to stay.