Hey everybody! We have a very special announcement this episode. The Good Guys have released a Christmas Album! The album goes live today anywhere you usually buy digital music. Find us on iTunes, Amazon, Google Play, or CDBaby. The name of the album is “A Very G.G.T.K. Christmas”. Enjoy!
Bitcoin is all over the news lately. I decided to take a deep dive into what this thing is and try to figure out how it works. Bitcoin is one of a handful of new (since 2008) cryptocurrencies. These are digital currencies that are spent, controlled, produced, and validated using encrypted data methods to keep things secure and traceable. Anyone in the world with a computer has access to these things, and vendors are starting to adopt them and accept them as form of payment as it becomes more popular. The recent hype is mostly about the price fluctuation, Bitcoin is a currency, after all, and has a price strongly rooted in supply and demand. Since the currency is newer, there is less volume of trading, so each transaction actually has an impact on the price, at least to a much larger degree than the US Dollar, for instance.
One of the more interesting aspects to the Bitcoin system is what is called mining. As you may know, the amount of currency in a market can have some serious impact. Without a central bank or authority to print money out of thin air, there has to be a way to allow more currency to be generated in a similar way to how hard currencies like gold and silver can be mined. The mining process is where the math and computer science gets a bit out of control. A proof-of-work system is set up within Bitcoin to allow people with some extra computing power to contribute to the Bitcoin network and validate transactions. By cooperating and validating these transactions, people are rewarded with new Bitcoins, which can be a lucrative process if you are successful.
For the rest of us without an extra supercomputer sitting in the basement, Bitcoin is proving to be a fast and easy way to pay for goods and services, without having to send a cut to a middleman like a bank or clearinghouse. Merchants need not send 8% of the sale to a credit card company as a processing fee. The currency is decentralized and has very little overhead, so there is no need to pay exorbitant fees for any of the transactions. To set up a digital bit coin wallet, and find an online exchange where you can trade your US Dollar, Euro, or whatever you’ve got in your bank account for Bitcoins, start at the Bitcoin website (http://bitcoin.org).
Thanks for listening everybody – check out that Christmas Album!