Wednesday, November 27, 2013

Mind's Eye Re: Bitcoin

Dear members.
I am happy to see that we seem to be back to our normal running mode. 
I was shocked to see that Bitcoin is at present trading for 1 BTC = $890.00. 3 years ago it traded for 1 BTC = $0.05.
What do you make of that? Has anything in the past gone up in value so fast? Does it point to the eventual demise of the dollar? Is it because people are hording it? Is it because of the world situation with some countries trying to get off the dollar and the petro dollar as the world currency?   Is it because the BTC has such promise to break away from the control of the banksters? Does anyone in this group use Bitcoin?  Other than buying drugs and giving donations, I do not see much use for it in Switzerland. Nor is it well known here. I hear that in other countries, it is used for buying more things. 

I made an addition to my previous video "Bitcoin - Simplified" called "Bitcoin wallets". I invite you to watch it and comment on it.

The link to my video is below:

The text for those that prefer text only is below.

Bitcoin wallets

In order to send and receive Bitcoin (BTC), a BTC wallet must be used. Each wallet acts like a letterbox, having a public address so that anyone can send and insert Bitcoins into it and a private key to access, remove or send any of the Bitcoins it holds. BTCn addresses and private keys are strings of numbers and letters like "175tWpb8K1S7NmH4Zx6rewF9WQrcZv245W" or QR matrix bar codes of the strings. A BTC wallet is a free open source program called a "BTC client" that generates public addresses and private keys. They come in a variety of forms, from mobile wallet apps for mobile devices, software wallets like "Multibit" for computers and web wallets available at sites like or  Just like email, all wallets can interoperate with each other.

Mobile wallets allow you to bring Bitcoin with you in your pocket. You can exchange coins easily and pay in physical stores by scanning a QR code or using Near Field Communication Technology (NFC) for "tap to pay" ease. Software wallets are installed on your computer. They give you complete control over your wallet. You are responsible for protecting your money and doing backups. Web wallets allow you to use Bitcoin anywhere with less effort to protect your wallet. However, you must choose your web wallet with care as they host your Bitcoins. The public addresses and private keys of wallets can be stored on a memory stick or printed out on paper so that the wallet can be recovered if the phones or computers fail or get lost, or the web sites are shut down.

Once you have a BTC wallet, there are 2 ways to fill it with Bitcoins; mining and buying. Mining involves running a BTC Mining program on your computer that records all BTC transactions in the BTC peer to peer (P2P) network. Your computer becomes a bookkeeper that keeps a ledger of all transactions that are relayed to you and that you relay to every other BTC miner. At the same time each miner works on solving a very difficult puzzle that can only be solved heuristically by trying various solutions at rarndom. Like a lottery, someone has to eventually hit on the solution by chance. If you are the first to solve this puzzle, then the ledger of the transactions you recorded must be accepted by every other miner and you get rewarded with new Bitcoins generated. This can be compared to mining for gold and being lucky to find some. An easier and much quicker way to acquire Bitcoins is buying some. You must register at a commercial Bitcoin exchange, like,, or where you can send a money transfer from your bank to buy or sell Bitcoins.

Bitcoins are traded on the free markets. 3 years ago, 1 BTC was worth $0.05 USD. At present, Nov 26 2013, 1 BTC is worth $890.00.   To keep your Bitcoins safe, spread them out over different wallets by generating a new wallet for each transaction. If you have your wallet stored on your computer or mobile phone, make sure to keep the software up-to-date. Follow general internet safety protocols like not downloading anything you don't trust, using a virus checker, and choosing passwords that are at least 13 characters long with a mixture of upper and lower case letters, numbers and symbols. Always create a paper wallet - a paper print out of your wallet`s address and private key. If you lose your private key, you will not be able to access your Bitcoins and will lose them. If you lose your public key, you will not be able to receive any Bitcoins. Treat the print out of your wallet just like cash - if your BTC wallet contains a great deal of Bitcoins, then keep your print out in a fireproof safe or a bank security box.

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