Cryptocurrency

What is cryptocurrency? Here’s a copy/paste from Wikipedia:

A cryptocurrency is a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself

Now the one that started it all is Bitcoin.

The premise behind it is that it offers a medium of exchange that’s instantaneous and is “simple” to use. You have a digital wallet that you install on your hard drive that you can receive bitcoins and send bitcoins. Online exchanges will then offer to exchange your bitcoins into another currency of your choice, depending on what the exchange offers – for a fee of course.

With most currency, you have to generate it somehow right? Well, instead of printing cash, cryptocurrency are instead generated by “mining” them. Mining, not going too far into the details, basically means using your computer hardware to basically chip away at “blocks”. Once a block is “solved” the people that participated in this block get rewarded with a certain amount of whatever type of cryptocurrency.

Bitcoin uses a very tough encryption, SHA-256, which means mining takes a very, very long time and is impractical. As such, many offshoots have sprung up that opt for less powerful encryption algorithms.

Going back to the practical usage of Bitcoins… well.. there’s actually not many.

You can use it to.. buy a flight to space!

Or you can… buy electronics!

But honestly the number of merchants is extremely limited.. so why the heck is the price so… high?

The price of BTC has been hovering around almost 1,000$ USD for a while now, capping at almost 1,400 a while ago. Why is this?

Well, it all comes down to wild speculation, especially on the part of the Chinese.

With their newfound wealth, Chinese investors have been looking at so many different ways of making more money than they will ever need. The gap is ridiculously huge in China, and speculation has driven prices of BTC from only 10$ a few years ago to its obscene price now.

So why should you care?

Well, let me tell you about another smaller cryptocurrency that’s gaining traction with speculators right now in China – LiteCoin. Just two weeks ago, they were only 4$, now, they’re 30$ and rising. It could be another bubble, but it’s very easy to take advantage of if you have a desktop computer. Mining LTC is very easy, and doesn’t take much time.

Well. I guess most of you don’t have the rigs to do it.

Oh well.

Just a little insight into cryptocurrency and bitcoins, in case anyone was interested.

If you’re interested in mining, check out this thread here. Very easy to follow, except if you have an AMD card it’s fine to install the latest catalyst 13.11 beta drivers. They work just as well.

And if you have say a 7950, just a single card can yield maybe 500kH/s (this is without fiddling with any hardware settings), which for our sake and purpose is just a mining speed. If you don’t pay utilities, and exchange it for 30$ a ltc for example, on standard difficulty for 30 days that yields about 7.68 ltc which 30*7.68 is about 230$ a month, assuming no further speculation occurs that drives the price even higher.

Granted, it can all come crashing down, in which case you’re effectively paying for electricity.

So what that means is, if you live in a dorm where utilities are included, take advantage and mine whenever you’re not using your computer. At least you recoup some of that cost.