I first read about Bitcoin a number of years ago, and was intrigued. I scanned Satoshi Nakamoto's initial whitepaper that kicked it all off, and looked into the burgeoning scene emerging around Bitcoin mining - generating the proof-of-work required to discover a particular hash value to generate a new valid coin by expending CPU power and electricity. Back then there wasn't much you could do with a Bitcoin other than transfer to a small but growing number of other willing individuals. But I thought it was interesting enough to have potential, and obviously plenty of other people did too.
Unfortunately I never took the next step to actually set up a miner. In those days it would have been feasible for me to do it with an old PC with a new graphic processer thrown in. In hindsight, this could have been a pretty profitable exercise. Many of those who got in early and persisted seem to have done quite well for themselves (which has led some to compare Bitcoin to a ponzi scheme, although this is an innacurate comparison).
These days to solo mine, or even contribute to a pool mine, you apparently need a whole lot of Application Specify Integrated Circuit (ASIC) or Field Programmable Gate Array (FPGA) devices and a cheap power source to make it worthwhile. This is because the network automatically adjusts the difficulty of mining to maintain a steady pace. Only 21 million Bitcoins will be created, so far nearly 12 million are in circulation and mathematically, with the value of coins per generated block decreasing at a steady rate, it is expected the last Bitcoin would be created in 2140 (if the whole scheme hasn't been hacked or regulated out of existence by then, or replaced by competitive P2P digital currencies).
So I don't really have the time or hardware geekery required to get involved in mining (though it is interesting to me the way Bitcoin mining is driving innovation in power-efficient number crunching rigs - something that might have spin-off implications for cryptography and other areas).
But I am interested in experimenting with Bitcoin, to give me some context for all these news stories about innovative exchange start-ups, buying real-estate in China or donating to US political parties with the trendy digital currency. So that leaves me to install some wallets - MultiBit on my PC and Bitcoin Wallet on my Android phone. All set up, I've got my unique address ID and QR code ready to go. Now I guess I should just buy a Bitcoin from somewhere. How's the exchange rate tracking?
Oh.
1 BTC= $AUD460, up 187% from $160 just one month ago.
Looks like I'm late to the party again.
