Bitcoins: A New Digital Gold Rush

Aug. 6, 2010 - PRLog -- Bitcoins: A New Digital Gold Rush

The California Gold Rush began in 1848 when gold was discovered at Sutter's Mill.  Hundreds of thousands of people migrated across the country to prospect for the rare yellow metal.  Mining for gold was a challenging task and there were tools that were invented to separate gold from dirt.  If a prospector could sift through more dirt he or she could find more gold and generate more money.  The prospectors used tools such as picks, shovels, pans, dry washers, riffle boards, sluice boxes, etc. that would attempt to filter dirt in high volume so more nuggets could be found.  Similarly, there is a new type of digital gold  that is mined on the Internet today and it is called a "bitcoin".  The concept of a bitcoin is very similar to the concept of gold.  For instance, mining for gold requires manual labor and time.  Comparatively, mining for bitcoins requires computational labor to generate credits.  Thousands of users on the Internet are now mining for bitcoins in hopes of fortune.  Many are trying to develop software and hardware tools to mine for bitcoins more efficiently in hopes of becoming filthy rich.

The first bitcoin rush was not started at a mill, but instead started with a Slashdot posting.  Slashdot is a technology news website that has millions of visitors.  When bitcoin was started by its creator, Satochi Nakamoto, a single bitcoin had practically no value.  When bitcoin was featured on the front page of Slashdot the price of a bitcoin multiplied by eight times.  Today the value of the bitcoin is accelerating faster than any other currency on the planet.  As more users delve into the bitcoin economy the value continues to rise and demand increases.  Savvy users are trying to mine for bitcoins at a faster rate by setting up server farms to perform intense number crunching calculations.  To generate more bitcoins programmers are optimizing code to fully utilize their computer's CPU, while some are even attempting to calculate bitcoins by using high-end graphic cards.

The key to producing bitcoins in volume is computational speed.  As of this article's writing a quad-core Intel 2.0 Ghz processor can produce 50 bitcoins in about three days.  Reportedly in online forums there are users who run 48-core machines that is capable of generating 50 bitcoins in 6 hours or less.  Others have claimed to run server farms with 300+ machines burning CPU cycles 24/7.

Like the wild, wild west in the 1800s, there are dangers when working with bitcoin in the world wide web.  Bitcoin owners need to safeguard their wealth from viruses, hackers, and scammers.  Bitcoins are stored on a user's computer so if a hacker could get access to that machine he or she could steal that user's  bitcoins.  More recently, the world's first bitcoin scam was able to trick users in giving away bitcoins for non-existent software.  Most of these scam issues, however, exist with other currencies and can be avoided with a little common sense.

The bitcoin economy is growing steadily as more users understand and accept the system.  New web services, currency exchanges, and markets are being created daily which allows easier trading of goods and services.  If bitcoin continues to grow in acceptance one can dream that it can someday become the new gold standard.  If you would like to learn more about bitcoin go to www.bitcoin.org.

In the spirit of bitcoin if you enjoyed this article then please donate to this bitcoin address: 15rMp3uAk1WJdupueHhvM6895uZv9JJW8C