Stanford Seminar’s YouTube Video On Bitcoin

Bitcoin is a new phenomenon for currency in general, and so people will definitely have all sorts of beliefs about it.  Obviously, some people have already thought that Bitcoin is a newest hoax yet that is out to get peoples’ money.  Some other people think Bitcoin is like a hybrid of ponzi and pyramid schemes where the ones who played with Bitcoin first would be the only ones that got all the profits and benefits, the ones who come in now are going to go broke as they will lose their money.  Some other people though think Bitcoin has the potential of becoming the global currency where there are pockets of regulations in corresponding governments, but the Bitcoin’s true values will lie with the people (hence how some people proclaim that Bitcoin is paupers’ money or poor peoples’ money).  Regardless of peoples’ different views on Bitcoin, in the end we have to wonder will Bitcoin be around for another 100 years?

My honest thought on Bitcoin is that I’m not sure Bitcoin could be around for another 100 years since someone might be able to break its’ encryption algorithm which is there to protect Bitcoin’s inherent values.  Nonetheless, I do think that paupers’ money in the electronic/digital form will be around for another 100 years and beyond unless the people of the world in whatever timeframe, beyond now, decide that they rather do business and communicate through media that aren’t Internet/digital things.  Imagine how the world will change radically when paupers’ money suddenly become the reality, because money will be changed hand much easier and globally.  Just like how the Internet had transformed commerce, information, business, retailing and whatever else that the Internet has had and will be transforming next; paupers’ money will probably transform many things on such a manner and scale.

Anyhow, I thought I would share with you guys a Stanford seminar’s YouTube video on Bitcoin.  In this video, a BTC China Bitcoin exchange’s CEO, Bobby C. Lee, shares his thoughts and beliefs on Bitcoin and the future of Bitcoin.  Anyhow, check it out right after the break!

Crypto Currencies, Bitcoin, and Quark for Newbies

Crypto currencies are on the rise. Don’t ask me why, because I don’t think I know the whole answer to this. Sure, I can make few indirect, incoherent, suggestions that may suggest why crypto currencies are on the rise, but I won’t as I know that will open up all sorts of crazy talk against me and whatever. Nonetheless, as I’m speaking, the crypto currencies such as Bitcoin and Quark are gaining in value, tremendously. How so? It’s now that 1 Bitcoin is worth around $1000 or more. Let us check out the link below and you will see that I’m not making this stuff up.

Anyhow, Quark is the newest crypto currency yet, and it is also on the rise. The developers for Bitcoin who are also developing Quark boast that Quark is even more secure than Bitcoin. How so? They suggest that Bitcoin was the very first crypto currency they had worked on, and there were many mistakes that they had made with Bitcoin. Although they weren’t the one who came up with Bitcoin and the whole idea of Bitcoin, but they were the ones who worked on Bitcoin platform to improve Bitcoin crypto currency in general. Nonetheless, the mistakes they made with Bitcoin are now being fixed by Quark. Basically, I’m not sure I understand about Bitcoin and Quark underlying technologies all that well, but what I can comprehend from their saying is that Quark is way more secure since Quark relies on more than one encryption. In fact, if I’m not wrong, Quark is relying on 6 different encryption technologies while Bitcoin is only relying on one encryption technology. With more underlying encryption technologies behind Quark, it’s much harder for people to figure out how to break Quark’s encryptions at a go, therefore it won’t be easy to bring down the whole Quark crypto currency in time. With Bitcoin, whoever knows how to break its underlying encryption technology will be able to mint Bitcoin however he or she wants. It means, he or she can be rich in Bitcoin whenever he or she wants.

Of course, my understanding of these two crypto currencies’ underlying encryption technologies are clearly limited, therefore what I’m spewing might seem to be very uneducated, regardless to Bitcoin and Quark. Nonetheless, if I’m not wrong, then what I’m saying might have some merits, therefore what I’m saying might help you scratch the surface, somewhat revealing how these crypto currencies work.

Anyhow, at this moment, crypto currencies aren’t yet clearly labeled as illegal means of attaining some sort of wealth values by any specific government. Sure, I’m not exactly knowing which government would condone or not condone the usages of the crypto currencies, but I’m seeing that the people of the world are using them as we speak. Or else how they’re becoming valuable as we speak? Of course, in the future, we won’t know which crypto currency would survive as complementary currency to the government back currencies, but as we speak there are more than one crypto currencies in play. If you check out, you will see people are trading in dozens of different crypto currencies. For me, only Bitcoin and Quark caught my eyes. Why these two? Well, Bitcoin was the very first of its kind and its value per Bitcoin has no rival as we speak. Quark on the other hand is being suggested by its developers that it’s more secure than Bitcoin and all other crypto currencies, therefore I think it might have better chance in surviving the crypto currency madness if the crypto currency venue is here to stay.

Am I supporting and condoning the usage of crypto currencies such as Bitcoin and Quark? Look guys, I’m a nobody, therefore even if I say Bitcoin and Quark and other crypto currencies are the way to go, nobody will care. Nonetheless, if you are insisting that I should make it clear, to be honest let me say I don’t have a clue. I can’t really condone or suggest that you should use these crypto currencies since I don’t have a clue. Furthermore, these crypto currencies carry risks. What risks? Let see, you never know that these crypto currencies might just be a trend of fads, therefore one day people will think them just as funny money. You know, like how you play with those funny monopoly money in the monopoly board game? Nonetheless, to be honest with you, I’m currently owning some crypto currencies. At first I owned around 0.10 of Bitcoin, and then I converted 0.10 of a Bitcoin into Quarks. Now I have a lot of Quarks.

Regardless of my supporting for crypto currencies or not, let just say that if one day the crypto currencies suddenly become useless, don’t say that I push you into believing in crypto currencies. As I had said, I’m pretty clueless about the future of crypto currencies as you are. Nonetheless, what I know is that these crypto currencies have made some people really wealthy as we speak. Furthermore, nobody knows the legal status of these crypto currencies in the future.

With the whatever I had spewed on crypto currencies, especially about Bitcoin and Quark is out of the way. Let me show you how to mine Bitcoin and attaining Quark, OK?

  • At this rate, Bitcoin is way too hard to mine, and might not be profitable at all, but if you insist, you can still mine them. Before mining Bitcoin, you must have a Bitcoin wallet first. Like the one that I’m going to open up now. (Opening up Bitcoin wallet!) — By the way, don’t download Bitcoin wallet in dangerous, unknown websites, because you might download computer viruses and malware and not of Bitcoin wallet. Please go to the official source for Bitcoin to download your Bitcoin wallet.
  • After you have a Bitcoin wallet, you can choose to create a passphrase to encrypt and protect your Bitcoin wallet and so whoever has physical access to your computer or is able to hack into your computer cannot steal your Bitcoins. Of course, once you forget the passphrase somehow, you will forever lose your Bitcoins in the Bitcoin wallet. Therefore, some people might just use the Bitcoin wallet as it is and not encrypt the Bitcoin wallet with a passphrase. It’s really up to you. Nonetheless, I chose to encrypt my Bitcoin wallet with a passphrase. (Show them how to encrypt Bitcoin wallet with a passphrase.)
  • With Bitcoin wallet in hand, you can now create a public Bitcoin address to receive Bitcoins. This means, you can also send the Bitcoins that you mine to a public Bitcoin address that you create for Bitcoin mining purpose. (Show them how to create Bitcoin’s public address with Bitcoin wallet.)
  • Now, you need a software which will allow you to mine Bitcoins. I have heard of Bitminter, bfgminer, cgminer, and guiminer. If you are so new to the mining of Bitcoins, then I think guiminer and Bitminter would be the easiest software for you to mine Bitcoins. Please, once again, look around and ask around for how to download these software safely, because if you’re downloading these Bitcoin mining software at unknown, not trustworthy sources, you might download computer viruses and malware and not of Bitcoin mining software.
  • Before you can even mine for Bitcoins with a Bitcoin mining software, you need to create an account with a Bitcoin pool. There are so many Bitcoin pools out there that you can sign up an account with. What is Bitcoin pool? Well, let just say that you can use a Bitcoin mining software to mine Bitcoin by yourself, but this may take years if not hundreds of years for you to be able to mine any Bitcoin. It’s all about Bitcoin encryption/math difficulty levels. Don’t ask me the underlying understanding of it all, because I’m pretty much clueless about the calculation of Bitcoin difficulty levels. Nonetheless, just to scratch the surface, Bitcoin difficulty levels increase by day as we speak, and to a point of a future that the difficulty levels get so high that mining for more Bitcoins would be impossible, even if you have really really powerful Bitcoin mining hardware. With Bitcoin pools, you can basically create a Bitcoin pool worker, entering the Bitcoin pool worker’s password and username into Bitcoin mining software to allow the Bitcoin mining software to mine for Bitcoin in a Bitcoin pool. This way, whatever electricity and hardware costs that you contribute to the Bitcoin pool will count toward the earning of a Bitcoin. Of course, each Bitcoin pool host will either charge a fee or not for allowing you to mine Bitcoin with a Bitcoin pool. So, you must look up for a good Bitcoin pool that is appropriate for your Bitcoin mining needs before you join such a Bitcoin pool. By the way, when the Bitcoin mining software asks for a worker’s password, it’s not a password of your Bitcoin pool’s account, but it’s a password of a Bitcoin’s pool worker that you had created. I hope that is clear enough so you won’t be entering a password of a Bitcoin pool account into a Bitcoin mining software. (Opening up Bitminter or guiminer to show how a Bitcoin mining software might work.)
  • Before to mine Bitcoin for real with a Bitcoin mining software, you need to create a Bitcoin public address. Once you have a Bitcoin public address for mining, you need to log into a Bitcoin pool’s website to add the Bitcoin public address that you had created for Bitcoin mining into your Bitcoin pool’s account. How to do this? Well, you have to look this up as each Bitcoin pool website might behave differently. Once you have linked the Bitcoin public address of your Bitcoin wallet to a Bitcoin pool’s account through the Bitcoin pool’s website, then you can begin to fire up your Bitcoin mining software to mine for Bitcoins.
  • At a current 700 million plus or so Bitcoin difficulty level (to be exact, as I’m speaking the Bitcoin difficult level is at 707,408,283), and this difficulty level will rise soon or later, mining Bitcoin with a latest, powerful graphic card will be very unwise, because you won’t be able to generate any worthy amount of hash to count toward your Bitcoin pool’s contribution, therefore you will waste a lot of in home electricity and electricity costs and yet you won’t be able to generate any worthy fraction worth of a Bitcoin. This is why many Bitcoin miners are using special Bitcoin hardware they have bought at specialized Bitcoin hardware dealers such as Butterfly Labs. Nonetheless, these specialized Bitcoin hardware are super expensive, and you might not even make enough return to cover the costs for these specialized Bitcoin hardware. The cheapest way to mine for Bitcoins is still about acquiring a specialized Bitcoin hardware known as ASICMiner Block Erupter USB 330MH/s. As you can see in the title of this specialized hardware, each ASICMiner Block Erupter can generate around 330 Mega Hash per second, and this is probably on the par with the latest, most powerful graphic card yet. It’s the cheapest solution since you can purchase them on Amazon and Ebay for around $46 to $75 bucks for each. A single latest, most powerful graphic card might cost up to $1000 per graphic card. Once you string a bunch of ASICMiner Block Erupter together on a powered USB hub, you can increase your hash rate by a lot. This way, you can generate a lot more hash contribution toward a mining pool and earn bigger fraction worth of a Bitcoin when the pool pays you for your mining effort. By the way, you must look for more information on how to use those ASICMiner Block Erupter USB thumbs with your Bitcoin mining software OK? I have heard that some suggest you have to download special driver for them if you are going to use them with bfgminer. With Bitminter, you may not have to download any special driver, but I’m not sure if it’s the case. Anyhow, things might change as we’re moving forward, and so it means the software might get develop differently and these ASICMiner Block Erupter thumbs might be outdated, therefore mining with them might not be feasible. Furthermore, the difficulty levels of Bitcoin mining might rise so high that mining with these ASICMiner Block Erupter might just be unwise. I guess it’s all depending on the situation you’re in when it comes down to mining for Bitcoin. Do what you can if you’re so into this whole idea of mining for Bitcoins, but don’t overdo anything or else you are at risk of losing money and health. So, be wise and careful. If you think this is not worthy of anything, please don’t mine for Bitcoin at all. If you don’t like or trust Bitcoin at all, stay away from this whole Bitcoin gambit OK? Just focus on your wellbeing.

Now, let me talk about Quark. To tell you the truth, I don’t know how to mine Quark at all, because I haven’t read into it enough. Nonetheless, what I have heard is that Quark is about 97% mined already, therefore you can only mine about 1% a year of Quark in total. So, I won’t talk about mining Quark, but how to get Quark. To get Quark, what I did was created an account with a crypto currency exchange known as, and then this crypto currency exchange allows me to use my Bitcoin to purchase for Quark. That is how I get to own some Quarks. Before I can even own some Quarks, it’s obviously I have to download a Quark wallet. Like before, you must be very careful of where you download these software, because you might download computer viruses and malware from unknown sources. I think I downloaded from the official source and I had use antivirus scanner to scan the Quark wallet before I think that it’s a safe software to use. Anyhow, just like how Bitcoin wallet is being used, a Quark wallet allows me to create Quark public address. With a Quark public address is made known to a crypto currency exchange, I can then withdraw my Quarks from a crypto currency exchange and store the Quarks in my Quark wallet. Of course, you can also leave your Quarks inside a crypto currency exchange account if you decide to do such a thing. Nonetheless, I prefer my Quarks to be physically near me, because I never know a crypto currency exchange might be down or go out of business. You can also use your Quark wallet to pay for whatever in Quarks just like how you would use a Bitcoin wallet. Sending Quarks to a crypto currency exchange is also requiring you to send your Quarks out of your Quark wallet to a known Quark public address that a crypto currency exchange had generated specifically for you.

In summary, crypto currencies are very intriguing, but the future of them all is still remaining to be seen. This is why I think you should approach this whole thing with care, otherwise you will be at risks of losing money and your happiness, consequentially your wellbeing. I think if you don’t trust crypto currencies at all, then you should stay away from them. Now if you want to test the water, then just play with them but not taking them too seriously. For me personally, I’m still playing around with these crypto currencies, but the two crypto currencies I interest in most are Bitcoin and Quark. I hope my talk on Bitcoin and Quark actually helps clear up some curious questions that you have about Bitcoin and Quark and crypto currencies in general.

Can Bitcoin Be Real Money?

The bitcoin logo

The bitcoin logo (Photo credit: Wikipedia)

Bitcoin is all the rage recently as value per Bitcoin has climbed really high.  As I’m writing this blog post, it’s about $866 per Bitcoin.  Furthermore, more reputable businesses are beginning to join the fun by accepting Bitcoin as payment for business transactions.  With Bitcoin is moving toward mainstream or so as people think it is doing so, we have to wonder how long will Bitcoin would shine right?

As we all know, money has to be backed by something.  Sure, money can be in various currencies, but all currencies have to be backed by something.  In the antiquity time, countries accepted all sorts of bartering items as currencies.  Nonetheless, most of those bartering items could not withstand the test of time.  Gold is one of those few bartering items that have withstood the test of time thus far.  Gold could be used as money in the antiquity time, and even today some parts of the world are still accepting gold as real money.

How can gold be so resilient against time?  For obvious reasons such as scarcity and so forth, gold cannot be seen as just another bartering item.  Scarcity is important, but gold has one more trait that is very very important.  People have often overlooked that gold has always been special throughout the globe and through time.  By special I meant since the antiquity people have found gold to be valuable and sexy.  Since the whole world is being captivated by gold since the antiquity, therefore gold cannot be easily discarded in time.

Bitcoin might have the appealing of gold if it can convince people that it too can be valuable and sexy, worldwide.  As I have mentioned earlier, money (currencies) have to be backed by something, and so we have to wonder what is backing Bitcoin, right?  I think what is backing Bitcoin is how people put Bitcoin into practice throughout the world.

Nonetheless, without a specific government endorsement, can Bitcoin last?  I think Bitcoin is special in that it’s not being bounded or controlled by a specific government, and yet the people throughout the world are willing to have faith in Bitcoin.  With that being said, if Bitcoin doesn’t have the appealing of scarcity, it would probably be just another funny money (i.e., monopoly money).

Bitcoin can be scarce since it does require tremendous amount of effort in mining it.  For an example, one has to be spending real money to buy expensive hardware before one can mine Bitcoin effectively.  One might have to mine 24/7 for months and years before one can have few Bitcoins.  Now, if one is really rich and wealthy, one can build many Bitcoin mining rigs that can churn out Bitcoin really fast.  It is all about being rich in the first place, right?  There is a saying and it might go like this, the rich get richer and the poor get poorer.

In summary, I think Bitcoin can be real money, but for how long I won’t know.  I know though that if people around the world use Bitcoin as money, then Bitcoin won’t easily be discarded.  If the whole world is using Bitcoin, then not a single country can stop Bitcoin from being used as money.  If the whole world is using Bitcoin, then politics will become less important when it comes down to currency manipulation.  Bitcoin can be traced just like how cash can be traced, but both Bitcoin and cash can be way more stealthy than most forms of currencies.  With stealth as one of its awesome traits, Bitcoin can definitely be facilitated as cash-like money.  With all of that being said, Bitcoin isn’t cash since it’s not physical.  Since Bitcoin has to be used in a digital form, it might just be inconvenient enough that some people will not want to use Bitcoin as their money.  Invention such as smartphone apps to facilitate the Bitcoin transactions might help Bitcoin to be seen as physical cash, because there are so many people who carry their smartphones around.

Can Bitcoin Overtake The World Currencies And Change World Economies?

The bitcoin logo

The bitcoin logo (Photo credit: Wikipedia)

Don’t dare to say that I know enough about Bitcoin, but it seems to me that this digital currency is on the rise.  TheVerge ‘Bitcoin exchange gains clearance to operate as a real bank in France‘ article reported that Bitcoin digital currency platform has just now gained a foothold in France.  This means, Bitcoin-Central, a Bitcoin exchange, will be able to operate as a real bank in France.  Will this mean more similar banking services derive from Bitcoin digital currency platform in France?  I clearly don’t know since the whole Bitcoin digital currency is still so new to me and probably to the majority of the people of the world.  Anyhow, it seems though France is going to go ahead and let Bitcoin rises, becoming a more reputable mean of transactions within France.

Of course, if you never heard about Bitcoin before, you probably are scratching your head right now.  For me, I have heard about Bitcoin, and I’m still scratching my head.  Bitcoin isn’t so easy to understand as how cash would be.  Cash has been around for as long as I know it.  Anyhow, Bitcoin isn’t cash, therefore people have a hard time to compare it to cash.  Bitcoin is so new, therefore people don’t really understand it.  Nonetheless, people do understand credit and credit card.  Nonetheless, credit and credit card don’t behave like cash after the credit had spent in a transaction, but Bitcoin does (I think).  How is this?  When credit has already being spent, the creditor wants the debtor to pay back the spent credit somehow; when the cash has already being spent, no creditor is expecting any compensation unless the debtor actually tied his or her credit with cash somehow and then spent such cash for whatever needs.  To the best of my knowledge, Bitcoin behaves like cash since no creditor is expecting a compensation unless there is a Bitcoin lending service that actually lends out Bitcoin (also known as BTC) as credit.  Then again, one can easily somehow acquire BTC with real cash and then crazily went into debt through credit.  So, in a sense BTC can be included in a chain of transactions with mixed types of currencies.  The question is, will people trust BTC enough to start spending like those other types of currencies (e.g., cash, credit, etc…).  Let not get into what is real currency, because I think all sorts of people will have different definitions for what to be real currency.  Is it back by gold?  Is it back by the government?  Is it back by what?  It gets crazy really.  In this very blog post and for the sake of simplicity, I like to refer currency as anything that can be spent to acquire something else and to complete a transaction in a meaningful way.  Meaningful way I said?  Yes, because such transactions have to be legal in the eyes of the mass (i.e., people).

Digital age makes Bitcoin possible, I think!  With digital age, Bitcoin can deliver its complex algorithm to encrypt and decrypt its BTC units.  Don’t ask me the technical side of this as I’m scratching my head just to think about it.  Anyhow, Bitcoin allows the owners of BTC to transact Bitcoin digitally and anonymously.  I sure don’t know how anonymous this would be though, because I’m still trying to figure out how Bitcoin actually works in practice.  I have not yet ever tried to use Bitcoin in practice, therefore I’m just amused as you are on Bitcoin (i.e., if you haven’t yet being familiarized with how Bitcoin works in practice).  On reading about Bitcoin though, I think the anonymity of Bitcoin derives from how Bitcoin is being a decentralized digital currency platform.  OK, to explain this in layman term (I might be off by a mile in explanation though), a BTC transaction would occur between the payer and the receiver and that’s it.  So, in a sense the anonymity is all about there isn’t a centralized bank to be able to track down a Bitcoin transaction.  Isn’t cash also operating similarly to this, to allow some anonymity between the payer and receiver?  If you pay someone with some cash for a transaction that nobody knows about, nobody would care right?  I guess we can safely say that all banks will simply ignore what you will do with the cash you own, but the banks will try to track down the stolen cash from their vaults though.  You get this right?  So, in a way Bitcoin is allowing this sort of anonymity to BTC owners.

Besides being a BTC owner, a BTC owner can actually mine for more BTCs.  How?  I’m still very unclear about this myself to be honest, but let me take a jab at this anyway.  Basically, I think BTC owner can execute Bitcoin command lines to command Bitcoin software to act as a server service on a computer and then mine for BTC units.  Please correct me if I’m wrong on this, I think Bitcoin software I’m talking about is the official one that is on the official Bitcoin website and this very software is also responsible for allowing Bitcoin owners to generate a Bitcoin wallet.  Bitcoin wallet?  It’s like a digital wallet where you can tuck your BTC units away just so you can use these BTC units digitally in a transaction (most likely a digital transaction too).  Nonetheless, I guess that you might be able to use Bitcoin physically in some places in France if Bitcoin-Central (Bitcoin exchange) succeeds in providing banking services through Bitcoin digital currency platform.  My apology of being digressed, let me get back to how Bitcoin owners can mine for more BTC units.  Basically, BTC units can be minted as long Bitcoin owners are willing to spend money on setting up powerful computers (e.g., servers, server networks, etc…) to mine for more BTC units.  To know more about the technical side of how each BTC unit is actually being minted, I think you have to look this up on the Internet since I don’t have a good explanation for this complex process.  Nonetheless, it boils down to the setup of hardware (i.e., computer with the ability to utilize strong processing powers of graphic cards and CPUs) and software, the computer resources, the energy that needs to be spent (i.e., electricity), and so on to get a Bitcoin mining operation going.

Obviously, acquiring BTCs through other means and not through mining for BTCs — it is all about providing services and products and then demanding BTCs as the currency of exchange/transaction.

In conclusion, I sense that if more countries follow France to approve and allow Bitcoin exchanges to behave as banks, then Bitcoin might upset how the world is using its currencies.  This scenario is possible, because Bitcoin isn’t exactly a specific currency in which a specific government has controlled over yet.  In a sense, Bitcoin is behaving like cash, but this new cash has embodied some of the Internet characteristics.  You can say, at this stage there isn’t yet a single government which can claim ownership over the entire Internet.  For better or worse, different people value Bitcoin differently, therefore Bitcoin isn’t so easily to be controlled unless all governments of the world begin to crackdown on Bitcoin usages.  I guess people who reside in France don’t have to worry about this much since Bitcoin is gaining popularity in France; if not it’s at least gaining popularity with the French government.  For the people who think Bitcoin can’t do a thing to upset the world currencies and how people will perform transactions across the world, I beg them to not underestimate Bitcoin popularity.  Just think about how the Internet has evolved, and we can somewhat make a deduction about the possibilities of Bitcoin in term of making a foothold in world currencies.  The Internet had a humbled beginning, but not for long before the Internet transformed how people shopped, read, wrote, thought, studied, communicated, banked, voted, and so much more in the late 20th century.  Obviously, the Internet is still transforming how people do things in the 21st century.  Although the Internet was new back then and was plagued with security issues, nothing had stopped the the Internet from taking over the world.  So, when I look at Bitcoin closer, I feel as if Bitcoin is behaving similarly to the Internet.  Since I’m not an economist, I can’t be sure that I know if this is a good thing or bad thing for the world economies, but I can feel that Bitcoin isn’t going away soon.  Even if Bitcoin loses steam in the future, I think Bitcoin has already paved a road in which the future generations might use Bitcoin as one of the futuristic currency scaffolds to discuss and reform their currencies.  What do you think?