Tag Archives: bitcoin

Bitcoin 101

Here’s a nice primer on Bitcoin from BoingBoing:

Bitcoin is a peer-to-peer network, a set of protocols (standards for interoperability), client interfaces (called wallets) and a currency that operates on top of all of those technologies. The bitcoin system allows any person to send or receive a fraction of a bitcoin (the currency unit) to another person, anywhere in the world. The bitcoin system operates on the Internet without the need for banks or bank accounts and allows people to send money like they send email.

To start using bitcoin, you need a bitcoin client, or “wallet” application. The bitcoin client allows you to use the bitcoin network, just like a web browser allows you to use the web. There are many different types and makers of bitcoin wallets, for desktop and mobile operating systems and also available as web applications. To receive bitcoin, you need a bitcoin “address”, which is a bit like an email address or bank account number. If someone knows your bitcoin address, they can send you money, but cannot do anything more, not even identify who you are or where you are. Therefore, you can freely share your bitcoin addresses with anyone without fear or security risk. Once you have a “wallet,” it can create any number of bitcoin addresses for you, even one per transaction. Give those addresses to anyone you want to send you bitcoin. Tip: bitcoin addresses are created by your wallet and do not need to be registered with anyone, or linked to your identity or email address. They can be used immediately to receive money from anyone and become part of the network once they have some bitcoin sent to them. Bitcoin addresses always start with the number “1” and they look like a long string of number. One of my bitcoin addresses is “1andreas3batLhQa2FawWjeyjCqyBzypd”. This is known as a vanity address, because it has my name in the beginning, but it works just the same as if it was a long string of random letters and numbers. I use it to receive tips and donations from people all around the world.

The remainder of the article explains the entire process, including how to pay for things using bitcoins, tips on securing your bitcoin keys, how to find vendors that accept bitcoins, etc.

Dad, Have You Heard of Bitcoin?

My wife and I were driving our son to school on the way to work and in the middle of the trip he asked, “Dad, have you heard of Bitcoin?” I think he was surprised and maybe even a little impressed that I had. I know for a fact that I was VERY impressed that he had. What ensued for the remaining few minutes of the ride was a discussion of bitcoin and a fumbling attempt by both me and my son to describe to my wife what it was. That’s when I realized I only vaguely understood how it might work. How fortuitous, then, that I found this article in today’s Wall Street Journal about Dish Network accepting Bitcoins for payment:

Bitcoin took another step toward mainstream recognition as satellite-TV provider Dish Network Corp. DISH -1.38% will become the largest company yet known to accept payments in the digital currency.

The move shows the resilience of the currency after a string of scandals and regulatory actions raised doubts about bitcoin’s future. The collapse of a major trading exchange helped lead bitcoin to lose two-thirds of its value in four months, but its price has rallied 27% over the past week. Coindesk’s Bitcoin Price Index was quoted at $565.55 at late afternoon in New York…

Dish said it will use Coinbase, a San Francisco-based bitcoin-payment processor, to process the payments, using that firm’s Instant Exchange feature. That means that although its customers will transfer bitcoins through an online facility, Coinbase will absorb the digital currency and remit dollars to Dish.