Understanding America’s dollars could come down to common “cents” – pun intended. It has been backed by the “full faith and credit” of the United States Government since 1971. That was the first time that the dollar had no gold or silver backing.
The new cryptocurrencies, including Bitcoin, are also backed essentially on faith, as these use decentralized control as opposed to centralized electronic money or central banking systems. An advantage is that these can’t be as easily tracked as traditional currency. Given that there is no backing it is unclear at present if this alternative form of currency is the future of digital transactions or just the latest silicon snake oil.
It could also be an issue for those who hold security clearance as its anonymity and de-centralized design aren’t the sort of things that investigators like to see.
Test your knowledge and see if you know the bits from the coins.
Bitcoin is mined – as in digitally using special software to solve math problems, and completion of these issues the owner of machine used (a PC) a certain number of Bitcoin in exchange. Mining is an important and integral part of the creation process, which is key to keeping the Bitcoin network stable according to the currency’s supporters.
Anyone who thinks Bitcoin mining is like getting free money should think again! The software required to mine Bitcoins requires a much more powerful computer than most home desktops or certainly laptops. According to online reports one North Carolina “miner” hasn’t had to turn on the heat in the winter because his computer servers that run the Ethereum mining software generate so much heat!