one Bitcoin is currently worth about £37.
how much something is "Worth" is generally based on how much a person is willing to pay for it. converting to/from bitcoins is not an easy process, and all measurements of their value are from bitcoin websites. There isn't really a "market value" because the very point of the currency is supposed to be to avoid markets... in that sense, it already starts on the wrong foot. The entire reason it was devised was because the people behind it were alarmists. They were convinced the Entire world economy was going to collapse, money would lose value, and don't want their money 'controlled' by the government and banks, so they made up their own money system, which doesn't require any financial institution between them. In other words, it's something created by the tin-foil hat army for specious reasons. Not looking good so far.
Add to this it's difficult- even impossible to really find out how bitcoins are "mined". I found
this.
The best I can deduce is that Bitcoins are "minted" by some central repository. Then you "mine" them by descrypting them (or something). a "coin" is a chain of digital signatures, each transfer to the next owner is done by digitally signing the hash of the previous transaction with the public key of the next owner and adding them to the end of the coin; a "payee" can verify the signatures an ownership using this. Apparently, the entire bitcoin network is working through building arbitrary encrypted blocks of data, containing all the most recent transactions of the network in an encrypted format. When you decrypt one of these blocks, you broadcast the key to the network, it validates, and then all the transactions in it are fulfilled, and you get 50 bitcoins for your trouble and the network moves to the next block. Point being so you can't just "manufacture" bitcoins, since the transaction that adds fake bitcoins to any of your public keys won't be in one of the those encrypted blocks.
Coins can be lost, however. There's a file that holds both your private keys and the amount of bitcoins in them. If you lose this file, that money ceases existing. If you steal it from someone and also have their public keys, then you have all of the bitcoins associated with those keys.
Worst of all? Bitcoins are worthless. There was a "crash" of bitcoins a while back because some malware was designed to steal the wallet.dat file off people's PCs, and some early adopter that owned like 40% of all the bitcoins in the world got his coins stolen, and the perpetrators sold them for 1 cent each. This caused the value of bitcoins across the network to take a collosal nosedive, going from 17 dollars a bitcoin to a little over 5 cents. This from a system that is designed to avoid "crashes". After this, the changes make it neigh impossible to exchange bitcoins for real money. Which means you need to use the bitcoins.
Go to a grocery store. Can you buy food with bitcoins. No.
Go to a gas station. Can you buy fuel with bitcoins? No.
What can you do? The only thing you can do is hope that somebody will use REAL money to buy your bitcoins (why they would want bitcoins is another mystery...)... then use that real money to buy things. It just doesn't make any sense, because it purports to "fix" all the problems of money being handled by a third-party but still requires it to actually be used, which defeats most of the purpose; leaving only the 'benefit' of anonymous transfers. the Bitcoin community encourages people to install Tor to make it anonymous,because I guess the government is keeping a close eye on a few blowhard that think they can fix every single problem with the current money situation after a LSD-induced fever dream. We all know that Tor is used first and foremost for shuffling child pornography and other illegal materials around and isn't something any sane individual aware of it's underpinnings would install purposely on their machine. Not to mention the HILARIOUS fact that most Tor Nodes are actually run by agencies like the NSA.
This is where things get sinister.
Now, there are people willing to buy Bitcoins. Originally, I thought- "who would want bitcoins?" Then I got to thinking that these are less "tracked" than your standard money transfers. It's harder to trace who gave what to whom and for what, when it comes to bitcoin purchases, since they are decentralized.
What does this mean? I'd be willing to bet that Illegal materials like child pornography are distributed and sold using bitcoin transactions. So those people that you sell your bitcoins to? There really is only one reason a person would want to buy bitcoins. And by selling your bitcoins... you've become involved. Congratulations. There are basically two sides to the bitcoin (haha)...
the side that mines bitcoins and sells them and never really wonders why people would want bitcoins.
the side that uses bitcoins in transactions for illegal materials.
It wasn't
designed this way, of course, but it works for these purposes.
The best part? Bitcoin crashed <again> simply as a result of a SomethingAwful forum thread. Apparently somebody was pushing Bitcoin discussion on the forum, and there was some speculation about how it was unstable as a currency, and how it was a market bubble created by speculation on a worthless commodity, and how nobody will accept it. What happened? The people in the aforementioned first side of the coin started to jump ship and sell their bitcoins. And the price crashed as the supply of available bitcoins to buy exceeded the demand for people to buy them.
Anyway, for this particular case, I think he is misguided. Most people purchase a house by taking out a loan from a bank. There is no "bitcoin bank" you can borrow from- the very purpose of the currency is to avoid any financial institutions at all.
