My Experiences using Bitcoin

My Experiences using Bitcoin

Bitcoin is a cryptographic coin proposed by Satoshi Nakamoto using computing power as a proof of work and value. Bitcoin derives the value from the proof of work done which is termed Bitcoin mining. It is a virtual coin with no physical presence. You cannot see or feel it. In fact the coin only exists in wallets which are basically a string of characters. Mine is currently 12PZ2V4Xx1cW7a233wSR1WjQsfqnKcnqzP. At that time Bitcoin prices if any are in cents. I remembered how we celebrated when Bitcoin reaches $5.

I was telling quite a few friends, it costs nearly nothing to put a machine with a few second hand graphic cards in your rack. Just let it run by itself. At that time the difficulty is still manageable. The hash rates were less than 10 Th/s. You can earn 1 or 2 Bitcoin easily a day. There are quite a few early adopters with 100 000 Bitcoins in their Bitcoin wallets. During the early stages, we were plagued by hackers and reputation as a haven for drug dealers and porn peddlers. We were associated with Tor Network and Silkroad. For those who do not know what they are, I am also not going to introduce. But there were those enthusiasts like us who are into this new technology and method of payment. I sincerely believe that Bitcoin will take off. But I also believe in the huge hurdles that will be in front of us, especially government regulations and existing bank laws which will be extremely difficult to navigate across borders. Well I did what I could to promote Bitcoin as a valid alternative that can be explored as a payment method. But one thing I am certain is it will make money.

Everyone was saying that I was crazy and had too much money to spend when I tried to put 4 Radeon 6990s into a PC. Yeap it was quite expensive. I found a much easier way later, which was to buy second hand Radeons which was definitely much cheaper. I stopped buying those new Radeons, one thing was it cost much more, second was with Bitcoin mining, the process basically damaged such fantastic graphic cards which was very wasteful. I used those for my home and office PC for playing games instead. Second hand Radeon 5970 was extremely powerful for Bitcoin mining without the need for Radeon 6990. But even if I had used all new stuff, it would still be a huge profit for me and for anyone willing to listen to me at that time.

At this time right now the price is US$129.33. I wouldn’t recommend any purchase. The Winklevoss Brothers purchased 1% of all Bitcoins which have a theoretical limit of 21 million coins and are divisible up to 6 decimal places 0.000001 which is known as 1 Satoshi. The Winklevosses expressed confidence that their bet is a good one. They bought in when Bitcoins cost less than $10 each. At $10 a coin it is still worth it. But at $130 I am hesitant to say that. At this point the emphasis for us Bitcoin enthusiasts are to ensure stability. Nowadays, basically every major news site run something about Bitcoin every now and then. It is the buzzword now, with Venture Capitalists rushing in like there is no tomorrow and throwing money all around. I really hope that they will not kill the goose that lay the golden eggs. From $5 to $230, this is extreme deflationary which is totally detrimental to the use of Bitcoin as a currency. No one will be willing to pay in Bitcoin with such deflation. But that helps in the sense that it gets all the news reporters interest in Bitcoin and bothering to find out what is Bitcoin. The awareness is there but the usage is still not there. Stability of a currency will allow transactions using Bitcoin to increase and hopefully more and larger companies will come in and start the regulatory and legal framework for the rapid adoption of Bitcoin.

I find it a pity that I could not convince any of my friends to put in a PC or two with a graphic card or two. For those that had bothered to listen, at least now they will have a few tens or hundreds of quads to spend at their leisure. For those early adopters with 100 000 Bitcoin wallets, they are definitely enjoying themselves now, of course provided that they had not deleted their wallets by accident. I know you are slapping yourselves right now but too late!. I myself also deleted quite a few wallets without bothering to backup and restore because at that time Bitcoin wasn’t really worth anything substantial. I am not supporting the speculation of Bitcoin, if you think you can make a killing now by purchasing and accumulating Bitcoins, I would say that time is over. But I am for promoting the use of Bitcoin. Do support Bitcoin transactions.

What you can do is help by buying whatever things you need through web sites that support Bitcoins. You can find a lot of such web sites here at Another way is to tell all your friends about Bitcoin, maybe give them 1 or 2 Satoshi for testing to increase their interest in Bitcoin and slowly guide them on the setup and usage and also persuade them to start buying from Bitcoin enabled web sites. We can also help by posting more frequently in forums about Bitcoin on what you can purchase to increase the awareness of the usage of Bitcoin. Try to use Bitcoin as often as possible. Do not just keep Bitcoin after mining just for the sake of exchanging it for US dollars. Storing it really defeats the purpose of Bitcoin. Instead try to use it as often as possible.

My Bitcoin Rigs are currently shutdown now as I find that mining it is no longer profitable. You cannot even pay the electricity bills with the Bitcoins generated due to the difficulty now. I guess those who are continuing either have a cheap source of electricity or they are using ASICs to mine. But the cost of ASICs are quite expensive and I have not yet found a reliable source of ASICs Bitcoin mining hardware. Maybe if I can find one that is affordable and has an acceptable ROI I will start mining again. But at this moment, I prefer to be transacting in Bitcoins and will also setup some shopping web sites that trade solely with Bitcoins to help increase the transactions.


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