Wednesday, October 24, 2012

Discovering Bitcoin – Hmmm?


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Misty Hollow Carvingwas launched in October 2008
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Discovering Bitcoin – Hmmm?
New discoveries today have me thinking. Hmmm?

Up to now when I buy something I have to go through the Bank to deal with my money. 

The way it usually happens is that I use my credit card to buy something. At the point of sale my credit card guarantees the merchant that they will give him the money from their account because I am a good customer of theirs.   At the end of the month I pay the credit card company the money that I bought on their credit… and then pay them for the use of their money.  I write a check on my money at the Bank.

Today I read of “Bitcoin” – an amazing idea that bypasses the Credit Card Company – I think. I sure need to read more about this before taking on a new project.

Bitcoin describes what their company does… quote…
Q. What is Bitcoin?
A. Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.
Q. How does Bitcoin work?
A. Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use.
End quote

Wow!  Can you imagine?

What happens when the power goes out?  And it happens for a long time??? Whoa!

But I am starting to think like my Great Grandpa Kirkpatrick.  He was worth a lot.  His Banker told him when he left Iowa to travel to Saskatchewan to begin farming… “I can give you as much money as you need. And if you need more please let me know and I will send it to you.”

Back at that time in the early days of 1900 it was all done via mail.  His contacting the Banker was by a letter.  The Bankers reply was by letter as well.  Then the money was guaranteed by a letter to a local Bank in Canada from his Iowa Banker.

Can you fathom the speed of that letter system? Much faster than the Horse and Buggy system – or something called a stage coach I am sure.

What would have my Great Grandpa done with Master Card, VISA or American Express cards? What about ATM machine?

We live in an amazing time for sure.

So if I store up enough Bitcoin in my file I can spend it with other Bitcoin customers. I think that is the way that it works. Hmmm?  Gotta do more reading yet.

Murray Lincoln
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