If You Had Only $20 Left ...

Ahh Phil. guess if that was all I had left for the rest of my life.. I`d go and get a cleaning job to earn enough a
day for daily eats I guess. surely someone would still have money? or food ? specially the politicians., they can help, my good friend is the PM so surely he wouldn`t let me starve LOL.. or else go on welfare .
 

Well, it's a totally theoretical scenario, one in which all the money that is left is divvied up and we each get $20 - there's no more after that. No paying jobs, no government bail-outs, no welfare, no banks, no loans, nothing - just that $20.

I guess I thought of this because recently I've been getting into Bitcoin and other "alternate" currencies, and there's always discussions about fiat currency versus alternate, the pros and cons, levels of regulation, etc. For someone who has never really paid much attention to the financial world it's been an education for me, unfortunately one that only serves to reinforce my distrust of politics.
 
Bitcoin is a new currency that was created in 2009 by a gentleman using the screen name Satoshi Nakamoto. No one really knows who he is. (Giving you lots of confidence already, right? :D)

Bitcoins are "created" by mining them - using a computer to solve complex mathematical equations, and those equations are actually an ongoing ledger of Bitcoin transactions throughout the world. Miners are "rewarded" with a small percentage of the coins they mine.

You can buy bitcoins with cash, exchange them with other people or acquire them by accepting them in your business. It's a valid currency that offers several advantages over fiat currency, namely you remain anonymous in all of your transactions, there are no banks or regulating agencies involved and the security is very high-level.

You can "play the market" with bitcoins - there are over 100 other alternate currencies at this point, and you can speculate by buying those currencies and holding them in hopes of their becoming popular. You can also hold your bitcoins and sell them when their value increases, but of course there are also decreases, so like the stock market it's a form of gambling.

You store your bitcoins in a "wallet", basically a tiny text file on your computer that contains your "address" - for example, my public address is:

19vKdk8KxdLNQ3SXrsx8vWELv96pagKoJd

So if anyone wanted to send me bitcoins they would just use that address and voila, the coins would appear in my wallet. (Hint, hint!)

Of course I have a private address, multiple passwords, two-phase verification, etc. - all security methods designed to protect my virtual currency.

You can also earn bitcoins by doing small online jobs such as surveys, or you can visit one of the hundreds of "faucets" which periodically "leak" a tiny percentage of bitcoin, which is then credited to your wallet.

Hope that helps at least a little - I'm still learning all the ins and outs of the currency myself, and it's a fascinating study.
 

Yeah, there's talk by the fan-boys of it becoming a huge thing, but there are still crocodiles in the water - last fall one of the main exchanges of bitcoins, a company called Mt. Gox, went belly-up and took hundreds of millions of dollars of people's money with it. No one is sure whether it was a planned crime or simply grossly ineffective business practices, but either way that money is gone.

It's still like a frontier town of the Old West - you have to watch your back and do your due diligence so you don't wind up on Boot Hill. ;)

It certainly isn't for everyone - yet.
 

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