Magazine | Radar | london
If only it were that easy. My first stop, Bitcoin.org, takes me through exactly how the concept works. It's an entirely decentralised form of cash that can easily and instantly be transferred through the internet (each ‘coin’ is just a string of numbers). No paper, no banks, no fees. Great! No single institution or country controls the release and distribution of Bitcoin, so your money can't be frozen or traced.
So where does the money come from? You mine it. With my axe? No, with your computer. By doing complex problem-solving, eventually your computer will 'discover' bitcoins. Woo, free money! But alas, as more coins are generated the problems become harder to solve, in order to limit supply. I looked into setting this up, but the office computer wouldn't play ball (firewall issues), so I set about looking to buy some with cold, hard cash.
There are loads of exchanges, and the most popular seemed to be mtgox [Ed - currently offline due to security compromise - see below], so I tried to find how I could give them my money. This seemed to require an account with any one of a number of cash transfer agents that I'd never heard of, who would charge me commission and take days to process my transfer and/or create my account. Paypal was formerly a mtgox deposit option, but has been removed as scammers kept on reversing payments. Carrying by bag of pound coins I knocked on the door of every exchange I could find, but the story always seemed similar. Perhaps mining wouldn’t be so hard after all. Back home I easily configured my computer to chip away at the internet goldmine like some kind of digital Gimli. As my cooling fans whined under the strain, I discovered a method by which I could use limited Paypal funds (~£50) to purchase intermediary Second Life currency (SLL) and then convert these into Bitcoins at an exchange called Virwox - finally, sweet success! The market value had dipped a little, now to around $25 - not a sign of a saturated market reacting to a bubble, thought I, but an opportunistic dip before an ever more meteoric ascent. As you can probably foresee, dear reader, this did not happen.
.jpg)
