Talking media heads frustrate me because they regurgitate information they don’t understand. They’re like bad salesmen, but with oversized influence.
I’ve been playing with Bitcoin now, just trying to understand all the fuss. I remember the early internet and the first Mozilla browser, the technology was captivating and the idea simple enough. There are some similarities here. HTML (the internet) wasn’t a threat at the time, for example, to small bookstores.
If I’m going to criticize or advocate this thing, I’d like to understand how it works. So I installed my wallet and a miner.
When early HTML was making the rounds you played with it, came up with crafty uses for ‘refresh’, animating an image or loading other unique data. This miner I installed works with a server and a bunch of other miners to ‘discover’ Bitcoins, then the proceeds are distributed amongst the miners. Simple enough, creative enough… I get it.
As for the mining software, it’s not so difficult to get up and running, but it eats up the CPU, and in my case overheats the laptop, forcing a shutdown. My question is: by mining Bitcoins do I generate enough to pay for the electricity it uses? The answer is, unlikely. So for fun, I added the software to a PC. It’s been running for 24 hours. I’ve managed 0.00031922 Bitcoins. At $100 per Bitcoin that’s $0.03 and BTCGuild pays out only after 0.01 Bitcoins ($1.00). That means I would have to run this miner for about 1 1/2 months to get a $1 payout.
It’s fun to play with but don’t count on a miner to pay for the electricity your PC uses.
What about these free bitcoin advertising sites? Those payout between .00008 – .00003 Bitcoins. If you sat at your PC 24 hrs a day clicking Bitcoin ads and left a miner running for about 3 weeks you might make $1.00.
But at the same time if Bitcoins are worth 100 times as much as they are today, next week maybe they’re on to something. I could atleast justify the electricity by buying bitcoin cupcakes.
My sarcastic look at Bitcoins doesn’t take away from the ‘idea’, which clearly has touched a nerve with the gamers, geeks, and punditry. I look forward to watching this story evolve.