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Bitcoins for dummies: your guide to to the digital dosh

Posted at 1:30 pm, March 13, 2014 in Arts & Entertainment, Shopping & Style
Bitcoin ATM

The UK’s first bitcoin ATM arrived last week at Hoxton coffee bar The Old Shoreditch Station. What is a bitcoin ATM? Simple. It’s a machine that lets you buy bitcoins by inserting cashola; the machine then wires them to your online stash – thus making it possible to purchase bitcoins without an online process so painful it should feature in S&M punishment dungeons. ‘Buying a bitcoin online is a massive rigmarole,’ says the café’s owner Nick Letchford. ‘This makes it a million times easier. As soon as I heard about it, I thought: Awesome. Let’s get it. Sounds like the future to me.’

Letchford’s not alone. In January, there was a live bitcoin trading event held at Old Spitalfields popup shop in Shoreditch, spent a week letting customers buy bitcoins over the in the past few weeks – despite of mega bitcoin exchange Mt Gox month – London businesses ranging online theatre ticketing sites to and media law firms have started the digital currency as payment.

The weird thing is, almost no we’ve met has a bloody clue what bitcoins actually are. Fortunately, help is at hand, below are guides explaining just what the new currency is and more importantly, how to spend it!

Paying for food with Bitcoins

BITCOINS, A GUIDE:

What the Christ is a bitcoin?
Oh Jeez, you had to ask… Doesit help if we tell you it’s a unit of a decentralised digital currency?

Nope.A dewhatralised currency?
It means it’s not controlled by a central authority. It’s maintained by a network of people using their computers to log all bitcoin activity – who owns what, who has traded with who, etc.

Who invented Bitcoin, then?
Bitcoin’s creator is a mysterious figure known as Satoshi Nakamoto: Despite US mag Newsweek claiming to have recently found him, no one knows for sure who he is (or even if he is a ‘she’ or a ‘they’), but they vanished in 2010 with a stash of bitcoins believed to worth £1 billion.

Still dunno what a bitcoin is, though…

Brace yourself. It’s a piece of code that fits a specific mathematical formula. It’s so complex that finding a code that fits the formula, requires incredibly powerful computer processors spending huge amounts of time trying different combinations. This is what’s known as ‘mining’ and is how new bitcoins are created. Also, there will only ever be 21 million bitcoins in existence due to the way the formula was worked out.

Eh? But why is code worth money?
It’s not, really. Bitcoin has value (£383.60 per coin at the time of writing) as it’s a good system for moving money. You don’t need to sign up to a third-party company to transfer funds. You can do it directly between individuals. Nah, still don’t get it. Think of a bitcoin like a decimal unit you can send to recipients without the need for a bank. It’s not physical. It only has value due to the popularity of the money distribution system. If everyone stops using it, it’s worthless.

Oh, right. Should I invest, then?
Dunno. Apple recently blocked all ‘wallet’ apps – used to store bitcoins (but you can still log in to wallet websites on iPhone browsers). Two major bitcoin ‘banks’ recently filed for bankruptcy after hackers stole nearly £300m worth of bitcoins from them. Exchange rates also plunge and soar. So you could make a fortune, or just ruin yourself. But plenty of the city’s retailers are falling for it. So at leastsome people think it’s bittylicious.

HOW TO SPEND THEM…

Burgers
Street-food eatery Burger Bear will stuff you with meat in return for virtual moolah, including dogecoins, which apparently are in the cryptocurrency top five. Which raises the question: Wait, there are five kinds of cryptocurrency?

Redemption
In Gospel Oak, St Martin’s Church has started the heppest collection plate in existence, letting people scan a QR code to donate. Why? ‘No one knows who is donating, which is the way it should be. Only God knows.’ Right, guys. But what about Santa?

A (non) sexy massage Think there’s nothing sexy about code? So does Senusous London in Green Park, whose website states that it does ‘not provide sexual services of any kind’. Although it does offer a ‘sensuous G-spot massage’ in exchange for bitcoins.

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