Bitcoin is a decentralized virtual currency that is used primarily online for purchasing items and playing casino games such as Blackjack and Satoshi Slot. There is no oversight and no infrastructure, but all transactions are verified in a shared public ledger called a block chain. It is still in developmental stages, but gaining acceptance as payment for goods and services both online and in some restaurants and markets.
Payments in bitcoin are irreversible and the price value is volatile, so there is much debate regarding whether it is real currency. Bitcoin.org mentions that it should be see “as a high risk asset” at this point in time. Hackers have stolen bitcoins from people and some have lost their bitcoins by forgeting the security key to their virtual wallets. It is possible to acquire bitcoins honestly in several ways. You can accept them as payment for goods and services. You can purchase them at a bitcoin exchange or exchange them with someone. Some people have started up bitcoin businesses online, but that may not be the best option for the beginner. You can also acquire them through the process of competitive mining. Mining is a process by which you use software to solve math algorithms and receive a certain number of bitcoins as a result.
If you solve the problem first, you get the coins. If you are not quick enough and someone else solves it, that person gets the coins and you have to start all over with a new problem. There are no guarantees that you will be successful. Math problems increase in difficulty based upon the rate they are being solved, therefore, mining becomes more and more difficult. Miners began solving math problems using basic computer processors until they realized that graphics chips worked faster. The issue with these methods was the huge amount of power it took to work through the problems and receive your bitcoins. Today, most miners use a different type of processing chip.
An ASIC (Application-Specific Integrated Circuit) chip has been designed especially for solving bitcoin math problems and takes up less power to operate. Miners are also forming groups, called mining pools, to work together to solve the math and get the bitcoins. Each member of the group gets a share of the bitcoins awarded when successful.