Bitcoin Revolution -- BITCOIN - The PRO's & CON's

U.S. prosecutors in Manhattan are sitting on a multimillion-dollar bitcoin gold mine. And it could get much bigger. Federal authorities hauled in 29,655 units of the digital currency -- worth $27 million at current exchange rates -- through an official forfeiture by Bitcoin this week.

The bitcoins had belonged to Silk Road, an anonymous online black market that authorities say was a conduit for purchases of drugs and computer hacking services -- even a place where assassins may have advertised. It was shuttered after an FBI raid in September, when agents took control of its server and arrested the man they say was its founder in San Francisco.



A spokeswoman for Preet Bharara, the U.S. Attorney for New York's Southern District, said Friday that the government is still trying to decide what to do with the forfeited bitcoins. The timing of any sale could make a big difference in the amount the government could realize.

The baffling Bitcoin boom is either an exercise in self-delusion — a high-tech Ponzi scheme that will come crashing down — or an imaginative new Internet technology that could change how millions of people around the world conduct everyday business. There is little middle ground.

Called a "digital currency," Bitcoin originated in early 2009 with a software program written by Satoshi Nakamoto. Who is Nakamoto? Good question. It's a pseudonym, and we don't know who's behind it — whether man or woman; individual or group; American, Japanese, Russian or some other nationality. But what seems clear is that Nakamoto owns bitcoins worth "hundreds of millions of dollars," says Jerry Brito, an analyst at the Mercatus Center of George Mason University and a Bitcoin enthusiast.

You can do two things with bitcoins: buy stuff, just as with traditional money; and hold them as an investment or speculation, hoping their price will rise.

Some shopping does occur with bitcoins. The first retail transaction is usually attributed to Laszlo Hanyecz, a computer programmer in Florida, who in May 2010 persuaded someone to order two pizzas for him in exchange for 10,000 bitcoins. Recently, Overstock.com — an online retailer — agreed to accept bitcoins; the Sacramento Kings basketball team will do likewise. According to coinmap.org, about 2,600 stores and businesses worldwide accept bitcoins, with concentrations in Western Europe, California and New York.

Bitcoin's wild price fluctuations seem disqualifying on all counts. A business that accepts bitcoins takes an immediate risk that the funds will lose 5 percent or 10 percent of their worth before they can be converted into traditional money (dollars, euros, yen). By this logic, retail uses will remain limited. For similar reasons, bitcoins flunk as a store of value and unit of account.
It seems like a scene out of a late night infomercial. A man steps out of a fancy car, or off of a big expensive yacht, and starts his sales speech. "Make thousands, tens of thousands, or hundreds of thousands of dollars all from the comfort of your own home. How?! By mining for bitcoin!" Dropping into everyone's lexicon late last year, bitcoin boomed in 2013, going from $13 to $900 on a roller coaster of a ride. Other cryptocurrencies called alt coins, like litecoin and peercoin, gained exposure through bitcoin's fame. Mining these coins can provide a significant income to anyone willing to spend the time and money. Here are five steps to take to start a cryptocurrency mining career.



With over 90 different cryptocurrencies on the market, alt coin miners have a plethora of options to choose from. And just like stocks, there are blue chip coins and penny share coins. Blue chip cryptocurrencies like bitcoin and litecoin are considered safer coins to mine, offering more reliable payouts, as investors are actively looking to buy these digital coins. However, the hash rate, or the processing time and power it takes to mine a bitcoin, is much higher than on some of the penny-stock currencies.

Pink sheet alt coins, like the meme-based dogecoin or the darknet-intended anoncoin, give miners better net-gain potential. For example, dogecoin is valued at $0.00004 per coin, or four hundredths of a cent.