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May 20, 2013 | by  | in Features |
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My Bitcoin Story

By now I’m sure you’ve all heard of Bitcoins. It seems the whole world has come down with Bitcoin fever – Simon Dallow even talked about them on the news. Wait, what’s that? You haven’t heard of Bitcoins? Okay then, for the benefit of those pathetically ignorant readers out there I will try to briefly explain.

Bitcoin is a form of digital currency, as in it only exists on computers (and in our hearts). It was developed in 2008 by the mysterious ‘Satoshi Nakamoto’ (a pseudonym). Bitcoins (abbreviated BTC) are transferred via websites or applications, directly from peer to peer, without the need for an intermediary bank or other organisation. Bitcoin is designed to be anonymous, untraceable and devoid of regulation (basically a wet dream for libertarian computer nerds). Bitcoins are mainly bought and sold at Mt.Gox, a website originally dedicated to exchanging Magic: The Gathering cards (seriously). Only a few fringe vendors currently accept BTC, and it appears they are mainly used to buy illegal drugs through Deep Web shadowsite ‘Silk Road’.

Bitcoins are created, and transactions approved, through a process called ‘mining’, which is using insane amounts of computer-processing power to solve ‘blocks’, which contain complex mathematical equations. Or something like that… look, to be honest I don’t really have any idea how Bitcoins work. Just look it up on Wikipedia. But I do know the most important fact: three years ago, Bitcoins were worth about 5 US cents each. Today, a Bitcoin will cost you around US$116.

I like to consider myself an early adopter of Bitcoin, but if this was really true I’d be sunbathing on my own island right now instead of writing this bullshit. You see, I first heard of Bitcoins when they were worth cents each, on an internet message board in early 2011, but I brushed it off as a scam/pipe-dream. A couple of months later, Bitcoins peaked at around US$30, and the people on that message board who listened and believed were now buying houses with their Bitcoin fortunes. It was then that I jumped on board, but soon ran up against multiple brick walls, as buying and selling Bitcoins is very difficult in New Zealand, as Mt.Gox and the other exchanges do not accept New Zealand bank transfers.

Eventually I was able to track down 2 BTC for NZ$15 each, through shady underground channels (for perspective, at the time I could barely afford to eat). But it was too little, too late. Bitcoin prices dropped back down – the bubble had burst, the dream was over.

Or so it seemed. Bitcoins steadily increased all throughout 2013, reaching and surpassing that previous US$30 high, and eventually peaking at over US$200 in early April. Supposedly this was driven by the Cyprus financial collapse (people hate banks now?), as well as the usual rampant speculation. But once again I fucked it all up, selling most of my Bitcoins on Mt.Gox when they  were going for a meagre US$35, and then realising I couldn’t even get the money from the website into my bank account. Oops!

Right now I own 0.44 BTC. I’ve completely failed to make any money on them, but I still have faith. Some believe that Bitcoins will one day be worth over $1000 each, in which case my paltry 0.44 could buy a PlayStation or something like that. So should you buy some Bitcoins? Some will tell you they are a completely insecure investment. That the price is volatile and tied to nothing. That they are open to attacks from hackers. That the government and banks will shut them down. That people will lose interest and the price will plummet. That they are difficult to make money off in New Zealand. That they can’t even buy anything anyway. All these are legitimate concerns but I ask you this – are you a person who looks to the future, or stays rooted in the past? Are you willing to step into the unknown, or are you afraid of what lies beyond the frontier? Are you going to hurtle headfirst towards the bright utopian digital tomorrow that awaits us, or stay behind clutching your old-world paper currency? And do you want to make mad bank?

The answer is clear. Buy Bitcoins today. Do it now! 

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