Bitcoin designed on the work of Satoshi Nakatomo’s – not his real name! – 2008 Bitcon white-paper. It provides you with a method to make transactions from peer-to-peer, with no need for a bank visit. There’s no middleman now between you and your transaction, and nobody else can see the money have except for you. Regular people run it, a community way to work together financially.
So, what’s the mechanics behind it you ask?
Bitcoin uses cryptographic hashes, and hash addresses, for everything. Those hash addresses are the key you use to transfer money to another user – it’s basically like an address for your house, think of it like you are sending the post. You can have a unique transaction address for every time you use it, to avoid any security issues. Due to this being ran in a p2p format, this makes very unlikely to create fraud or falsify transactions – because it is ran and covered by clients! At $5 per bitcoin and the value is determined by the users of Bitcoin itself. A person generates a bitcoin with the uses of a computer. The processor will break a cryptographic hash that Bitcoin keeps. Whenever a hash is broken, a peer receives 50 BTC, except if those people are in the same mining pool.
The very first time you run bitcoin client it will create a “Wallet” for you, this will be the storage area for your bitcoins. From here, keypairs are created from your Wallet and transformed into bitcoin hash addresses.
Now, if you consider that 1 Bitcoin is worth $8.60 at the time of writing, then 50 bitcoins is $430, that is a nice amount of cash. Your computer starts crunching numbers to solve a problem that bitcoin tasks it with that is encrypted – if your computer solves the problem, you are given the 50 bitcoins. Now, you do need a good computer to pull this off – but it is possible. It can take a long time on a low-end computer but if you have some extra cash, get your computer upgraded and run a Bitcoin client in the background and just leave it running, let it solve problems, and literally make you money online with Bitcoins while you do whatever you want.
However, there are websites like betco.in, which allow you to work on niche tasks like article writing or graphic design, advertising, anything, in exchange for bitcoins. Have a look at these websites;
They all are a bit like Amazon mTurk, you do small, menial tasks, and then get paid in bitcoins rather than dollars. This is a really good idea, and gives you something to do to pass the time, while earning a decent amount of money every day if you stay at it and give it time and patience.
So what are you waiting for? You now have two easy to do ways to make money online with Bitcoins, start bringing in some awesome residual money to keep your house ticking over, or to pay for some nice extras!