quote:
But it is far from certain that securities regulators will approve. Even if they do, such a fund would face major challenges, including the current bottlenecks that stop bitcoins from being easily bought and sold.

What are these "current bottlenecks"? Is it:

quote:
A limited number of stores and Web sites are accepting bitcoin as payment, but for now it is primarily a vehicle for speculators.

Or is it:

quote:
The inaccessibility, and the limited quantity of bitcoins, appeal to users who are skeptical of governments and central banks. But it has made the system vulnerable at times to hackers and technology flaws.

Also, the article says this:

quote:
Unlike traditional money, bitcoins exist in no physical form and are not backed by a central bank. Instead, the coins are created by a network of users who solve complex mathematical problems — a method known as “mining” — to generate bitcoins. Only a finite number of bitcoins can be created — 21 million — with the current count at about 11 million. A limited number of stores and Web sites are accepting bitcoin as payment, but for now it is primarily a vehicle for speculators

Why is it necessary to solve a complex mathematical problem in order to obtain bitcoins?

Thank you for your attention to my questions.

1 ...

Report Post

Posted by WikiTiger

Member since Sep 2007

41055 posts

Posted on 7/7/13 at 7:32 pm to SabiDojo

quote:
What are these "current bottlenecks"?

It's difficult to buy and sell bitcoins, just as the article stated. There are exchanges setup all over the world that allow you to do this, but the red tape you have to go through to get legacy money to those exchanges is pretty significant. Once you have bitcoins, however, sending them to individuals or business is extremely easy.

It's also true that there aren't many stores and sites that accept it yet, but that number continues to grow every day.

As for the technology flaws, well, bitcoin is a protocol and it is secure. However, third parties that deal in bitcoin have been hacked and bitcoins have been stolen from them.

quote:
Why is it necessary to solve a complex mathematical problem in order to obtain bitcoins?

It's a concept called proof of work. It secures the bitcoin network and allows for the processing of transactions. The system rewards people who perform this work with "mined" bitcoins as well as transaction fees for the transactions they process.

This post was edited on 7/7/13 at 7:36 pm

1 ...

Report Post

Money Talk - Replies to Post

Return To Board

Page 1

Return To Board