Recent technology has given us lots of new ways to pay for stuff, with contactless cards and how to use a bitcoin wallet likes of Apple Pay making parting with our hard earned cash easier than ever. But ultimately, these systems all still rely on the age-old system of the pound sterling, as backed by the Bank of England. There is, however, another new financial technology that could revolutionise the way we spend: Bitcoin, which instead of relying on the Bank of England, is a cryptocurrency based on complex maths.
Related: Where Can I Use Apple Pay in the UK? Unlike normal currencies, Bitcoin doesn’t have a central bank or the backing of a government. You can obtain Bitcoins by mining them yourself or buying them from an exchange. But for that to happen, you’ll first need a wallet. How Do I Get a Bitcoin Wallet? There are different ways to get a wallet. You can simply store Bitcoins on your hard disk, in wallet software running locally or you can use an online service and have your coins stored in the cloud.
Conversely, if your coins are stored online with an Exchange, they are more likely to be an attractive target to hackers. How Do I Actually Get Myself Some Bitcoins? There are a number of different methods to buy coins – just as there are many different ways that banks can manipulate money. Exchanges work just like any other sort of financial exchange, with buyers and sellers setting the prices they’re willing to buy and sell for, and the exchange matching people together to make trades.
And what if you have some physical cash you want to turn into Bitcoins? Amazingly there’s even Bitcoin ATMs now. The other way to get hold of Bitcoins is to mine it yourself – which is increasingly a game of diminishing returns. To do this, you need a piece of software on your computer that can crunch the numbers used to slowly generate more Bitcoin. The trouble with this approach is that Bitcoin is designed so that there will only ever be a finite number of coins available – meaning that given the relatively meagre computing power you probably have available versus everyone else, it might cost you more in the electricity to run your computer than it would return in value in Bitcoins. Each Bitcoin Wallet has a unique Bitcoin Address – a long string of numbers and letters that effectively does the same job as a 12-digit credit card number.