Photo : Aurich Lawson
Courtesy Cyrus Farivar, Ars Technica
Recently, I became the first person in the history of Ars Technica to have a gold—rather than black—user name.
How did I get this blinged-out honor? I bought it for the low, low price of 500 Arscoins—the latest digital cryptocurrency to hit the Internet. Arscoin is one of around 100 or so “altcoins,” or alternative bitcoins, derived from the same source code as the original cryptocurrency.
Everything you need to know to mine Arscoins with your CPU or GPU.
The existing Bitcoin community has an inherent distrust of many altcoins. Bitcoin forums are replete with discussions of “pump and dump” scams, where the originators of a new altcoin might “pre-mine” coins, release their currency to the general public, and market their hot new cryptocurrency hard in order to drive the price up. Then the creators simply sell off their coins at a profit and walk away. It’s one of the oldest financial tricks in the book.
But other altcoin creators are true believers in anarcho-capitalism, or they simply find Bitcoin and its derivatives new and interesting. And not all altcoins are quite as ridiculous as they may seem; evenDogecoin, which was jokingly based on an image meme, has an on-paper market capitalization ofmore than $60 million.
As the new year began, I found myself writing about several new (and often ridiculous) altcoins: Coinye, Norris Coin, and yes, Koindashian. It got me thinking: if anyone can just up and create a new altcoin, how hard can it be? Arscoin is our attempt to find out. Here’s how we created our own digital currency, how you can do it too, and what it all means.
The Arscoin project is for those who want to experiment with digital currencies—and buy some fun hats and colored usernames along the way. In other words, it is for educational use only; we have centralized the system in order to prevent it from developing into a real-money economy.
Jesuscoin and Snoochyboochy
While the creator of Bitcoin
remains a mystery is reluctant to talk about his creation, the currency’s digital underpinnings are open to anyone to learn about; it’s famously open source. One of its first major competitors, Litecoin, used the Bitcoin source code in late 2011, changing a few key parameters before releasing its own source code. That, in turn, has spawned more recent clones like BBQCoin and Dogecoin. According to Coinmarketcap.com, 75 mineable altcoins currently exist, with market capitalizations ranging from $38,000 (FedoraCoin) to $10.3 billion (Bitcoin). Even other journalists have started their own altcoins (see Joe Weisenthal’s Stalwartbucks).
To create an altcoin, enterprising developers generally take the Bitcoin (or Litecoin) source code found on Github, tweak it as they see fit, and then compile it into the files necessary to generate the blockchain and start mining. Not surprisingly, there’s an entire subreddit devoted to the practice, and helpful altcoin users have written up extensive guides with titles like “The altcoin explosion… and how to profit from it,” “Complete Guide on How to Create a New Alt Coin,” and “How To Clone Scrypt Based Altcoins for Fun and Profit.”
However, for non-coders, this approach often includes daunting instructions like:
Once all of the dependencies are built and installed, the next step is to clone the source from git. In this example, I will be cloning foocoin, rename it, re-git initialize it, and push the initial copy out to Github to ensure git is working:%git clone https://github.com/foocoin/foocoin.git cloning in to foocoin %mv foocoin barcoin %cd barcoin %rm -rf .git %git init initializing git repository in ~/barcoin %git add -A * %git commit -m "first commit" %git remote add origin https://github.com/barcoin/barcoin.git %git push -u origin master username for email@example.com: barcoin password for firstname.lastname@example.org: **********
But for programming newbies (like me), altcoin creation is still possible. University of North Carolina student Matt Corallo’s Coingen.io debuted in early January 2014, and many sources told me that it is the easiest way to craft a new altcoin. It has already been used to create coins with names like “jesuscoin,” “snoochyboochy,” “supercalifragilisticexpialidociouscoin,” and my personal favorite, “wake_up_sheeples_banker_owned_federal_reserve_notes_equals_more_debt.”
Courtesy Mellisa Tolentino, SiliconAngle
Now that we have an idea of how Bitcoin got started, the very next step for those looking to jump on this digital bandwagon is learning how and where to buy the currency, and where they can spend it. With that in mind, SiliconANGLE presents a simple guide to help readers get started in this digital currency.
Address – the only piece of information you need to provide so that someone can pay you Bitcoin, it’s like your home address or e-mail address.
Bitcoin/BTC – digital currency.
Blockchain – a public record of all BTC transactions, this prevents reusing of BTC.
Double spend – the act of using BTC in two separate transactions at the same time.
Private key – a code that proves you have the right to spend BTC; think of it as an ATM PIN number, if someone gets a hold of it, someone gets to access your money…
Signature – this proves your ownership of the BTC in your possession.
Wallet – The place where you ‘keep’ your BTC, much like your real wallet where you keep wads of notes.
What you need to know
Here’s a few things you need to understand first before you go and create your own wallet:
First, Bitcoin is a high risk and volatile currency. Its value may increase or decrease at any given time. Never store money you cannot afford to lose in Bitcoin.
Second, Bitcoin payments are irreversible. Because addresses are anonymous, unless you make it a point to announce that you personally own an address, once you make payment, you can’t get BTC back unless the receiver agrees to refund it. So make sure you only transact with trustworthy people and organizations.
Third, Bitcoin it is still experimental. Even though we’re seeing more people use BTC, helping it to become more stable, one cannot predict what the future holds. It could go away in an instant.
Create a Bitcoin Wallet – this is the first step you need to accomplish before you can start buying BTC or trading BTC. This is where you will store your digital currency. You can get started by downloading a client like Bitcoin-QT, which works for Windows, Ubuntu, Linux and Mac, or else download Bitcoin Wallet on your Android device.
Bitcoin address – upon creating your wallet, your first Bitcoin address will be made so you can get started in buying BTC. You can create more addresses as you go on. It is recommended that you make different addresses for each transaction to maintain anonymity.
Buy BTC – this can be done in a number of ways, such as paying cash via Localbitcoins wherein you personally meet with people who are selling BTC; via BitInstant; via exchanges such as MtGox; via Blockchains; or finally, via bank transfer, but this method requires finding trustworthy that is willing to sell BTC. In such cases, the buyer transfers the amount required to the seller’s bank account and when received, the seller will then transfer BTC to the buyer’s wallet via the address provided;
Just like real money, you need to perform additional actions to keep your BTC safe.
The first step is to backup your wallet by either printing it or keeping it in thumb or external hard drive. That way, when your computer crashes or your phone gets lost or stolen, you will still be able to access your wallet.
Second, encrypt your wallet so even if someone else gets a hold of your computer or phone, your BTC will be safe and cannot be used by others. Also, this will help you keep hackers at bay. Unfortunately, if you lose your password, your BTC will be permanently lost as there is no password recovery.
As for the other technical stuff like mining, you don’t really need to understand it in order to use BTC. But here’s a simple explanation: “Mining” is done to generate more BTC. A group of people who mine Bitcoin is called a “mining pool” and they solve complicated algorithms in order to generate new Bitcoins. The more people crunching numbers, the faster mining is done. If they achieve their goal they are rewarded with new BTC as a perk for performing the work necessary to generate them. So if you want to earn more BTC without spending too much cash, then you can always get into mining to fatten up your Bitcoin wallet.
It’s become an annual event: the fall of Bitcoin. You’ve probably read about it multiple times, and maybe even believe that the online, decentralized currency is already gone forever.
Created by a mysterious, anonymous entity back in 2009 – when the recession was at its worst – Bitcoin is a completely digital currency with no central servers. Transactions are distributed across the network of users, and developers claim counterfeiting to be impossible.
Anyone who wishes can mine Bitcoins by putting their computer to work solving complex math problems, but the total number of Bitcoins that can be created is capped. The currency is designed to increase in value as demand for Bitcoins go up, and it has – occasionally too quickly to be sustainable. By the summer of 2011, for example, one Bitcoin was worth as much as $30 USD. Within weeks it fell as low as $5 – just one incident the media has called the death of Bitcoin.
These spikes and drops – accelerated by speculators – haven’t stopped Bitcoin’s value from rising over time. Outliers aside, the currency’s been trending upwards since it’s creation in 2009. While I’m writing this a single Bitcoin is worth over $48 USD – the most it’s ever been worth. This just days after a glitch temporarily brought the price down to $37.
It’s unclear whether the current value will hold, but major online companies – including Reddit and WordPress – are starting to accept the currency, increasing its legitimacy.
Around the world organizations shut out by traditional merchant processors – Wikileaks, lulzsec and the creator of a 3D printable gun, for example – are turning to the digital currency for donations. And online casinos based entirely around Bitcoin are bringing in serious revenue. A vibrant community of developers, users and enthusiasts surround Bitcoin, and more than a few exchanges around the world allow anyone to trade a conventional currency for the digital one.
So yeah: Bitcoin’s not dead.