What Is Bitcoin?

I get many confused looks whenever I bring up Bitcoin, so here is the simplest explanation.  Enjoy and let me know if you have any questions.

Bitcoin fever

Hey Everyone,
Just wanted to let you know that I've caught the bitcoin fever. I'm still playing around on my Bitcoin quest, but have made this tutorial for everything you'd need to know in order to set up an extra computer as a bitcoin miner.  Check it out and let me know what you think.

Step 1 - Research Bitcoin Mining

• http://www.youtube.com/watch?v=j7opj5-32hw
• Walkthrough for setting up your mining rig
• http://www.bitcoinmining.com/
• Everything you could want to know about mining
• http://www.youtube.com/watch?v=Lx9zgZCMqXE
• Advanced guide to how the Bitcoin currency works

Step 2 - Pick a Wallet

• http://bitcoin.org/en/choose-your-wallet
• This is a place to store funds and method for spending/receiving funds
• I've chosen Coinbase because it is the most professional looking bitcoin service I have found of any kind.  Plus, it has received $31 million in venture capital funding, so it can be said that they are well vetted at this point.  Their security is also insanely paranoid, which is exactly what you want when they are holding onto your money.

Step 3 - Pick a Pool

• Think of it as a mining guild that shares mining proceeds
• https://en.bitcoin.it/wiki/Comparison_of_mining_pools
• Here's a comparison of all the options
• This is the one I'll be trying: https://mining.bitcoin.cz/
• Slush's Pool may just be the first pool to be created and they are gearing up for an update to Slush 2.0.

Step 4 - Pick Mining Software

• http://www.butterflylabs.com/drivers/
• Easy Option
• http://www.bitcoinmining.com/bitcoin-mining-software/
• Advanced Options

Step 5 - Link it All Together & Start Mining!

• Sign up and/or download all the selected options
• Link them all together so that your mining software knows which pool your in and where to send your money.
• The video walkthrough (above) shows how.

Step 6 - Assess Profitability

• http://www.bitcoinx.com/profit/
• This is a calculator using speed, hardware cost, power usage, exchange rate, etc.

Step 7 - Consider an Upgrade

• CPU hash processing is too slow for profitability.
• GPUs are 100x faster. Good target for quick upgrade.
• ASICs are the future. They're built specifically for mining bitcoin more quickly and efficiently than a standard computer.
• I bought my ASIC from http://www.butterflylabs.com/ as a USB peripheral to plug into my computer.

Good luck! I just bought my ASIC on Black Friday and have been playing around with it ever since.  It won't pay itself off for another month, but I'm having a lot of fun keeping track of the trickle of funds as they come in.