Jul 24, 2013 No Comments by


There is plenty written about the digital world that is mildly diverting, in a ‘what will they think of next?’ kind of way, while being unlikely to impinge on the lives of thee and me.

Such is Bitcoin.


It’s been in the news lately because the Winklevoss twins (American, rowers, lantern-jawed, sued Mark Zuckerberg – and won a few bob – for his supposedly having pinched the idea for Facebook from them, subject of movie ‘The Social Network’) have invested in it and because there’s not enough confusion in the world.

Bitcoin is virtual, digital currency.  If we’re honest, all currency is virtual, that’s its point but at least it’s tangible whereas Bitcoin is not*, existing purely as a digital metaphor for cash, albeit one with a value that can be translated into dollars or pounds or yen.  TF struggles with high-minded guff like Bitcoin because we can’t really see the point.  And we’re reminded of maths lessons at school when repeated explanations of algebraic equations only made them more confusing and us even more sweaty with the embarrassment of apparent idiocy.

*Apparently some dim-wit has minted a few actual coins but we’re at a loss to explain why.

Inevitably there’s a Wikipedia entry for Bitcoin and we’re not ashamed to repeat some of it here:

“Bitcoin is a cryptocurrency where the creation and transfer of bitcoins is based on an open-source cryptographic protocol that is independent of any central authority. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution. The concept was introduced in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system.”

So, there you have it.  Or not.  There’s screeds more fluff that ‘explains’ Bitcoin but it’ll only send you scrabbling for the Nurofen.  We’re mainly writing about Bitcoin here and now because sometimes getting it down in print eventually causes the fug of uncomprehension to lift. Fat chance.  We think we know what this means: “In May 2013, one bitcoin traded at around $125. Taking into account the total number of bitcoins mined, the value of the money supply of the bitcoin network stands at over $1.4 billion,” but have our gast utterly flabbered by: “The Fork of March 2013 – On 12 March 2013, a Bitcoin miner running version 0.8.0 of the Bitcoin software created a large block that was incompatible with earlier versions of the Bitcoin software due to its size. This created a split or ‘fork’ in the block chain since older versions of the software did not accept this block as valid.”


It’s a bit like going for a jog with Mo Farah.  At some point – a second or two at the most – Mo will be off and running and you will be gasping and puking and wondering how any human can move that quickly and keep doing so for quite such a long time.  Perhaps we could be trained to understand but that’s teaching and we’re not sure ‘understanding Bitcoin’ is on any curriculum and even if it was, we’re well past the agonies of the classroom.  The Wikipedia entry for Bitcoin is an example of mis-judging your audience.  The information seems to be there but it’s couched in terms that, themselves, require explanation.  Apologies if you think we’re being dim for not understanding what this means: “Currently, 25 bitcoins are generated with each block found which occurs every 10 minutes on average. This amount, called the block reward, will be halved to 12.5 bitcoins within the year 2017 and again roughly every 4 years thereafter until a hard-limit of 21 million bitcoins is reached around the year 2140*.”  Obviously we understand that after 2140 there will be no more new Bitcoins and the world will have to make do with 21 million, but ‘blocks’ and ‘block rewards’?  And we’ll be long gone by then so couldn’t give a toss how these blocks are ‘found’ and why 25 and why every 10 minutes?  And why does it seem, depending on which publications you read, that so many brain-boxes are throwing in their intellectual and financial lot with a currency that cannot be regulated, even though all governments in all countries in which Bitcoin transactions occur will doubtless try to regulate it so they can tax the transactions.  Which in turn helps explain why countries such as Iran, where trade embargos are in place, or dealers in illegal commodities (drugs, black market goods) have used Bitcoin to side-step regulatory obstacles.

*This might be a mistake.  Some reports have suggested that critical Bitcoin mass will be reached by 2040, not 2140.  Either way, it’s not going to happen for a while.

And if one Bitcoin is worth $125 (at time of writing the price was down to $86.78) and we want to buy one, where do we go?  Travelex?  Money Supermarket?  The Winklevoss brothers (£1.5 million) and (PayPal co-founder) Peter Thiel’s Founders Fund ($3 million) have invested in Bitcoin but does this mean they ‘own’ a commensurate quantity of Bitcoins?  One place you could try (and there are many) is Bittylicious about which you can read here but one disgruntled commenter thinks it’s all a scam.  We’re so used to going in to, say, the Post Office and laying down a certain number of pounds in exchange for a commensurate wad of foreign currency it seems odd that buying Bitcoin is regarded as ‘difficult’.

The Bittylicious home page. Still can’t get past the name’s Little Britain connotations.

OK, we’ve been on and although buying Bitcoin might not be difficult, doing it properly (so your Bitcoins don’t get nicked by some cyber-crim) is waaaay too complex for even the above-average Fogey.  There are some ‘boxes’ you have to tick, such as being registered for online banking and being able to make and receive ‘faster payments’ (we are) but then we get to the ‘choose a wallet’ section, which might be as straightforward as downloading an app or morsel of software but probably isn’t (more later).  You also have to grasp notions and meanings such as ‘block-chain’, ‘cryptography’, ‘private keys’, ‘signatures’ and ‘mining’.  This is gleaned from the website here and is supposedly a concise description of how it all works.

Encouragingly, registering at is very simple.  Now we choose our Bitcoin wallet.  Well, there may be a choice if you’re a smart bottom but if you’re a Tech Fogey there’s one that recommends: MultiBit.  Only it requires Java (one of those ubiquitous slivers of software that makes graphic things happen on your computer) and Firefox has deemed some Java plug-ins to be ‘vulnerable’ (and we don’t think this means Java is from a broken home and has a rapidly escalating drug habit).  Oh, the irony – trying to install a (hopefully secure) Bitcoin wallet with software that seems anything but.  If we didn’t have your best interests at heart we’d have given up on our Bitcoin quest long ago.

Forging ever onwards, though, we now have vulnerable Java on our PC and will be mithered every day to install pointless updates thereto.  As the MultiBit Bitcoin wallet installs a couple of integral options pop-up.  We should back-up our wallets, it says.  But, er, we don’t have any; that’s why we’re installing this, isn’t it?  And then we’re asked if we want to ‘generate automatic installation script’. Of course, we have no clue what this means and feel like Old Mother Fogey, who is approaching 80 and is regularly flummoxed when it comes to opening email.  What the hell?  Let’s generate some script!

Back again.  Hmm.  Pressed the button to do the generating and not much happened.  Might now have an empty file in the MultiBit folder called ‘poo’.

We seem to have bought a Bitcoin.  Just the one.  It cost £66.03 and is showing in our wallet as being worth $94.90 which equates to a USD-GBP exchange rate of $1.43, which is a bit shit.  The whole process took less than 10 minutes once we’d discovered where our Bitcoin address was hiding. It’s no different than making any online payment.

The value of our Bitcoin can increase or decrease wholly on the basis of… what?  Traditional currencies have value related to the economic status of the issuing country or countries (eg the Euro), whereas Bitcoin represents a perfect ‘bubble’.  Virtual currency with virtual value.  If more moneyed nobs pile in to Bitcoin you would suppose its value might increase, even though, as time goes by, there will always be a fresh-but-limited supply of ‘new’ coins diluting the pool.

Ooh.  Exciting.  Just glanced at our Bitcoin wallet and we seem to have made four cents already!  Cock. It’s now back to $94.90.  We can see how, for the work-shy procrastinators of the world, checking the value of stuff could become obsessive.  Now we just have to get our Bitcoin wallet off our PC and onto a USB stick or somesuch and thence into a locked box along with the standard proof-of-existence documentation – passport, birth certificate etc.  Or perhaps not.  Maybe there’s a story in being the victim of Bitcoin theft and trying to explain it to Plod.

We’ll keep you posted.