At PodCamp WesternMass, one of the sessions I attended was led by Joe Cascio about Bitcoin. "Bitcoin is a digital currency, a protocol, and a software…"

I've kicked around Bitcoin in the past, but never really jumped in. This time, I figured it was a good time to explore it in more detail. At least as I understand it from Joe, Bitcoins are an alternative digital currency. It is shared over an encrypted peer to peer network, and the coins are stored in a wallet, as opposed to an account somewhere.

There are pros and cons to this. If you lose your wallet, you lose whatever was in it. On the other hand, if it were an account somewhere online, and the server that had the account goes away, you'd lose your money that way. Joe talked about the Cyprus banks as an example of the second type of risk. You can store your Bitcoin wallet somewhere so that it acts more like an account if that's what you're interested in.

I installed Bitcoin on my Android phone. If anyone wants to put some money in that wallet, an address is bitcoin:1PNepVfV6wmnpUDAz3oLMQmCuJ7cP44fiQ. I also installed Bitcoin on my Mac. An address for that wallet is bitcoin:1ACM16Gntx4ekgwB2LvL3NokT2wKvaT5fB.

Joe did go into a little bit of detail about Bitcoin mining, or how new Bitcoins get added into the economy. However, that didn't have a lot of practical value, at least to me. I doubt I'll ever have the computation power to mine Bitcoins.

So, the other way of getting Bitcoins is to buy or earn them. Joe recommended a site, Coinbase. I set up an account there. They are particularly focused on buying and selling Bitcoins, particularly based on bank transfers. Joe noted that in setting things up, they can transfer and and from whatever account you've linked, so he recommends being cautious, such as linking it to a small account that you don't use for much of anything else. I set up an account there, but I haven't linked a bank account to it. So, essentially, right now it is a hosted wallet with a bitcoin address bitcoin:1MKhWL7xPiMZgLTC6zaQzC6MhPq72WK6gu

I was particularly interested in connecting bitcoins to other virtual currencies. Virwox, or Virtual World Exchange, allows you to trade between Second Life, Open Metaverse currency, and Avination, which appears to be another Second Life like virtual world. You can also deposit money from various bank accounts in different currencies.

The downside is that primary currency seems to be the Linden Dollar, and you have to pay exchange rates to get in and out of Linden dollars. So, if you want Bitcoins from US Dollars, you deposit US dollars, use them to buy Linden Dollars, and then use the Linden Dollars to buy Bitcoins; two sets of commission charges.

When you set it up for Bitcoins, it also becomes a hosted wallet. My Virwox hosted wallet has this address, bitcoin:13wtvg7P97voZTcjFn8sKs62E5P3NhZQKQ. They charge a transaction fee of .01BTC to transfer bitcoins out of Virwox to other accounts. My sense is that they are probably good if you are making money in Second Life and want to transfer it to Bitcoins, but even with that, their transaction fees seem a bit much.

Currently, 1 Bitcoin is worth about $92. However, you can do things at small fractions of a Bitcoin. Often transactions are in milliBitcoins or microBitcoins. A milliBitcoin is currently worth about nine cents, and a microBitcoin is currently worth nine thousandths of a cent.

With this microcurrency aspects there are lots of other things that can be done. People are offering milli or microBitcoins for people to visit sites online, and perhaps take some action on the site. skude.se is a site that links to other sites where people can earn small amounts of Bitcoins this way.

For example, there is an affiliate site that if people click on, I'll get a microBitcoin for each link, up to 100 per day. That works out to unto nine tenths of a cent a day. Probably not enough to bother with, but, every little bit can help.

I'm kicking around other ideas that I hope to do with Bitcoins, but right now, I'm waiting for my wallets to synchronize so I can start experimenting moving cash around.