Bitcoin 2.0

Its amazing how fast things move in the new world that is crypto-currency (Year 0 was only 2009). A couple of months ago we had the collapse of MtGox and others, a few months earlier it was the Silk Road seizure. Now suddenly things are looking more mature (I guess a shake-out of the weakest links HAD to happen), the market is up (bitcoin was at $660 today) and some good innovations are going on.

One of my favourite examples of bitcoin doing good things for the world is BitPesa. This allows you to send money to anyone in Kenya (and other parts of east Africa) buy buying bitcoin and sending it through the BitPesa gateway. Basically you can send real money to anyone who uses the M-Pesa system - a neat pay-by-text and microfinance system run by Safaricom and Vodacom - the mobile phone giants from Kenya and Tanzania. Mobile phone usage is MASSIVE in East Africa and M-Pesa is really huge there (see article), so that's a lot of people you can send money to instantly. PitPesa is run by an American ex-pat living in Nairobi so its obvious they undertand the opportunity and what it could achieve. I hope more of this kind of thing happens as it could open up opportunities for a lot of people in a beautiful part of the world.

I found this link with a movie of the world's largest bitcoin mining corp. They're using big banks of ASICs, each controlled by a raspberry PI. The head guy says his profits are great, but I did the maths and worked out (using a standard bitcoin calculator) that if you buy one of the mining ASICs, at current retail price you'd be looking at a 3 year payback period. That's not much use unless you factor in some dramatic bitcoiin value rises (possible I guess). I realised on thinking further that bitcoin mining will always stabilise at a point where profit is zero for most people, as whenever a better cheaper technology come along, people will buy it until the point where the world's mining capacity pushes the mining difficulty up to the point where profits are zero. Hence, mere mortals sould not expect to make any money. To make money you need an edge - you have to buy the hardware first, and negotiate a big discount. You need to do a deal with the electricity supplier. In short you need to be BIG, like these guys... Or you have to cheat, and get a bot net.