You might have heard of Bitcoin. It seems like there isn’t a day that goes by just lately without some report in the news on the world’s most prominent crypto-currency. Most recently it grabbed headlines when the biggest and most sophisticated hack to date saw the theft of $64 million in Bitcoins. As more and more people realise that this was, and is, a pretty solid way to make money and invest – and that it’s somewhat new territory, Bitcoin grabs more and more attention. Tech press coverage is pretty extensive, but with Bitcoin currently all the rage it is increasingly splashed across the major national newpapers and TV channels as well.
Bitcoin has had an incredible year; prices of bitcoin have surged massively during 2016/17, reaching amazing highs as investors look for value investments outside the traditional currency channels.
“The price of bitcoin has surged to more than $14,668,” notes The Guardian, “gaining around $2,000 (£1,494) of value in a day according to bitcoin monitor CoinDesk. That compares with a value below $1,000 at the beginning of the year.”
The nature of how Bitcoin works is highly controversial; it’s digital and, unlike money, is not regulated in most markets like traditional currency and currency trades. And because of its digital nature, it is now a prime target for hackers.
Top this off with the insane price of Bitcoin right now and you have a heady mix of factors that make for plenty of action inside the most popular cryptocurrency market on the planet. How popular is Bitcoin these days? According to reports, Bitcoin mining now consumes more electricity than the whole of Ireland.
But just what is Bitcoin, how do you get some, and can you manage it on your Android? Read on.
What is Bitcoin?
Bitcoin is a virtual currency created in 2009 by a person, or group of people, calling himself/herself/themselves Satoshi Nakamoto. Who Satoshi Nakamoto is, or are, is still the topic of much debate, as no one has ever come forward to say they’re the actual human being who created Bitcoin. But one thing for sure is Satoshi Nakamoto is a cryptographic genius. As a digital currency you would think it would be easy to generate fake Bitcoins or spend the same Bitcoin twice. Not so thanks to Nakamoto’s cryptography.
Every Bitcoin created has a cryptographically generated 64-digit address. Each Bitcoin also has a public key and a private key that unlocks its cryptographically generated addresses. Bitcoin addresses are collectively known as a “wallet” and hold all your Bitcoins. In order to spend your Bitcoins their address must be verified using the public and private keys by a series of decentralized servers (laptops, desktops, dedicated servers, and, increasingly, smartphones) all over the planet.
Because of the advanced cryptography, the verification of these Bitcoin wallets by decentralized servers (known as mining) is a very processor-intensive and time-consuming task. But it also adds a layer of security and confidence in this digital currency. Bitcoin servers are connected via peer-to-peer networks, much like torrent networks, so no centralized server exists.
What is a Bitcoin worth and where can I spend them?
Right now, Bitcoin will make you rich—if you got in early. Back in 2009 a man bought 5,000 Bitcoins for £15 and forgot he had them until news of the currency started exploding earlier this year. He ended up selling those 5,000 Bitcoins a few months ago for £430,000.
Yeah, I want a time machine too.
Bitcoin has been on a wild ride this year. The price exploded to £124 a Bitcoin on some markets in October. At the time everyone thought that was huge. But by November Bitcoin soared to £559.
But Bitcoin prices fluctuate wildly, and if you buy them on an exchange and get in at the wrong time, you can lose a ton of money. However, many now believe the value of Bitcoins can soar ten to a hundred times their current price.
At first you could only spend Bitcoins on random websites—or on the “dark web” where you can buy all kinds of illegal things. But as Bitcoin has risen in prominence, now major websites like Reddit, WordPress, Baidu and several retailers are taking the currency.
How do people get Bitcoins?
You can buy them, or you can mine them. Mining will get you free Bitcoins as rewards for using your hardware to calculate the complex mathematical problem resulting in a 64-digit answer that is required to verify a Bitcoin is legitimate. For every algorithm you solve you are awarded a block of 50 Bitcoins.
But there’s a catch, the difficulty of mining (ie: the algorithms that need solving) are automatically adjusted to make them more or less difficult so that only 50 new Bitcoins are created every ten minutes. This means that the more people that try to mine, the harder it is to get Bitcoins (in other words, more processing power is needed to crack advanced math problems). This helps keep the currency valuable.
Generating Bitcoins is called “mining” because, like mining precious metals in the earth, there is only a set number of Bitcoins that can ever be created—21 million. Right now about 11 million Bitcoins exist, which means only another 10 million can be mined. But if you get even a handful of those ten million, with prices as they are now, you can make enough of it to live on for years…or even the rest of your life.
If you do want to skip mining and just buy Bitcoins, you can do so on one of the many Bitcoin exchanges where you can use physical currency to purchase someone else’s Bitcoins. The biggest Bitcoin currency exchange is Mt. Gox.
Android apps for mining Bitcoins
Okay, so say you want to mine Bitcoins. The best way to do it is by setting up a really sweet PC-rig with the fastest processor, most RAM, and best video card you can. All this power will help your computer calculate the algorithms that will generate the 64-digit code needed to verify Bitcoin transactions. Each time you solve an algorithm, 50 Bitcoins are yours.
Recently, there have also been some Android apps that help you mine Bitcoins. There’s even been a few Bitcoin mining apps that snuck into Apple’s App Store, though the company quickly pulled them.
But, as I said, the thing about mining Bitcoins is that it is a very hardware-intensive task; so unless you have the most recent, cutting-edge Android phone, don’t expect to get far. Also, keep in mind the energy requirements needed to keep your Android powered while running these mining apps. That’s why dedicated PCs or servers are often the best options.
Still, if you do want to give Bitcoin mining a try on your Android, there are a number of apps you could check it out. As always with any Android app, use these at your own risk as Google does not verify the safety or security of Android apps on its Play Store.
I’ve asked around with my Bitcoin mining friends and they say these three apps are the best:
- DroidMiner BTC/LTC Miner – This is a pretty barebones app that lets you mine Bitcoins in the Getwork pool. Pools are collections of miners working together to mine Bitcoins and split the profits.
- Easy Miner – Another pool mining app. This one has a little better UI, showing you charts for Bitcoin prices and network hashing rates.
- LTCMiner – This app, currently in beta, allows you to mine with the Litecoin pool, one of the more popular Bitcoin mining pools. The app has little to offer besides network settings, but it’s worth it for the Litecoin pool support.
Again, keep in mind that, until Android hardware gets much, much faster, you aren’t going to be mining a lot of Bitcoins with these apps. For example, after 8 hours of mining on one of the above apps, my friend only made 0.0005 Bitcoins.
Still, Bitcoin could be a valid contender for the future of currency. If you can get started mining them today, who knows what your stash could be worth in a few years? You could be the next Nathan Mayer Rothschild!