Bitcoin’s recent price surge attracted a lot of attention, including the attention of the mainstream media, and as people struggle to understand and explain this strange new digital currency, they formed a number of misconceptions about it. I will try to address seven of the common ones in this piece.

1. “It’s not a currency”

Since a currency, as it is widely understood, is basically anything that can be used as a means of exchange for goods and services, and Bitcoin is used for that purpose, it stands to reason that Bitcoin is a currency. However, that’s not all Bitcoin is, and there actually wasn’t anything quite like this before. This is why pigeonholing it into any of the established categories isn’t very wise.

Bitcoin is both a currency and a payment system, with one being inseparable from the other. Its purposes are in a kind of symbiotic relationship. Its value as a payment system feeds its value as a currency, and vice versa. And the fact that it is something new, perhaps a new category of money, isn’t necessarily a bad thing. You can call it the evolution of money.

2. “It has no backing”

The argument goes that Bitcoin is basically conjured out of thin air, and being a “virtual” currency, actually isn’t even real. This argument essentially equates Bitcoin to World of Warcraft gold, EVE Online ISK, or Linden Dollars – in other words it’s useless play money.

First of all, it is quite shortsighted to think even of these virtual world currencies as worthless since they obviously aren’t without value to the many people using them for the specific purposes for which they are useful. If a person assigns value to a particular virtual good or service, even if it exists merely within the confines of what is essentially a game, then a currency which allows him to acquire those goods has value to such a person. Value in general is a subjective thing, and if bitcoin demonstrates that it has value to a lot of people then it is not worthless.

Furthermore, Bitcoin definitely is not conjured out of thin air. That’s what the whole process of mining is all about! In order to make a bitcoin come into existence it is not enough to just type a random number on a screen and press enter in some sort of a program. Instead, the program joins in the process of solving highly complicated mathematical problems which have the purpose of strengthening the cryptography of the entire Bitcoin system, thereby strengthening the security of all Bitcoin users. This is the utility value of Bitcoin, in addition to all of the other characteristics that make it an attractive payment system.

And in order to be able to do that it expends significant amounts of electricity. Thus if you’re looking for a real world source of Bitcoins it is electricity, or rather, energy. Between matter (physical tangible things) and energy, there really isn’t a fundamental difference. Just ask Einstein!

I personally find it somewhat laughable when people pose this critique against Bitcoin and immediately compare it to the US Dollar, for example, which is “backed” by the might and power of the US Government. It seems there’s a rather widespread cultural blind spot that has developed among the masses which prevents people from seeing the “backing” of the US Government as a liability rather than anything to be happy and secure about.

The problem is trust, and the fact is that this government which so many trusted, is giving the federal reserve the power to print as much money as they please, literally by typing up numbers on a computer screen in accordance to what they, the masters of the economy, believe to be prudent. I don’t get how does this situation make people feel safe and secure. This fact, that the US Government and the fed control our money, has played a crucial role in just about every recession we’ve had in recent decades, including the 2008 financial crisis, and the upcoming inevitable crash which they won’t be able to maneuver out of by simply printing up stimulus packages (it will kill the dollar).

Bitcoin is, when you understand these facts, actually better backed in the long term than the US dollar or other fiat currencies. It has actual energy behind it, utility value, and cannot be inflated at will. When you also understand that value is subjective, and that many people value things like trust, security, privacy, and other things provided by Bitcoin, that also gives bitcoin the backing it needs to be a worthy currency. In comparison US dollar is only numbers on the screen representing someone’s debt to some bank, and requires you to trust a centralized system.

3. “It is valued too high”

If you consider the fact that there will only ever be 21 million bitcoins (built in scarcity), and that the increasing difficulty in mining it resembles the increasing difficulty in mining natural metals such as gold, this misconception should be easily answered. The more people enter the bitcoin economy the more valuable it will be relative to the dollar economy. If the whole world were to join in, the current value of around $100 to $130  is actually fantastically undervalued. Bitcoin wouldn’t even be on the same playing field. USD would look worthless in comparison.

In other words, it’s not valued too high. It is valued too low, albeit at this point this is probably where it should be, during its volatile stage as the word is still spreading, people are still struggling to understand it, and the infrastructure is still being established and polished up. But when it stabilizes at its real value it should be orders of magnitude worth more than it is now relative to USD.

As a side note, you might think this scarcity presents another problem; how would billions of people trade with only 21 million bitcoins. The answer is that bitcoins can be subdivided into fractions of bitcoins such as microbitcoins or nanobitcoins. When one bitcoin becomes too valuable things that cost far less can be traded in these smaller units of bitcoin. This is similar to how we have cents for dollars and euros, or how you can trade in grams of gold instead of just kilograms or ounces. You can’t subdivide dollar cents like this, which presents a necessity for there to be many more dollars than bitcoins, but that opens the doors to inflation and economic manipulation since there is a central authority that prints these new dollars that can easily abuse this power.

4. “You can mainly buy drugs and other illegal goods with it”

I’ve seen certain talking heads shamelessly repeat this lie in the media multiple times in a way that suggests embarrassing ignorance at best and downright dishonesty at worst; that Bitcoins are mainly used to buy illegal drugs and for other types of shady business. You only need to look at the sizeable list of places that accept bitcoins, the fact that major brands like Reddit, WordPress, Namecheap, and others accept it, to see how far from truth this claim is.

You can buy just about anything with bitcoins, and many are. Drugs are just a small subset of it. The same actually holds true for cash in other currencies. You can buy drugs with dollars and euros as well, yet that doesn’t make people think of these currencies as “shady”, since you can obviously buy many other things with them that don’t have any connotations with shady business. If you think something still can’t be bought with bitcoins that you can buy with dollars, perhaps it’s an opportunity to provide it yourself and make some of your own bitcoins.

5. “It appeals mainly to libertarian anarchists”

While there is some truth to this claim, it isn’t true that Bitcoin appeals only to libertarian leaning people. There are socialist anarchists across Europe who are heeding its arrival for their own reasons, not so much tied to libertarian free market ideals.

Beyond political affiliations people across Europe find it appealing due to its decentralized nature, in the face of the crisis that is hitting the eurozone as governments bail out banks and entire countries on its back. It’s no coincidence, for example, that the cypriot collapse has been widely reported as one of the fuels of the recent Bitcoin price spike. People are losing trust in currencies which are tied to a system that looks increasingly unstable.

Then there’s the purely practical appeal. A good example are merchants which see Bitcoin as a quick and convenient payment method that they can offer to their customers without fear of chargebacks, and high processing fees. Customers find it appealing for the privacy, borderlessness, and ease of use.

In other words, Bitcoin appeals to people of various politicial affiliations, but also for reasons that go beyond politics in general.

6. “It will be heavily regulated and/or shut down”

There may be some sense in the expectation that governments will try to regulate or shut down Bitcoin. From the perspective of those with vested interests in the current system it is a threat. It is easy for them to trump up associations between bitcoin and money laundering, tax evasion, and drug dealing to make it seem as if Bitcoin is mainly enabling criminal enterprises, and use this as an excuse to regulate or shut it down.

The trouble is, it can’t really be shut down, and it doesn’t lend itself easily to regulation. This again has to do with its decentralized nature. It isn’t based in any single country, and doesn’t have a single governing body. In that sense it is much like the internet itself. Even if one country regulated it, people can still extremely easily bypass it through other countries. Furthermore, the encryption and the ability to conduct untraceable transactions make it very difficult to enforce any would be regulations. How can you control what you cannot see?

Finally, even if they somehow banned bitcoin, it is open source software, and the whole system can easily be forked to create an alternative that the government hasn’t even begun to tackle yet.

So it looks extremely unlikely that successful regulation or even banning of Bitcoin is even possible.

7. “It is completely anonymous”

Bitcoin actually doesn’t insure complete anonymity as bitcoin transactions technically aren’t anonymous. Rather they are pseudonymous, with addresses acting as pseudonyms, and transactions between these addresses being public. What it does is allow you to be as anonymous as you wish, that is, it enables you to take control over your privacy. How private your transactions will be, and how easily traceable to you, will depend on how you use it.

For example, if you put up an address on a web page related to you, accepting payments or donations to it, then it will be rather obvious that the bitcoins coming into that address are being paid to you. Generally, if you want to ensure the complete anonymity and untraceability of your transactions you should use a new address for each new transaction, and the bitcoin system makes that pretty easy to do. If each transaction is tied to a new address it will be next to impossible to tell that this new address, or all the other addresses you used, actually belong to you.

8. “It is too difficult to use”

Setting up an offline wallet may be a bit bothersome, I will grant that, but there are some options which make it more straightforward. Namely, the Electrum bitcoin wallet doesn’t require you to download gigabytes of the constantly growing blockchain before you can actually use it to transact. Instead it uses blockchain copies already available online elsewhere. It also backs up your wallet to one of a number of secure servers. Only thing you absolutely have to remember is your passphrase.

But there is a number of online wallets, such as blockchain.info, which make it as easy to use as PayPal, and even easier since it won’t require you to send in copies of your government IDs and whatnot in order to become a verified account holder and be able to take full advantage of it. It also features one click backups of your wallet to specified destinations, including email, and can automatically backup your wallet after every change made to it (that is, after every transaction). Creating new addresses for new transactions is also super easy.

Even buying bitcoins generally isn’t much harder than exchanging into any other currencies, with deposit options including everything from direct deposits and wire transfers to paypal via special channels. Check out our introductory guide to bitcoin for more information.

Source: http://www.tech-faq.com

People Who Changed the World – Without Formal Education

Famous scientists and inventors who dropped out of school changed the way we understand and perceive reality. They proved that imagination, hard work, and trusting your hunches are more important than formal education. Their inventions gave recreation and work to millions of people around the world. These famous scientists and tech people donated to charitable causes to eradicate poverty and diseases and to help disadvantaged people.

Thomas Edison

Thomas Edison is a prolific inventor, businessman, and a famous dropout who invented the light bulb, motion picture camera, and stock ticker. His mother taught him to read and write after he was expelled from school because teachers thought he was too slow to learn. He was self-disciplined and industrious, worked hard, experimented, and spent a lot of time reading in the public library. While working on a train, selling newspapers, tobacco, and candy, a bottle of phosphorus in his train lab started a fire. He gave up trains, changed several jobs, and devoted himself to inventing.

The Wright Brothers

The Wright brothers invented the “flying machine” and flew the first airplane. Orville Wright was expelled from elementary school. While both Wilbur and Orville attended high school, they never graduated. They spent a lot of time watching birds in flight, designed gliders, and invented an airplane that gained enough airspeed for a successful flight. The fathers of flight did work on wing design, propellers, and in the field of aerodynamics. There is little hope for advance if we believe that reality is fixed and only accepted truths are true, Orville Wright once said.

Bill Gates

Bill Gates, a Harvard dropout, became a dropout billionaire who earns about $20 million a day. If he were to pay the U.S. national debt, it would take him about 10 years. The former chief executive of Microsoft is a computer programmer, entrepreneur, author, and philanthropist. While Edison put a lot of time and money into his inventions, Bill Gates is focused on malaria eradication and improving access to education.

Larry Ellison

Larry Ellison, who founded Oracle, is a billionaire college dropout and the world’s 9th richest person. Diplomas are for losers, he told Yale graduates in his commencement address. “Loserhood. Loser Cum Laude,” he said. Ellison is a magnate who owns planes, yachts, and islands. He also said he has given millions of dollars to charitable causes, including education and medical research.

Michael Dell

Michael Dell dropped out of college at the age of 19. The founder of Dell Inc. shown an interest in technology from an early age and contributed to the computer revolution later in his life. Dell Inc. has hundreds of thousands of employees around the world. Millions of companies, public libraries, foundations, and individuals use Dell computers for research and their daily tasks. The Michael and Susan Dell Foundation has donated to many charitable causes such as the Asian tsunami victims.

Steve Jobs

Steve Jobs, the chairman and co-founder of Apple Inc. was also a college dropout. He introduced the Macintosh and is recognized as one of the pioneers of the computer revolution. His many visionary creations, such as the iPad and iPhone, have changed the lives of millions of people. The man who set a standard for animated films believed that technology would help lives, not charity.

Paul Allen

Paul Allen, the founder of Xiant software and co-founder of Microsoft dropped out of the University of Washington. Known as the “idea man”, Allen became a billionaire in his early 30s. He invested in different companies while pursuing his wired world strategy. In his words, he “saw a connected future” and a wired world. Allen is the founder of the Paul G. Allen Family Foundation which has donated close to $30 million to non-for-profits in the U.S.

Mark Zuckerberg

Mark Zuckerberg is a Harvard dropout and the founder of Facebook. For him, it is more important to connect the world than to offer services for money. Openness and minimalism are important for him. Zuckerberg is a charity donor who gave more than $498 million to the Silicon Valley Community Foundation.

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Myths and urban legends are the stories that we hear and pass on for their unbelievable yet fascinating facts. We want to believe some of them so badly that we take affront when someone tells us otherwise. It is hard to distinguish between fact and fiction and sometimes, the most unbelievable stories are the ones that are true. A good for instance of this is the man who supposedly died at his desk at work on Monday yet no one noticed he was dead until the following Saturday. While this is not true, Ignacio Mendez died on a New York subway early one morning and rode the train all day long before being discovered as having taken his last ride. Of course, the exaggerated version has him sitting there for days instead of hours. Here is a list of ten myths that most people believe to be false. Each one is true.

 A Large percentage of U.S. Currency Contains Cocaine

Head for your bank and withdraw all your money. Make sure you ask for it in ones and then insist that it be counted using a counting machine. When they have counted it, insist that they count it again. Several studies have proven that U.S. bills are saturated with cocaine. Well, maybe saturated is too strong of a word. One in five (some studies suggest) have at least traces of cocaine on them. The problem is that cocaine power is so fine that one bill with cocaine on it will contaminate a counting machine which in turn will contaminate hundreds of other bills (or more.) Counting machines can become contaminated and fan the other bills they count, spreading the wealth, so to speak.

Another study tested more than 135 bills collected from all over the country randomly and all but four tested positive for traces of coke. Do not go licking your wallet just yet. Money also carries all sorts of other nasty germs including the flu and any thing else you can catch from touch or saliva. (Catch a cold, sneeze on a twenty and hand it to a friend, if you do not believe me.)

Besides, the traces are so small that your tongue will fall off before you get high.

Water Heated in a Microwave Can Explode

Your microwave oven is not out to get you. It merely wishes to give you a lesson in common sense. If you heat water in a microwave oven, and you do not have something else in the water for the microwaves to heat, either a teabag or a wooden utensil, someone could get hurt. It all depends on how long you heat the water. The problem is that water in a pot or other container is allowed to convert to steam as the water’s temperature rises. In the microwave, the opportunity is not there and when you remove the cup from the oven, the conversion to steam could be abrupt causing the water to “explode.” Whenever you heat a liquid in a microwave, always set it to just the amount of time you need for it to become hot. Never attempt to boil liquid in a microwave because it just will not happen.

Not long ago there were videos on youtube showing people cooking popcorn on their coffee table by taking the magnetron out of the microwave oven. Please do not do this. Those videos were faked and the pictures on that website photo shopped. A magnetron tuned on in a room would start cooking you within a matter of minutes using anything metal to focus the microwaves, even metals inside the walls of the room. Just a few minutes are enough to damage your eyes and cook your brain. You might not notice the effects immediately, but soon after, your eyesight would either be damaged or gone and you might not know what happened, depending on how much brain damage you sustain. Remember, microwaves cook from the inside out.

If the human mind is unhindered by thoughts of doubt, it can achieve just about anything. No one told George Bernard Dantzig that a math equation on the board in a class he was late for was a problem that no one to date had been able to solve, including Einstein. Since he was late, he missed the professor telling the other students to work the first two problems on the board. He did not hear the instructions saying that the third problem would be beyond anyone’s grasp. So what did George do without knowing it was impossible? (or at least improbable.) He solved it. Thus proving once again why the idiots of the world always seem to have all the luck while those of us who slave away at something never seem to achieve all of our goals. They just do not know any better. That is not to say that the child who jumps out of a ten-story window can fly simply because no one has told him he cannot. Nor does it prove the existence of the fat man in the red suit that lives at the North Pole. Belief in something does not make it true, only the knowledge that you are confined to limitations can hold you back when you put your mind to something. The movie Good Will Hunting was taken from this true urban legend.

Coca Cola Used to Contain Cocaine

While it is true that coke used to have cocaine in the list of ingredients that made the now famous soft drink famous, many of the myths attached to the truth are merely myths. Coke had such an infinitesimal amount of cocaine in it that no one was being hooked on it. Parents were not locking their purses and wallets away from the kids to keep them from stealing the rent money and buying up coke. Nor were they knocking over drug stores to steal their supply of coke. If that had been the case, I am sure that my great uncle Eddie, scoundrel that he was, would have been on the docks handing out samples to the immigrants he hoped to supply from the dark alleys and pool halls. To believe that an entire generation was addicted to coca cola is a pretty big pill to swallow. It did have enough in it, however, to make you really feel refreshed and somewhat thirsty for another. That can also be said of the sugar content in today’s soft drinks and the effect was no where close to what the apparent wave of energy drink users feel in almost all of our households right now. Coke added life, not a life of addiction. At least now, we know why our grandparents had a coke and a smile.

Eat Celery for Negative Calories

Fatties of the world rejoice! We finally have a myth about diet food that is actually true, with a few little obstacles of course. The myth that celery is a negative calorie food is true to a certain extent. You actually burn more calories eating it than it provides. Many people are under the false assumption that the act of chewing celery is burning all of these calories but chewing burns about the same amount of calories as breathing, which is approximately zero. The trick is in the digestive tract. There are some forms of plant cellulose that we, as humans, cannot digest. Celery falls squarely into this category. The amount of calories your body burns trying to digest this plant is greater than the amount of calories it contains. Do not get excited yet, as it is not a feasible way to lose much weight. The amounts we are talking about here are negligible.

However, there are other foods that you can choose when trying to lose weight, like the grape, which only contains about 70 calories per one hundred grams. By the way, that other myth about water filling you up so you do not eat as much is somewhat true, except we all know that it does not stop us from eating. However, it will increase the effectiveness of celery (and other diet foods) as the body has to expend more energy to warm the liquid to body temperature so that it can be processed. Hey, every little bit helps. I know this sounds cliché but always consult with your physician or nutritionist before you begin a new diet and/or exercise program. You want to be thin, not dead.

The State of Michigan Threatened Beavers With $10,000 Per Day Fine

Warning all beavers, if you enjoy living harassment free on someone’s property, fill out and submit the proper forms before building and/or maintaining a dam on said property. Otherwise, you might be the cause of state inspectors stepping in bear shit as they come out to tear down your handiwork. The state of Michigan or possibly Pennsylvania does not make a distinction between man and beast when it comes to sending threatening certified letters to its residents. Apparently, a lazy state inspector and upholder of the statutes and codes of his state, upon receiving a complaint from a landowner’s neighbor, sent out just such a letter saying that his property had been inspected and the owner was breaking the law by building and maintaining two dams in the creek or stream that ran through his property. The dams had broken and the excess water could have caused serious damage. The landowner called his dam bluff, suspecting that the overzealous caseworker had not done any kind of dam inspection nor had ever picked his fat ass out of his office chair when it was not absolutely necessary. If he had, he would have known that beavers built the dam and not the owner. It is a damn shame when damn bureaucrats won’t allow a damn landowner to attend his own damn dam problems without telling a damn lie about it. Too late, the DAMage is done, dammit.

Note: Webster definition of bureaucrat: An official who works by fixed routine without exercising intelligent judgment.

Avoid Hospitals in July like the Plague

Ah, July…, that wonderful month of picnics, vacations, wedding, and hospital deaths. Huh? You read correctly. There are a great many teaching hospitals in the world. Teaching hospitals are simply hospitals where new doctors learn to become old doctors, usually on their way to a nice, undemanding private practice. You would think that these hospitals and their apprentice doctors would be particularly careful at this stage of their reputations and careers. So why is it that the mortality rates go up as much as four percent in July? This is the time of year when new doctors are released from their cages and allowed to fly on their own. The problem, according to new research, is not the doctor’s hands-on treatment; rather, it is in the prescribing of medications and their doses that is doing people in. The new doctor has to get some practice in before he actually gets good at it so July is basically guinea pig month. Unfortunately, once the fatality rates rise, they stay risen for the rest of the year.

If you must get sick, the winter and spring is the time to do it. Of course, insurance companies and in particular, Medicare is on a trend to try to save money by forcing doctors to release patients earlier than their stays should be. This tactic completely backfired as patients wind up back in the hospital within a month; costing the insurance company more in the end than if the patient had stayed for full treatment in the first place. Guess what, either they did not get that memo or they do not believe it because the push is still on. Maybe they are playing the long run odds.

Cricket Thermometer

Amos Dolbear had entirely too much time on his hands. This noted physicist figured out that you can tell the outside temperature by counting cricket chirps. This popular method of telling the temperature is often discounted as a myth by those who have tried and not succeeded. This is simply due to their lack of knowing the proper procedure. First of all, only male crickets chirp which just goes to prove that in nature, as well as life, men make the best weathermen. Since women are better gossips, they should stick to the anchor desk. Now all you have to do is accurately count the number of chirps in 14 seconds and then add 40. The farmer’s almanac already knew this trick.

Another proven method is to wait for your husband to go to sleep, count the number of times he farts in an hour and then add his current age. That should give you and accurate temperature reading.

A Physician Weighted the Human Soul Using a Scale

If you were to stack five nickels on a scale, you would have the same weight as the human soul. This is the postulated outcome of the experiments of a man obsessed with the human soul and his ability to prove its existence. Twenty one grams, the outcome of the experiment and the name of a movie starring Sean Penn (among others) seems like a lot when speaking about something you can neither see or touch. The strange study was conducted by Dr. Duncan MacDougall of Massachusetts who devoted the last 13 years of his life either thinking about the weight of the soul, studying the weight of the soul, or defending the findings and techniques used to measure the weight of the soul. Many thought him foolish. Others, mostly in the medical profession, thought him mad, the rest of the world watched in hopeful anticipation.

Dr. MacDougall’s finding have to be questioned whether you believe in the existence of an everlasting soul or not. The time of death used in his experiments is the main concern when considering the actual ability to conduct accurate tests. In science, accuracy is of the utmost importance. There are four deaths that will occur at the end of a human life. First, there is a legal death that widely depends on the laws of the country or even the state in which it occurs. This, of course, had no bearing on the outcome of the experiment. There is the death of the cells and their ability to grow, regenerate, or conduct activity. Some consider the moment of death as occurring when the brain dies, or ceases to function. While this is a measurable death, there is no indication whether Dr. MacDougall was monitoring it. All of these functions amount to the time of physical death. The question then remains; what was the determining factor used to calculate the time of death in the tests, legal, cellular, brain activity, or physical. The moment we stop breathing is very different from the moment in which we physically die. With all of this in mind, something happened that no one could explain. Many may make conjecture but since no one has carried on the good doctors work, we will have to wait for science to become interested enough to figure it out.

Dogs are Raised For Food In China

Now we tread on a very slippery slope. Americans, the Swiss, and many other countries find the eating of dogs to be an abomination of animal cruelty laws instigated in our countries. The Chinese, however, have no such laws. (at all) They feel that dogs, in particular the Saint Bernard are just good eatin’. The have restaurants like the Gourou Wang Restaurant in Beijing, (Formerly known as Peking.) that are dedicated to the dog. The name actually means “The Dog King” in Chinese. Not only do the Chinese think of the Saint Bernard as food, they believe it is a powerful male aphrodisiac. To enhance the power of this use, the dog has to be tortured right before death to get its adrenalin flowing. Only adrenalin juiced dog meat, it seems, is potent enough to help fat, lazy Chinamen get it up.

However, who are we to tell China what to eat? Do not a people of any nation have the right to choose what food is and what is not? Is anyone so brazen and full of himself or herself that they can collectively condemn a culture based on its choice of food, particularly one that goes back before many nations were even formed? What if China felt that eating sushi was an abomination and a right that Japan should not be allowed to exercise. How would we react if India suddenly decided that the sacred cow should be a protected animal. Would we even consider not eating beef? Hey, you can leave my Sunday barbeque alone, Jack. (It’s what’s for dinner!) The only thing to do is to let the powers that be decide what is food and what is not.

I would not like a billion screaming Chinese over here protecting their right to chose what they have for supper. You have to wonder though, what the Chinese would think if we decided to have Panda for desert. Can we at least find a way to induce adrenaline in Saint Bernard’s without torturing the poor animals? Nuff said.