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How to buy porn without sullying your bank statement: a guide to Bitcoin

The How-To Issue

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Online shopping has been growing in popularity every year. Current projections predict that shoppers, who spent $225.5 billion online last year, will have almost doubled that figure by 2017. Though we like to buy things on the Internet, many of us don’t like the amount of private information we have to share to do it. Internet commerce has a very real risk of letting slip a massive amount of personal data into the hands of identity thieves and other malicious online lurkers. So how do people buy online without risking their data being stolen? A growing group of shoppers think the solution is an online currency called Bitcoin.

First proposed in 2008 by an online developer (or developers – the identity of the creator is unknown), Bitcoin is a decentralized, anonymous “cryptocurrency” that has been growing in popularity among the digital denizens of the world. The coins can be used without divulging any personal information, making online exchanges more secure and protecting the user from identity theft. It’s the closest thing to cash you can get on the Internet.

It functions on a peer-to-peer computer network that uses cryptographic methods to prevent double spending and other fraud. It is not controlled by any central authority and is minted only by the network of private computers, known as miners, who authenticate every transaction that takes place.

The decentralized, unregulated and anonymous nature of Bitcoin makes it a hard-core libertarian’s wet dream, but it’s making headway with the general public as well because it provides a way to purchase goods and services online without bank account or credit card information and eliminating most complications that arise when dealing with international customers.

Independent shopkeepers and online crafters on Etsy are accepting it, as well as established tech companies like Wordpress and Reddit. Even some brick-and-mortar stores here in Orlando take Bitcoin – downtown bar Whiskey Dicks is one example. Oh, and there are a growing number of porn sites that accept the digital payments, just in case you don’t want that purchase to show up in your bank account statement next month.

It has also led to a rise in sketchy dealings around the darker corners of the Internet, providing a protected way to buy and sell all manner of illegal goods and services on sites like the Black Market Reloaded and Sheep Marketplace. The FBI recently shut down the biggest such marketplace, the Silk Road, but that has done little to slow the other shady web black markets.

So how can you get some of the anonymous digital dough? First you need to set up your Bitcoin wallet, a fairly easy task that can be accomplished at bitcoin.org. After you have your wallet, you can either buy some Bitcoins from an online exchange (Mt. Gox is a popular one) or you can join the network of personal computers verifying transactions and “mine” the coins yourself.

The most important thing to remember if you try to mine yourself is that the process, while possible, is massively difficult to accomplish on a normal computer. The rise in Bitcoin popularity has led to a kind of tech arms race among miners, and the power needed to mine on your own now has priced out most casual consumers.

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