So You Got Some Bitcoin… Now What?

My family knows how consumed I am with Bitcoin. I first discovered it in February and have spent countless hours researching it. I'm glad to say they are super supportive and excited about it also.  For Christmas, I shared my passion by giving them bitcoins as gifts. Everyone was so stoked and declined my offer to manage the bitcoins for them. They all want to learn more about owning and using them. Here's my post to them and hopefully to your friends and family as well.

Bitcoins are Digital Cash

Bitcoins exist as amounts recorded in a public ledger (the blockchain) at various Bitcoin addresses. Each address has a public and private key. If you lose access to your private key, bitcoins stored at that address will be lost forever. There is no one to complain to. Keep your private key private. Your public key is fine to share. That's the address others can send bitcoins to. Coinbase makes this easy by managing all your public and private keys for you.

Security is Priority Number One

You are the bank. There is no vault door protecting your investment. That's why your computer has to be secured against hackers and thieves. My first recommendation is to have an up-to-date antivirus software running at all times. You should also use a password management program like LastPass or 1Password. These programs will protect you from phishing attacks, make key logging almost irrelevant, and equip you to create strong individual passwords for every site which needs them. Please, never reuse passwords. If you're using 1Password, you can securely store and sync your password database across multiple devices using Dropbox.

Working With Coinbase

Your bitcoins were gifted to you via Coinbase. Coinbase is an online wallet which means they manage your bitcoin addresses and your private keys. You can send bitcoin to your Coinbase account by going to Account Settings -> Bitcoin Addresses. Coinbase creates a new public address with every transaction and sending bitcoin to any of those addresses will credit your account.

Sending Bitcoin for the First Time

A great exercise for understanding how Bitcoin works is to send some from one account to another. Set up a wallet at blockchain.info. If you're using 1Password, be sure to save the Identifier string as well. Once that account is created, you can copy your Bitcoin address, head back to coinbase.com and click the Send/Request option. Click Send Money, paste the address, and send a small amount, such as 1 millibit (.001 bitcoins). It's fun to have the blockchain.info window open in another tab when you do this so you can see how quickly the system works. Say goodbye to 3-5 business days to transfer money between accounts. :) Also, if you want to keep some bitcoin online for purchasing goods and services via your smart phone, the blockchain.info app works well. Depending on the circumstances, you may have to pay a very small transaction fee, but most of the time it will be free.

Setting Up a Paper Wallet

Throughout the history of Bitcoin, there have been a series of hacks on the online exchanges. The very best way to store your bitcoins and to eliminate this risk is to store them offline. This is done via creating a paper wallet through services like bitaddress.org. There are plenty of tutorials online for booting off a CD, disconnecting your computer from the Internet, and printing out your paper wallets. Depending on the amount of bitcoin you're storing, that may be overkill. Once you create your paper wallets, you can send various amounts from Coinbase to those wallet public addresses. Later they can easily be imported back into a standalone Bitcoin client or any of the major online wallets. It's a good idea to store these in a secure, water-proof place such as a safe or safe deposit box. Some people also email or mail portions of the import keys as a backup to friends and relatives so they can be reconstructed later if needed.

Bitcoin as an Investment?

Some (including me) believe bitcoins will have a much higher value in the future. How high could they go? I've heard everything from $1,300 per coin to over $1M per coin  Sound crazy? Well, when you think about the size of the remittances market, the daily forex market, services like MoneyGram and Western Union, those who store value in gold and silver, the number of ecommerce transactions, donations, etc… even a small percentage of those activities done via bitcoin would create a big disruption (especially since there will only ever be 21 million bitcoins).

Bitcoin as Money?

The number of stores accepting bitcoin is increasing all the time with big announcements almost every month. For example, overstock.com recently said they will accept bitcoin as payment in 2014. You can also buy gyft gift cards with bitcoin which, in essence, lets you buy anything from the many vendors they support. Also, keep in mind there are 100,000,000 divisions in each bitcoin which means you can do micro transactions for fractions of a penny.

Cashing Out Your Bitcoins

Since you now have an account with Coinbase, cashing out your bitcoins to old-fashioned fiat currency is really easy. You just have to set up your Coinbase account to have access to your bank account. I trust them, and if you use the method they offer which logs directly into your bank, you can be up and running in minutes. Selling your bitcoins back to Coinbase will result in a bank deposit within 3 to 5 business days.

Taxes

Though some ultra-libertarians and anarcho-capitialists want to pretend bitcoin usage can fly under the radar of the IRS, the truth is today they are not anonymous and are always taxable. That means you need to keep track of a few things:

1. The date you obtained them.
2. The market value at the time you obtained them.
3. The date you sell them, give them as a gift, or use them to purchase something (any taxable event).
4. The market value at the time of the taxable event.

The easiest way to do this is to set up a Google Drive spreadsheet which you can access from anywhere. I'm also working on a service to make this easier as well, so stay tuned. With bitcoin, you are your own bank. You won't be getting a tax document in the mail from anyone with all the info you need to do your taxes at the end of the year.

Why Bother?

Well... to fuller understand my perspective on why Bitcoin (the protocol) and bitcoins (the currency used on the Bitcoin network) are so revolutionary, feel free to explore some of my other posts on the subject. In a nutshell, Bitcoin provides a decentralized public ledger which could make many financial institutions today irrelevant. They empower individuals to store and use the value they create without any third party risk with complete control to send that value to anyone anywhere in the world in minutes for free.

• March 2013 - Bitcoin: DO YOU SPEAK IT???
• April 2013 - My Bitcoin Obsession
• April 2013 - Why Does FoxyCart Support Bitcoin?
• November 2013 - Could Bitcoin Be More Disruptive than the Internet?
• December 2013 - Why Shouldn't You Accept Bitcoin?

I hope this post was helpful to you and your friends and relatives entering the amazing world of Bitcoin. If you'd like to support content like this, feel free to send donations here: 1BxUs1hjWzYLEYdECbrRTJJtcTmwBzNtFN

Living Beyond the Veneer

When we interact with people, we rarely truly engage them as living human beings. We're more often interacting with our limited understanding of who they are. We're dealing with a mental representation of them which filters through our world view, life experiences, prejudices, expectations, desires, labels, judgements, insecurities, and fears. Truly seeing them and being vulnerable is difficult because it requires fresh eyes, lots of questions, and even more listening.

This game perpetuates itself by the representations we ourselves meticulously create for others to perceive. These veneers never stand the test of time nor do they allow us to communicate and understand each other effectively.

I don't claim to have answers or to even know the right questions, but I do want to do better. I want to see, listen, and love.

Expect that from me and please love me enough to tell me when I fall short.

Power Is the Ability to Create Need

Power: the capacity or ability to direct or influence the behavior of others or the course of events.

Here's another way to think about it:

Power is the ability to create need in others.

The next time you feel powerless or you're upset about your unmet (or possibly uncommunicated) expectations, ask yourself, who has power over me? What need do I have, and who put it there?

The obvious culprit is the main stream media controlled by a very small number of corporations. As you move beyond this influence, you arrive to your family, friends, neighbors, fellow church gowers, coworkers, etc. Most of them probably form their needs based on the 4,000 or so advertisements thrown at them daily. So you're back at the mainstream media again.

Needs are most often created in your mind by outside forces.

Those in power all around us create needs. They don't even have to be real needs. As long as we believe our "want" or "desire" is a need, we'll be controlled by it. Governments and corporations do this daily.

The trick is being free of falsely created needs.

If you're reading this in the United States, chances are you're already more wealthy than most people living in the world. Stuck in debt? The house and car you "own" may be a need created by someone else. Maybe you have a need to watch your favorite nightly shows instead of something more productive. The need to eat out? The need for fine clothes? The need for latest smart phone?

Use whatever example works for you. The important point is this: the needs which often define the every day actions of our lives may not be real needs at all. We may have been convinced by others to adopt them. The things which feel out of our control might simply be readjustments in our thinking of needs.

Our parents and grandparents worked for years to obtain what many of us expect right out of college. Our expectations are powerful. If we let others create them for us, we give them power that was meant for us.

Don't blindly let others create needs in your life unless you're actively choosing them yourself. Live intentionally and evaluate the powers you're willing to give up.

To be clear, I'm not stating absolute truths here... just throwing out some thoughts for contemplation and discussion. Did it get you thinking differently? What needs do you have which hold power over you?

Side note: after finishing this post, I watched Zeitgeist: Moving Forward last night which was really thought provoking. A quote which stood out to me: "You have to create problems to create profit."

Hackathons for Remote Teams

Last Thursday we did something unique. We did a 24 hour remote team hackathon across 7 different timezones. There's a full write-up over at the FoxyCart blog, and I'm proud of it. Give it a read and let me know what you think.

Admit It. You're Insecure. We All Are.

On Monday, I sent out my first viral tweet.

As a programmer, it's easy to be paralyzed with lack of confidence in your skills. Instead: solve problems, add value, keep learning.
— Luke Stokes (@lukestokes) July 1, 2013

By Tuesday, I was surprised to see new retweets and favorites still coming in. I struck a nerve. Over 200 retweets in less than two days!

And before you ask, no, I haven't yet received a check from Twitter. I, like many, have often wondered what it would be like to watch a 140-character idea populate the interwebs. Contrary to popular belief, it didn't change my life. I still have to go to work and do my best to build awesome.

The past few days, I've been thinking about this tweet and why it resonated with so many people. I've sent over 12k tweets and never received this response.

Why?

I'm part of a master mind group of 12 individuals who meet every Wednesday morning. At the recommendation of Jeff Goins, we recently read The Icarus Deception. Building art is hard, and whether or not we want to admit it, we're all artists in some way. The deception is we'll fly too high and endanger our wax wings. We forget how the parable also warns us of flying too low to the water.

Don't settle.

If you're read authors like Seth Godin or Steven Pressfield, you're already familiar with the concept of the Lizard Brain and the Resistance. The voices in your head telling you you're a fraud. Telling you you'll never succeed. Trying to convince you you never really grew up and you're just a kid pretending to be an adult.

You're insecure. So are those around you. Even the prideful, arrogant ones. That might not be obvious, but I believe it's true. They are often the ones trying harder than anyone to prove their worth. Man-pleasing, insecurity, and pride often work closely together. They are all trying to handcuff you.

So what can you do about it? Admit it. Understand how it works against you and work out a solution. The insecurity holding us back is, at its very core, basically a lie.

Insecurity: the state of being subject to danger or injury.

If your next project is a total failure, will you really be in physical danger? Will you really be injured? The answer (for most professions, anyway) is no. And yet, we still believe the lie.

Stop.

Admit the weakness. Understand how it prevents you from moving forward and discredit the lies it is based on. Once you can do that, you can create a path towards incredible success.

Along the way, you will fail. If you intend to be great, you will fail a lot. Use each failure to strengthen your mental and emotional muscles. Remind yourself you're not in physical danger and the fear you felt in the beginning was in fact a lie. Celebrate each small step of progress and learn from your mistakes. This is what great men in history have always done.

"If I find 10,000 ways something won't work, I haven't failed. I am not discouraged, because every wrong attempt discarded is another step forward." Thomas A. Edison

Start today.

As Jon Acuff would say, Punch Fear in the Face. Admit your insecurities, understand how lies limit you, and move beyond them. No one can give you permission to be great but you. When you believe it, even just a little bit, you'll start doing great things. Stay humble and hungry and there's nothing you can't accomplish.

Within your profession, what fears paralyze you?

This Bothers Me

1. The US government goes to war or uses funds/weapons/CIA operatives to topple governments it considers a threat to US interests. It doesn't matter if those governments were democratically elected. Usually it involves countries that don't want to play by crony capitalism or global central banking rules. Oh, also, the actual people of the United States don't support these wars or government coup d'états. 
2. In the name of fighting "terrorism" and protecting American citizens, our elected officials pass police-state laws and implement liberty-crushing systems (Prism, the Patriot Act, NDAA, etc).
3. When someone witnesses deception/crimes against humanity and tries to tell people about it (Daniel Ellsberg, Bradley Manning, Edward Snowden, and others), the government considers them a threat and argues their actions risk the lives of military and intelligence personnel (see bullet point 1).

Does anyone else see the circular logic here?

When the branches of government (or, more accurately, the military industrial complex and the bankers/corporations who profit) take action the people don't want (1), put systems of control in place (i.e. tools for fascists) (2), and are discovered when someone points out the misuse of these tools, they site the danger it will create for those at war (3). We're back at (1) again, this time protecting something the people never wanted.

The claims above aren't baseless, but many Americans aren't familiar with them because of who owns the mainstream media. If the nightly news passes judgment on a foreign nation or leader, we often unquestionably consider it the truth. What if there's more to the story?

If even 50% of what follows in these videos and documentaries is true, shouldn't we be talking about it? Why talk about the weather or last night's reality TV show when we can talk about more significant things that impact lives around the world?

Some things I've found interesting lately:

The War On Democracy (1:34 hours)
All Wars Are Bankers' Wars (43 min)
CIA Agent Explains How Al-Qaeda Doesn't Exist (11 min)
The Road to World War 3 (13 min)
The Terrifying Future of The United States (12 min)
** Who Really Owns the Mainstream Media?? ** (11 min)
How the Media Controls Society (13 min)

I'm not saying these videos are smoking guns of proof. I'm simply saying, shouldn't we talk about this stuff? Shouldn't these be a starting point for more research and open discussion? I guarantee there are factual inaccuracies, but what about the facts? What if critical thinking could help us find some truth?

Why don't the majority of our conversations revolve around things we deeply care about?

There are things in this world that bother me. They may not bother you or you may completely disagree with me. Can't we talk about them openly?

Here goes. Here's a list I compiled on 5/30/2013 of things that bother me:

• Loss of my worldview that our country represents the "good guys," spreading freedom and democracy
• Drone strikes and the uncontrolled military industrial complex (see War is a Racket)
• The war on drugs and how completely ineffective it has been (see drug prices)
• The central banking system and global debt slavery (see Creature from Jekyll Island)
• Abortion and eugenics
• Monsanto and the control/poisoning of our food supply
• The treatment of whistle blowers
• Gitmo
• Lies / deception related to the CIA and our involvement in funding / creating terrorist organizations to destabilize governments who don't want to play by the international banking rules (i.e. petrol dollar)
• MK Ultra and whatever versions of it are in operation today
• The centralization of mass media in the hands of a very few which effectively controls the masses by controlling the conversation

I don't list these things to spread fear or depress you. They are listed here so I can get them out in the open and discuss them. Are there action steps to be found? Is there something specific we can do about these issues (or others that may bother you)?

Looking at the list again, I'd like to add a few more like child trafficking and sex slavery.

What would you include?

My last post was about how many of us are often too busy to care and the system we're part of keeps us that way. Shouldn't that bother us?

I don't have the answers, but I'm just starting to look for them. I'm not alone.

We're Too Busy to Care

Most people are working frantically to keep up with their mortgage, school loans, and credit card payments. Some are working two jobs. No time for quality family time. Weekends are filled with diversions because "we deserve it" having worked so hard all week.

Almost our entire lives are spent working for a paycheck, and yet most of us haven't spent time to understand how money actually works. Central banking, fractional reserve lending, and fiat currencies are things for the crazy "occupy" people to worry about. We're busy watching football or Americon Idol.

And yet, we know intrinsically something is wrong. We get that politicians and those in power are corrupt, but what can we do about it? We're too busy. We're clocked in. No time to read a Wikipedia page, watch a documentary, or read a book. Bills are due. Payments have to be made.

We're immersed in a system designed to keep us from asking questions. The system punishes and labels those who don't fit in. We're like frogs in a slowly heating pot of water.

What if your employer gave you the freedom to live your life on your own terms? What if you could set your own hours? What if you could spend an afternoon with your family and work later that night instead of watching TV? What if you had the freedom to research and learn things on your own schedule? What if the standard 9-5 model could be changed via creative thinking and technology?

Don't be too busy for life. Work so you have the freedom to live, learn, and act. Our world has some serious problems right now. Governments around the world are losing credibility and losing approval at an alarming rate. Difficult problems won't go away if we only make time for entertainment television, or if we're hopeless enslaved by debt.

This post may not be for you. You might be hanging on by your fingernails. Instead, this post is for those who are meant to catch you if you fall.

All of us need to get informed. We need to change the conversations we have with our friends and neighbors. Let's start talking about things that matter. Let's care enough to make some changes. Downsize, change jobs, cut out some monthly expenses. Drastic times call for drastic measures.

Don't sit back and let life happen to you. Take action. Many believe a huge financial collapse is coming (and is actually already taking place). What will you do if that happens? Take some steps to provide for your family.

If you have a business idea, pursue it now. Those who control their own income will be in the best position in the future, no matter what happens. It took me 5 years working long hours to build my own business. It's not easy, but it's worth it. Get rid of the stuff keeping you too busy to care.

Most likely, this post won't change your mind about much. It wouldn't have impacted me not long ago. I was so used to the stereotypes of the system, I couldn't see around them. But these thoughts just might plant a seed and help you realize sometime in the future you do have a choice.

--
Some things I've been reading/listening to/watching lately:
Work Smarter - 11 Ted Talks
Secrets of the Millionaire Mind
The Icarus Deception
Predictably Irrational
Lean Analytics
The Keiser Report

Hacking for Fun and (Non)profit

This past weekend I had the privilege of participating (and sponsoring, via FoxyCart) in the National Day of Civic Hacking. Nashville joined 95 cities hosting events all over the country. Saturday and Sunday, we bunkered down at the Emma office to form #Hack4Nash (more info at http://hack4changenash.org/).

Having worked in non-profit ministry for 6 years (raising my own financial suppor to do so), I know how critical money is to the process of serving others. My idea for the weekend was to build a basic content site with detailed screenshots and instructions for non-technical, no-budget nonprofits to get online quickly and start receiving donations. At FoxyCart, we often hear from nonprofits who need to get online but don't have any resources or expertise to do so. No matter how technical something is, a detailed walk-through with screenshots can be followed by just about anyone.

163 screenshots later, DonationGandhi.com was born.

I'm proud of what was accomplished by our little team in such a short timeframe. I think this could be really helpful for those who feel overwhelmed about getting a website online and accepting donations. Even if you know nothing about website hosting, Wordpress, FoxyShop, FoxyCart, Stripe, Twitter or Facebook, we put together tutorials walking through each step.

• Get a domain name and hosting
• Install Wordpress
• Customize Wordpress
• Install an ecommerce plugin
• Build a donation page
• Configure a shopping cart system
• Configure a payment gateway
• Set up a Twitter account
• Set up a Facebook page

You might be asking why I didn't do something more complicated involving PHP, a Hypermedia API or Bitcoin algorithm. The answer is, I wanted to learn Wordpress and FoxyShop. Both are a big part of my business, and I had never personally installed them. Also, it's often the simplest solutions that make the greatest impact.

This site could be really useful to a lot of people... but only if they know about it. Will you help spread the word?

My Bitcoin Obsession

I didn't sign up to be the Nashville Bitcoin wacko. But here I am.

My journey started a couple months ago, and who knows where it will end. I've spent so much time researching Bitcoin, you'd be completely justified in calling it an obsession. It's probably safe to say that 80% of my tweets lately have been about this crypto currency. I've even taken a position with my business to support it.

So what's the big deal?

Well, if you read my last post, you'll know I have some strong opinions about our central banking system. Those opinions line up with men like Andrew Jackson. Debt, fractional reserve lending, fiat currency, and central banking create a petri dish for greed and power spun out of control.

Can Bitcoin help?

Maybe.

That's the big question. The most intelligent arguments against Bitcoin I've seen so far have more to do with Keynesian vs. Austrian economics than with the actual protocol. One argues currencies have to be controlled, deflation will never work, and debt is a good thing. The other wants to be free from central bankers, encourage savings, and invest from those savings.

But how can this be a currency? It's so volatile!

The recent loss of over 80% in value ($266 down to as low as $50) would certainly suggest it's failing in that category. That said, it would also be silly to criticize a toddler for not being able to drive a stick shift. Many disruptive technologies (email, blogging, mp3s, etc) took ten years to obtain widespread adoption.

This technology is barely 4 years old. Where will it be in 2019?

While the market cap remains below trillions of dollars, it will probably remain volatile. It might even stay volatile after that. Only time will tell. My hunch is fractions of a coin will have great value because they meet real needs not currently met by our financial tools. One of the current hurdles to overcome is the reliance on MtGox (the primary exchange) which (among many other Bitcoin sites) has been getting completely hammered by DDoS attacks. Their trade engine lags, people panic and sell, the price drops, and the hackers buy up cheap coins.

I'm constantly reading through the forums, the subreddit, and listening in IRC (#bitcoin). My friends and family are sending me every article they find about Bitcoin. Chances are I've already read them, but I do enjoy a refresher. Please, continue to send them to me (yes, the negative ones too). I really want to have intelligent discussions about this thing.

Now let me give you some advice.

If you're just interested in making a quick buck, please, leave Bitcoin alone. Your involvement will only increase volatility and delay adoption. If you understand how money works, open source technology, p2p networks, and encryption, I'd love to know why you haven't bought some already.

If you think the whole thing is interesting and you'd like to put in a little money you're willing to lose, go ahead and buy a portion of a coin for $50 or so (you don't have to buy a "whole" coin, there are 100,000,000 divisions within each coin). Percentage wise, if there's even a slight chance it gets adopted globally you could not only do well, but you could help with that adoption.

(Here's the obvious "don't take investment advice from anyone" section. Buy something because you want to, not because someone else convinces you it's a good idea.)

So how do you buy some Bitcoin?

You can start with howdoyoubuybitcoins.com. I think Coinbase (connect directly to your bank account) will be the easiest to use, once they increase their daily buy limits. I've also used Bitfloor (deposit cash at a Bank of America via LocalTill), Bitinstant (send cash via Money Gram through ZipZap) and MtGox (send from Dwolla connected directly to your bank account).

Not sure where to get started?

First set up an online wallet at blockchain.info. You now have your own Bitcoin address!

Though I started with the Dwolla -> MtGox method, their system is currently hopelessly backlogged with new account signup verifications. They are the primary exchange (they do about 80%), one of the cheapest (only 0.6% in fees plus $0.25 from Dwolla), but they are also one of the most hated due to their inability to handle DDoS attacks and API lag.

My next suggestion would be to use Bitfloor. It's really easy. You just bring cash to a Bank of America branch, ask for an out of state deposit slip, fill it out with the information you get from LocalTill, and you're good to go. The fees are between 1%-4%. UPDATE: as of 4-17-2013 6pm EST, bitfloor suspended all trading and shut down their site. Their homepage says their bank account was closed.

If you want to buy when the banks are closed, use Bitinstant. You'll pay 3.99% + 0.6% (they use the MtGox api under the hood) + $3.95 ZipZap fee. When you fill out the form, select Wallmart or CVS (they are everywhere) to make your deposit (btw, this method lets you use a debit card), and have them send the coins to your blockchain.info wallet address.

You could also try the localbitcoins.com route, but I have yet to venture into that territory.

I don't know what will happen to Bitcoin.

My hunch is it won't be ignored and won't go away. If something better comes along which is easier to adopt, Bitcoin might suffer. I see that as unlikely, given the adoption it already has. The government has a FinCEN ruling on Bitcoin, so I don't think they will outlaw it (yet). I do see the network vulnerable to denial of service attacks. Many Bitcoin related sites have been attacked lately, and it appears to be getting worse.

There are a lot of risks.

There's also a potentially huge reward. And no, I'm not talking about the price per coin. I'm talking about a system completely outside of central banking control. A system that allows individuals to control their own money. A system that promotes freedom.

That's worth taking some risk. Some might say, it's worth fighting for.

Bitcoin: DO YOU SPEAK IT???

Bitcoin is something you should learn about.

Think it's just for nerds? Keep in mind, nerds created that thing called Facebook you probably use every day. Oh, and email. And the Internet.

Getting Started

www.weusecoins.com is a a great place to start. Go ahead and click through to the Questions & Answers section and read a few of those, such as "What is a good way to concisely explain Bitcoin?" As for getting started, I installed the original Bitcoin client mentioned there, but honestly, it's probably easier to create an online wallet at blockchain.info.

Once you have a wallet, what next? Well, I actually got started by looking at some of the "free Bitcoins!" sites. They are a huge waste of time, though bitvisitor.com did actually work (I think I got 0.00008 BTC by spending 5 minutes on a website). From there, I started doing more research about Bitcoin.

The Bitcoin wikipedia page is probably a good place to start and if you want to go deeper, dig into the Bitcoin wiki. If you're really, really brave, you can venture into #bitcoin on IRC, the bitcointalk.org forums or Bitcoin on Reddit. I'm actually really impressed with the community. They are primarily developers, cryptographers, hackers, day traders, and those interested in economic theory. Understanding Bitcoin can be tricky (try explaining mining in plain English... not easy to do).

You may be thinking, "This is some silly thing for hackers, thieves and black market users and will never turn into something I need to be concerned with." Well, a Wall Street Journey search returns a couple results and a Forbes search shows 80 articles on Bitcoin. There are already some real sites accepting it as payment (Reddit and Wordpress are two notable examples.) There are also quite a few stores accepting Bitcoin. There will be more in the future.

Recent Growth

So why did I get into it? Well... partly because of this:



I started looking at it when it was $17 per BTC and as of this posting, it's up over $34 per BTC. This all happened in about a month.

Could it be a big bubble? Sure. If you look back at the history, you'll see a HUGE dip in 2011.



(See http://bitcoincharts.com/charts/ for more awesome charts)

During that time, you can make a good argument for a bubble if you take a look at Google trends for "bitcoin":


But... that's not the whole story. The whole story includes a major hack of the primary exchange, mtgox.com which caused the price to drop from $17.50 to $0.01 on June 20th, 2011. They do about 80% of all exchange transactions, so the hack really hurt trust in the entire system. (Edit: it was pointed out to me that nothing actually traded at $0.01 as the hacked transactions were rolled back by Mt. Gox)

Scary to think your money could be hacked? Sure. But it didn't even need to happen. Bitcoin is a completely distributed system. There's no reason to leave your coins on an exchange. The Bitcoin system itself is strong and (apparently) robust. It survived.

This past month, I tested things out with a small purchase of coins at around $20 per BTC. Then another larger one around $27 per BTC. Then again at $34 per BTC. I did this by first putting money in my Dwolla account (5-7 business days) and then transferring to my mtgox.com account (1 day and I had to verify the account with a photo of a government ID). Could I lose my money if the price tanks? Sure. I wouldn't put more into it than I was willing to lose. That said, if I cashed out today, I could make some nice USD. Right now, I'd rather have the BTC. In the future, you might also.

How Does Money Actually Work?

Why could you want some BTC? Well, let's start with your local bank. Let's assume you're not the average American with $15k in credit card debt. Let's assume you actually have an emergency fund "safely" tucked away in your bank account.

Guess what? It's not actually IN your bank account.

Welcome to the world of fractional reserve lending. Banks create new fiat currency with the stroke of the pen as loans are created, and they use your deposits to do it. The bank only keeps a tiny fraction of what you deposit in their vault.

But that's OK, right? You're trusting the FDIC to protect your deposit. Sure. But with Uncle Ben Bernanke buying debt at $40B a month, how long before the USD has some more serious issues? The debt is spiraling out of control and the government can't do a thing about it.

I'm not saying anything new here. A lot of people I've talked to recently dumped their investments back in 2007 and moved to precious metals. I'm happy for them and somewhat sad I didn't do the same. Having worked at Dave Ramsey's for almost 4 years, the idea of buying gold hasn't really been in my thought process. Dave continually rips on those who buy gold. If you bought it in 1980 ($850, much higher if you adjust for inflation) and sold around July of 1999 (around $250), you'd probably agree with him. Over the past 100 years, gold appears extremely volatile compared to the stock market.

Some say it only looks that way because the USD is volatile and the actual buying power of gold has been quite steady for hundreds or even thousands of years. I'm not sure about all that, but one thing I do like about BTC is that I can buy a stick of gum with it. A single Bitcoin can be divided into 100 million Satoshis. For diversifying some of my savings, I like having a completely liquid and useful format.

Another interesting thing about gold is it can be faked with Tungsten. Private key encryption can't be faked.

So where will this go? Who knows. Some in the Bitcoin forums seem to believe it will go up quite a bit more. Others thought it was way overpriced at $10. If you believe the USD is headed for hyperinflation and the debt treadmill is about to breakdown... it might not be a bad idea to look into BTC.

Bonus: Learn About Fractional Reserve Lending and the Federal Reserve System

If you're curious about how I've come to my current thoughts on the USD, the Federal Reserve, and Fractional Reserve Lending, check out some of these videos.

These ones are actually cartoons, but they are easy to understand. I first found out about them a year or two ago.
Money as Debt 1 (0:46 hours)
Money as Debt 2 (1:17 hours)
Money as Debt 3 (1:02 hours)

A new friend turned me on to a book by G. Edward Griffin so I found this:
The Creature from Jekyll Island (1:47 hours)

This next one is long and rather poor production quality. I listened to it in the background while working. I liked how much it focused on the history of money.
The Money Masters (3:29 hours)
They also did a sequel which discusses some interesting symbolism in the Wizard of Oz:
The Secret of OZ (1:57 hours)

The part I really found interesting was on the Jewish Shekel. It was the only currency allowed to be used to buy animals for required Jewish sacrifices (all other currencies had pictures of pagan gods on them). The Shekel market got cornered and exploited. That's bad. So bad, in fact, Jesus got violently opposed to it and overturned the tables of the money changers.

I also thought it was interesting how TN's own Andrew Jackson fought hard to kill the central bank in America. Someone tried to assassinate him, but failed. Some say there are connections between the assassinations of Lincoln, Garfield, and Kennedy and their opposition of the central bank. Either way, those who control the money supply have a lot of dangerous power.

In addition to these and other videos, I've been turned on to some books and other resources. Interesting stuff indeed. It could all be a bunch of alarmist hogwash. Or, it could be yet another historical example of a fiat currency eventually coming to an end.

If we are in for a change, as with every other one in history, technology will play a role. BTC may be part of the story.

Please, don't make any investment decisions based on what you've read here. Do your own research and make up your own mind.

If you have any questions, please leave a comment below, and we can start a nice discussion.

---

Edit 2013-03-10: To keep this post fresh, I'll be adding some links to interesting articles I'm reading about Bitcoin. Also, since the prices mentioned here will undoubtedly grow stale, here's an image of the current price:
Recent Mainstream Articles of Interest:
March 4th The Guardian: Bitcoin: more than just the currency of digital vice
March 6th Business Insider: Suddenly, Everyone's Talking About Bitcoin...
March 6th CNN Money: Why cyber currency Bitcoin is trading at an all-time high
March 7th Business Insider: The Rise Of Bitcoin Teaches A Tremendous Lesson About Global Economics
March 8th Forbes: First Bitcoin Hedge Fund Launches From Malta
March 13th Bloomberg: Bob's Daily Buzzword: 'Bitcoin'
March 14th Huffington Post: Is Bitcoin Money?
March 18th Wired: Ring of Bitcoins: Why Your Digital Wallet Belongs On Your Finger
March 19th Forbes: New Money Laundering Guidelines Are A Positive Sign For Bitcoin
March 19th The Daily Dot: Venture capitalists take a chance on the "Bitcoin revolution"
March 21st Bloomberg: Bitcoin Fever: The World's Largest Online Currency
March 21st The Wall Street Jounral: Web Money Gets Laundering Rule
March 22nd Salon: A libertarian nightmare: Bitcoin meets Big Government
March 22nd Fox Business: As Cyprus Implodes, Bitcoin Interest Explodes
March 23rd ABC News: Cyprus Crisis Boosting Unique Currency, the Bitcoin
March 24th New York Post: Coin of the Net realm
March 24th Forbes: Cyprus Goes Cashless The Hard Way
March 25th CNN Money: 'Funny money' has officially entered the real world
March 26th Washington Post: Why reports of Bitcoin’s death may have been greatly exaggerated
March 26th Life Hacker: What Is Bitcoin and What Can I Do With It?
March 26th BBC Newsnight (video): Bitcoin on BBC Newsnight
March 26th The Motley Fool: A Short Guide to Understanding Bitcoins
March 27th International Business Times: Bitcoin Digital Currency Booming In Cyprus Amid Banking Crisis, Virtual Money Surging In Popularity
March 27th CNBC: Bitcoin Bonanza: Cyprus Crisis Boosts Digital Dollars
March 28th Business Week: Bitcoin May Be the Global Economy's Last Safe Haven
March 29th Fox News: Digital 'bitcoin' currency surpasses 20 national currencies in value
March 29th Huffington Post: Does the Internet Depend on the Survival of Bitcoin?
March 30th The Spectator: How Bitcoin could destroy the state (and perhaps make me a bit of money)

EDIT: Great new articles are coming out daily and it takes up too much time for me to add them here. If you want a good list of articles as they come out, check the Bitcoin forum press section.

Other "Fringe" Articles of Interest:
March 6th Falkvinge.net: The Target Value for Bitcoin is not Some $50 or $100. It is $100,000 to $1,000,000

Humbled at Spark Nashville

Last night I had the pleasure of attending Southern Alpha's Spark Nashville event. We had some great food, drank some good beer, and heard some fun stories of early tech days in Nashville from Marcus Whitney and Nicholas Holland. In addition, there were some fun pitches for various company ideas.

My primary reason for attending was to support my friends Jacques Woodcock and Jason Myers and hear their pitch for Sucratrend (which won the viewer's choice award, btw. I like to think my tweets and RTs helped).

Earlier in the day, when I mentioned I was going, I was amused at Jacques' reply:

@lukestokes wait, aren't you forbidden from such events or likely to burst into flames? cc @justwinston @ramsey
— Jacques Woodcock (@jacques_thekit) February 21, 2013

Jacques (and those who have read my blog and my thoughts on business and profit), knows that I'm not a huge fan of VC money when it comes to "startups". The main reason being, I like what I'm familiar with, and I've only ever bootstrapped. I'm also not a fan of debt (having worked for Dave Ramsey for almost four years). Giving away equity may not be the same thing as debt, but on the other hand it might be worse. But I won't get into that here. Different strokes for different folks.

For me, the event was a great success. I'm about to get vulnerable here, so cut me some slack. At times, I can be a little scatter brained (just ask my wife). Months ago, I distinctly remember asking my business partner about buying a ticket for Spark. He was totally on board and (in my mind), I bought a ticket with the company card.

As I was driving to the event last night, I started to second guess myself. "Why didn't I receive a reminder email from Eventbrite? I... did buy the ticket... RIGHT?" I'm ashamed to admit, I started using my phone while driving in the rain to check my email.

Nothing.

Now I'm starting to feel like an ass. I happened to see this tweet earlier in the day and started to hope:

Nashville - I've got a couple extra tickets to the sold-out #Sparknashville tonight.DM me if interested.
— Tara Aaron (@tara_aaron) February 21, 2013

Guess who greeted me at the door? Before I could even finish my sob story of stupidity, Tara was already pulling out a ticket for me. How awesome is that? Big shout out to Aaron Sanders Law Firm for hooking me up. If you're doing anything in the tech space, please give them a call. They are extremely helpful, friendly, and awesome. They just might change your opinion of lawyers and best of all, they LOVE the technology space.

The night just kept getting better. Everywhere I looked I saw friends and smiling faces. I even got some compliments and words of encouragement about my involvement in building cool stuff and being part of the community. Someone even recognized me from a Barcamp and wanted to say hello. It was kind of surreal.

After the event, I had a great time hanging out with some friends old and new and talking everything from Agile development methodologies (Brendan Wovchko is amazing) to women in tech to RV living.

Another topic that came up (and seems to come up a lot in Nashville for some reason) had to do with the difference between those who are doing great things and those who just seem to be talking a lot. Need an example?

John Wark. Now there's a doer. He stopped complaining about not enough tech talent in Nashville but instead created the Nashville Software School to build some.

I won't give examples of talkers because everyone seems to have a different opinion of who those people are in the community and those judgements are probably unfair anyway. Let's take a different approach. Instead of talking a big game (or ridiculing those who do), let's humble ourselves, help those around us, and get stuff done.

Don't seek out recognition. If what you're doing matters, that will come when it's due.

But when you are invited, go and recline at the last place, so that when the one who has invited you comes, he may say to you, 'Friend, move up higher'; then you will have honor in the sight of all who are at the table with you.
- Luke 14:10

Whoever exalts himself shall be humbled; and whoever humbles himself shall be exalted.
- Matthew 23:12

I'm Not One of the Cool Kids; We All Are

This past weekend I had the privilege of attending (and sponsoring) the first ever SunshinePHP Conference in Miami, FL. I must say, Adam Culp did an amazing job organizing and executing this event. Every moment I saw him, he had on is his regular friendly, beaming smile. I've never seen a conference coordinator so relaxed! On top of that, from what I understand, his only staff was the ever moving Pablo Godel.

Great job, Adam! You certainly made it look easy (and we all know it was anything but). Among everything you had to coordinate, you somehow found time to drive Paul, Matthew and I to dinner the first night. You even let me borrow your laptop for my talk! Your willingness to serve those around you is phenomenal.

I loved hanging out with great friends and making some new ones. I also finally took advantage of the "hallway track." I didn't attend a session during every single slot. Instead, I slowed down a bit and hung out with guys like Keith, Cal and Joe. I met the creators of the tools I use every day including Sebastian Bergmann (PHPUnit), Jordi Boggiano (Composer), Fabien Potencier (Twig, Silex... if you don't know all the things he's done, you probably don't use PHP)... I could go on and on. It was amazing.

Oh, and did I mention the guy who started this whole PHP thing (Rasmus Lerdorf) gave the opening keynote? That was epic. I really enjoyed the history lesson and the "why" behind the decisions he made (which actually made sense at the time in 1993).

Just asked @rasmus for advice on how PHP devs can "defend" it against sexy languages. He said we shouldn't bother. 78.7% adoption. #ssphp
— Luke Stokes (@lukestokes) February 8, 2013

(If you're wondering where that stat comes from, you can look into it yourself at w3techs.com)

So on to the point of my post... as I was meeting and listening to these giants of the industry, schmoozing with the "cool kids" during the hallway track... I began to realize something.

There are no individual cool kids.

We're all the cool kids.

I got some really encouraging feedback on my Hypermedia API talk from people I previously thought were on another level. As I was meeting speakers in the hallways, I realized many of them do "the conference thing" quite a bit. They are conference regulars and are sought out to speak all over the world. They are what I had always thought of as "the cool people" when I was simply a "regular" conference attendee.

For a half second, I began to wonder if someone might think of me as "one of those" now that I've given this talk a few times. It was a humbling thought. I don't think of myself as someone special in the programming community. Other than helping start an ecommerce company, I haven't contributed much (yet).

It was then I realized a speaker isn't more or less special or cool than anyone else. We're all building and doing amazing things, and we're all on different stages in our journey. Whether you're just learning to code, or you've been doing it for years and contribute to the tools thousands of people around the world use every day: You are what makes the PHP community great.

As Cal said so well in his keynote, you are awesome.

Even if you don't feel like an expert and just started using PHP last week, guess what? You're probably an expert on what it feels like to use PHP for a week. Everyone has something to offer, and everyone contributes to the awesome PHP community.

So go build something awesome! As Keith so eloquently put in his keynote (I'm still thinking about the ideas he put out there), don't build a copy of something crappy thinking you'll hit the next gold mine. The next dating site? The next photo sharing app? The next Facebook? That's about as practical and as likely as a unicorn farting rainbows and pooping lucky charms.

Related note: When a friend like Keith looks at you with that "I'm up to no good" smile and says "I updated my slides", be afraid. Be very afraid. (If you missed his reference, we included this sticker in the sponsor bag which is from an image we built out for our 404 page)

Thank you @stickerobot for delivering awesome! Our rainbow unicorn has been a big hit @sunshinephp #ssphp twitter.com/foxycart/statu…
— foxycart (@foxycart) February 9, 2013

In summary, the conference was amazing. The people in the PHP community are amazing. And as Larry Garfield quoted in the OOP panel discussion, "You are not a beautiful or unique snowflake." Whether you're a speaker or not isn't as important as being part of the community and helping make it better. Attend your local PHP group this month and help them out. If you didn't make it out to SunshinePHP this year, plan on it next year. While you're there, come find me and say hello.