This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stick to Gold, Not Bitcoins

NEW YORK (TheStreet) -- How cool would it be to set up your own printing press and start making real money that people are happy to take for goods and services? If that sounds too good to be true, you're only partially correct.

The U.S. Secret Service is charged with protecting the President and the currency. It doesn't have a sense of humor when it comes to counterfeiting Federal Reserve Notes (aka dollars), but it is happy to stand by and watch you data mine "blockchains"  -- a serial number-like code used to demonstrate authenticity of bitcoins.

Since bitcoins aren't born on paper and are math-based, computers are used to "mine" the bits, with increasingly more difficulty until all the possible combinations are found. For technical reasons that go beyond the scope of this article, you can use your computer in an attempt to mine, but your computer's central processing unit (CPU) is probably too slow to find any.

Speed is of the essence because like any real gold rush of days gone by, it's first-come, first-service. Miners use special faster number crunching graphics processing units (GPU) instead of CPUs to gain a speed edge. You can find many "Picks and hammer" mining sellers on eBay (EBAY) and Amazon (AMZN).

Before you break out your Capital One (COF) Visa (V) card and buy mining computers costing thousands of real dollars (along with a miners cap for good luck), keep in mind that the electrical cost of operating mining computers may exceed the value of bitcoins mined. Of course, it depends on your computing costs and the electronic currency's value, but don't expect to get rich if you're just starting out now.

While some have become rich (at least for now on virtual paper) as discussed in my previous bitcoin piece, bitcoin's greatest attraction is the ability to buy and sell products that aren't legal. Users "think" that if they are using bitcoins as a payment method that their transactions aren't traceable. In theory, that may have validity, but in practice, unless you're the type that is diligent and willing to launder your bitcoins, it may be more difficult, but far from impossible. Besides, the weak link is rarely the technology, it's the people using it.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs