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.
More important, for bitcoin to move out of the legal dark shadows it needs to gain widespread acceptance. Up until now, acceptance hasn't come easy. Apple (AAPL) reportedly hasn't warmed to bitcoin. It's not easy for me to imagine any desire by Apple to associate its brand with a virtual currency that's most redeeming quality is skirting around the law.
Without Apple's blessing, which doesn't appear to be forthcoming soon, the ability to attract people other than speculators may prove challenging. It's not difficult for speculators on a global scale to produce an eye-popping bubble, but preventing the subsequent crash is an entirely different discussion.
The demand for an alternative storage of wealth is fading fast. Two of the most significant inflation indicators, SPDR Gold Trust (GLD) for gold and United States Oil Fund LP (USO) for oil, are trading lower from two years ago. I don't think bitcoins are a reasonable investment after factoring in the real risk of price implosion.
For those that want to stay under the government's radar, bitcoin may make sense. Otherwise, if you're worried about the dollar, look at gold as a safer long-term investment.
At the time of publication, Weinstein had no positions in securities mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.