Jessie has some old computers and he wants to know if it would be worth it to put them to work bitcoin mining. Leo says as time goes on, it keeps getting harder to generate bitcoin, because miners need a lot of horsepower and electrical power to do it. The amount of energy that it would take to create one bitcoin would be more than bitcoin is currently worth.
Mike's Coinbase Bitcoin wallet has a corrupted IP address to it and he's worried his wallet has been hacked. Leo says he can't have two IP addresses on an account. Leo says that the ISP may be at fault here and Mike should log into his Coinbase wallet and make a screenshot of the error messages. Then he should contact his ISP and show them the evidence. They need to fix it. Leo also says he should change his Coinbase password just in case. It's possible something nefarious is afoot.
George keeps hearing about BitCoin and how much the price keeps going up. What gives it that value? Leo says nothing but sheer belief. BitCoin is crypto currency, which are essentially digital dollars that don't exist outside of a computer. You can't really take it and spend it at the local store unless the store takes it. But even a dollar bill isn't really anything but a fiat currency that the government says it's worth. The value of a dollar, or any other currency, changes all the time. It's fluid. So BitCoin is just an extreme version of that.
Elia wants to know what Leo thinks about online currency, or crypto currency. Leo says to understand crypto currency, you have to understand how monetary systems work. Paper money represents the value it carries, but it isn't gold. It's called a "fiat currency." In the case of our dollar, it's backed by the government. But currencies don't have to be official government currency. "Disney Dollars" are currency at Disneyland.
Dale has invested in BitCoin, but he forgot his password. He requested it from CoinBase, but now Google Authenticator won't work. Coinbase's support is overwhelmed so he can't get in. So what can he do? Leo says that Bitcoin is rampant with fraud and that's why the Google Authenticator is used. But it may be that his account has been hacked. He may just have to be patient in contacting Coinbase to get them to reset it. But he shouldn't have an authenticator to reset a password.
With a current value of over $14,000 per, Bitcoin has skyrocketed in value in the last month, but has also dropped dramatically in the last few days. Leo says the Bitcoin craze reminds him of the Holland Tulip Craze of the 1600s, where tulips became all the rage, prompting people to even offer land for a single tulip bulb. Bitcoin is just like that.
Using basic social engineering skills, hackers have managed to use the data on cell phone bills to get customer service reps to move service to a set up mobile phone, and then use that to get into CoinBase through 2 Factor Authentication. As such, one hacker stole 8,000 BitCoin from a user named Cody. Read the full article here.
Bad news from the realm of crypto currency. According to BitCoin developers, the notion of Bitcoin is dead, as it is controlled by "Bitcoin" miners and many exchanges have gone under.
Sarah wants to know about Bitcoin. Leo says that Bitcoin is just like paper money, in that it's a "fiat currency." But the danger is that it's not backed by the US government (even though they will take it as payment). The main thing to understand is that a bitcoin wallet is the only place that bitcoin lives and if someone steals that wallet, it's over. So it should be backed it up. It's a challenge to make money with it, and it's wildly speculative. That's why Leo doesn't recommend investing in it. But it's an interesting way to pay people online.
Bitcoin's Satoshi Nakamoto found, and his name is...Satoshi Nakamoto! Reporters from Newsweek Magazine claim to have found the Satoshi Nakamoto, the founder of Bitcoin, and he's been hiding in plain site in Southern California. Some believe it's a made up story and can't believe that a man who was obsessed with privacy enough to create an anonymous digital currency would keep his own name. Leo says that Nakamoto is in hiding and may be at risk since the last president of BitCoin was found dead in Singapore. Other BitCoin companies have been going bankrupt due to theft.