Coinye West to take on Bitcoin

Posted by Josh Conibear in Personal Finance on 9 January 2014 - Josh worked as a Credit Analyst at checkmyfile until 2014

Following the Bitcoin craze comes a Kanye West inspired currency with the name of 'Coinye West', due to be launched on 11 January.

So what do you get when you cross the world’s most dynamic virtual currency with the planet’s "No.1 living breathing rock star"?

Although the company behind the launch of the virtual currency is heavily utilizing Kanye's distinctive image, the R&B singer has not in any way endorsed this collaboration. But the secretive group of financiers behind the new currency has offered Kanye 100,000 Coinyes, which is sure to be a luring incentive for the multimillionaire rapper.

Coineye follows in the footsteps of Dogecoin and Litecoin, all of which wish to cash in on the Bitcoin ideal; especially after the value of a single Bitcoin peaked at over £600 in November last year, and is currently floating at around £520.

Bitcoin is often referred to as a new kind of currency, yet it may be best to think of its units being virtual tokens rather than physical coins or notes. Like all currencies, its value is determined by how much people are willing to exchange it for.

To process Bitcoin transactions, a procedure called "mining" must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution. For each problem solved, one block of Bitcoins is processed. In addition the miner is rewarded with new Bitcoins, providing an incentive for people to provide computer processing power to solve the problems.

To compensate for the growing power of computer chips, the difficulty of the puzzles is adjusted to ensure a steady stream of about 3,600 new Bitcoins a day, meaning that there are currently around 11 million Bitcoins in existence.

To receive a Bitcoin a user must have a Bitcoin address - a string of 27-34 letters and numbers - which acts as a kind of virtual postbox to and from which the Bitcoins are sent.

Since there is no registry of Bitcoin addresses, people can use them to protect their anonymity when making a transaction.

These addresses are in turn stored in Bitcoin wallets which are used to manage savings. The wallets operate like privately run bank accounts - with the proviso that if the data is lost, so are the Bitcoins owned.

The whole idea of virtual currency has proven to be profitable. In one case, the original developers launched on obscure websites, but when taken mainstream, and the price spiked, they sold up and disappeared. Estimated earnings in one instance were £700,000."

Coineye's new official website promises a "proper and fair" currency launch and a script-based algorithm that will "[fire] shots at Bitcoin". Its inventors insist it's not a joke and say their aim is to make the new virtual currency easy to use.

Coinye's creators plan to court the music crowd too, saying, "I can picture a future where Coinye is used to buy concert tickets, with cryptographically verified virtual tickets. Bitcoin started small too, and now look where it's at."

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