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Top 8 Ways to Reduce Packaging Costs – Corrugated Shipping Boxes

Everyone in a shipping room uses shipping boxes to ship out their products. Whether you are just setting up a new company and are looking for the lowest cost packaging or you are an established manufacturer this article was written to help you reduce your packaging costs, specifically how to reduce your corrugated box costs.

1. Check your box sizes to make sure they fit the product they are protecting and shipping. A good general rule for protection is 2″ around all products. If you are using a box that requires a lot of stuffing (more than 2″ all around) you might find a smaller stock shipping box. Since most packaging supply companies have over 100 stock box sizes chances are you can find the appropriate size.

2. Choosing the correct box design and style. A good rule of thumb in corrugated boxes is “Deeper is Cheaper”. If you can configure your box so that it opens on the smallest dimensions and the largest dimension is the deepest, this allows for the least amount corrugated to be used to produce the box. And thus “Deeper is Cheaper”. There are many box style available. The Standard RSC style shipping container is the most common, but if you have a long narrow product a Five Panel Folder or FOL might work better and may be manufactured using less corrugated. Check with your corrugated supplier as to the alternatives.

3. Make sure you are using a box that is rated (not overkill) to transport the amount of weight that you are packaging. There are many grades of corrugated. Corrugated grades ranging from “non-test” grade to over 1300# Triple wall are all common. Consult your packaging professional for the proper board strength for your product.

4. Industry Knowledge can be invaluable; knowing when prices of paper and paperboard go up and down can allow you to better negotiate with your corrugated supplier. Use sources like Pulp and Paper magazine, available online to gather industry news and paper pricing. When the paper price has gone down, ask for better pricing will save you big money on shipping cartons. If paper goes up your corrugated supplier should notify you and give you the ability to pre-buy before the effective price increase date.

5. Change or Shop corrugated suppliers to create some competition. The internet is great for shopping for retail products, but not so for industrial products. You still need to find good local companies and have them quote your corrugated needs. You want to be the customer that the box salesperson knows will shop pricing at the mere mention of a price increase. Business relationships do exist, but friendly competitiveness goes a long way to keep your packaging costs down. Plus introducing a second vendor allows for a back-up supplier and a fresh set of eyes on your process. Many times savings can come in the way of a changed packaging method or box size.

6. Change your box to reduce your Shipping Costs. I know this does not exactly come under the “saving money on your shipping boxes”, but if you can reduce the weight of your box by changing how you package that can reduce your single shipment costs. Also changing the box size to allow for more of your product on a pallet can increase the total product shipped and in full truckloads or even LTL this can reduce your freight per product.

7. Buying larger quantities of custom corrugated boxes per order can reduce your box cost. Most corrugated box manufacturers sell converted boxes by the square foot of corrugated per run. Square foot price breaks can be as significant as a 20% reduction moving from one square foot board break to the next. Always have your supplier quote you board breaks. If you are looking to order between 1000 and 2000 boxes, ask for the board breaks in-between those quantities. Many times you will find a quantity of 1200 will give you a 10-15% reduced cost over a price for 1000 boxes.

8. Just in Time inventory and blanket purchase orders for a period of usage. Many packaging distributors will stock your custom boxes for you on a “blanket Purchase Order agreement” and release the boxes as you need them. This will allow you to purchase a larger quantity (usually at a lower cost) and receive boxes as needed. This should lock you in at a lower price and let you keep your cash flow and inventory the same, as you should only pay for the boxes as you receive them.

Using the above techniques with a good corrugated consultant can result in major packaging cost reductions. This was specifically written for anyone who is looking to reduce packaging costs. I hope this article has provided ideas to reduce your packaging and shipping box costs.

Warning – Counting Money Can Make You Sick!

Yes, I said counting money can make you sick, literally. Money is filthy and could really use a good laundering. Studies have shown that a majority of US Bills are contaminated with cocaine. Drug traffickers handle the bills and drug users roll bills into straws to sniff cocaine. The ATM machines are contaminated with the drugs on their rollers and brushes and spread the drugs to other bills.

A 2002 report in the Southern Medical Journal showed found pathogens – including staphylococcus – on 94% of dollar bills tested. Paper money can reportedly contain more germs than the average household toilet. Paper bills are a favorable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can sustain a live flu virus for up to 17 days. It’s enough to make you sick!

My mother used to say, “Don’t put money in your mouth. It is dirty!”. She was so right. Coins are even dirtier than paper money. Just look at your hands after counting coins or playing a slot machine and you’ll see the grimy proof. Coins pass through many hands before they get to you. They are never cleaned or washed. They are sometimes stored in pockets with used tissues, in kids shoes and in many other strange places. You never know where a coin has been before you handle it.

If you have a business that handles cash, you need to use electronic means to count and sort your paper bills and coins. Manually counting and sorting currency and coins means handling the cash several times and the subsequent exposure to any germs, narcotics or other contaminants on the money. Automatic counting is faster, more accurate and cleaner. As an added bonus, since it is nearly impossible to identify counterfeit money manually, the electronic bill counter can catch any fake bills as well.

Electronic bill counters and coin counters are readily available and come in all sizes and speeds to match your business needs. You can buy a good reliable counter for as little as a few hundred dollars or as much as several thousand, depending on the needs of your specific business. It is easy to determine the cash-counting needs for your business and to match those needs with the appropriate machine. It is not a major investment and is a business tool that can easily pay for itself in time and accuracy, as well as protecting you from those pesky germs!

Importance Of Training And Development In A Firm

Training and Development is the framework for helping employees to develop their personal and organizational skills, knowledge, and abilities. The focus of all aspects of Human Resource Development is on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers.

All employees want to be valuable and remain competitive in the labour market at all times. This can only be achieved through employee training and development. Employees will always want to develop career-enhancing skills, which will always lead to employee motivation and retention. There is no doubt that a well trained and developed staff will be a valuable asset to the company and thereby increasing the chances of his efficiency in discharging his or her duties.

Trainings in an organization can be mainly of two types; Internal and External training sessions. Internal training involves when training is organized in-house by the Human resources department or training department using either a senior staff or any talented staff in the particular department as a resource person.

On the other hand External training is normally arranged outside the firm and is mostly organized by training institutes or consultants. Whichever training, it is very essential for all staff and helps in building career positioning and preparing staff for greater challenges.

Employers of labour should enable employees to pursue training and development in a direction that they choose and are interested in, not just in company-assigned directions. Companies should support learning, in general, and not just in support of knowledge needed for the employee’s current or next anticipated job. It should be noted that the key factor is keeping the employee interested, attending, engaged, motivated and retained.

For every employee to perform well especially Supervisors and Managers, there is need for constant training and development. The right employee training, development and education provides big payoffs for the employer in increased productivity, knowledge, loyalty, and contribution to general growth of the firm. In most cases external trainings for instance provide participants with the avenue to meet new set of people in the same field and network. The meeting will give them the chance to compare issues and find out what is obtainable in each other’s environment. This for sure will introduce positive changes where necessary.

REASONS FOR EMPLOYEE TRAINING AND DEVELOPMENT:

The reasons behind employee training and development cannot be overemphasized. From our discussions so far, one can easily deduce some reasons behind firms engaging in training and developing their staff. We will summarize some of the reasons thus;

When needs arise as a result of findings from the outcome of performance appraisal.

As part of professional development plan.

As part of succession planning to help an employee be eligible for a planned change in role in the organization.

To imbibe and inculcate a new technology in the system.

Because of the dynamic nature of the business world and changing technologies.

SOME TOPICS TREATED IN EMPLOYEE TRAININGS:

Communications: The increasing diversity of today’s workforce brings a wide variety of languages and customs, thus staff should be able to be very good in both written and verbal communication.

Computer skills: Computer skills are becoming a necessity for conducting administrative and office tasks. In this era of technological advancement, computer skills are very necessary for almost of departments in an organization.

Customer service: Increased competition in today’s global marketplace makes it critical that employees understand and meet the needs of customers. The firm that stands out from the crowd is that firm that puts its customers first before every other goal. Then the need to always train staff on customer service.

Diversity: This includes explanation about people and their different perspectives and views, and how this can be handled.

Ethics: There are divergent ethics in different firms. Some firms attach more importance to certain issues like moral, work period, lateness etc than other issues. Today’s society has increasing expectations about corporate social responsibility. Also, today’s diverse workforce brings a wide variety of values and morals to the workplace. This calls for the need for staff to be reminded of these always through training and development.

Human relations: The increased stresses of today’s workplace can include misunderstandings and conflict. Training can help people to get along in the workplace with good understanding of each other and the office inter personal relationship to reduce official conflict.

Quality Management: Initiatives such as Total Quality Management, Quality Circles, benchmarking, etc., require basic training about quality concepts, guidelines and standards for quality, etc.

Safety: Safety training is critical where working with heavy equipment, hazardous chemicals, repetitive activities etc. Staff should be made to understand that despite the fact that they have a safety department, the safety of each staff is in his /her own hands.

BENEFITS OF EMPLOYEE TRAINING AND DEVELOPMENT:

Increased job satisfaction and morale among employees.

Better inter personal relationship and customer satisfaction.

Increased employee motivation.

Increased efficiencies in processes, resulting in improved financial gain.

Increased capacity to adopt new technologies and methods.

Increased innovation in strategies and products.

Reduced employee turnover.

Enhanced company image.

Better Risk management and staff safety consciousness.

Increase in productivity.

Performing Due Diligence When Buying a Liquor Store

The process of due diligence goes way beyond just an assessment of the presented financials. You need to be able to access all the files and records, review information and research personnel as you review what you’re being told. It is recommended that you allocate at least four weeks for this process and do not be tempted to rush to judgment. Some issues may only come to light over a period of time and thus you should proceed carefully.

There are some decisions that you can make about buying a liquor store business before you immerse yourself fully in the due diligence process. While you may engage in a lot of number crunching and foot work as you go forward, is there anything that you have learned about the industry to this point, or about this specific business, its location or its owners thus far that should give you pause for thought? If for example you already know that financial records are incomplete for reasons given by the seller, or the condition of the store or its assets are not as you had hoped or expected, inventories are incomplete, inspections, certificates or licenses are compromised for one reason or another – all may be reasons for you to turn around and bid good day.

For a process of due diligence to be complete, you will need to concentrate on seven different areas:

1. The Premises.

We’ve already talked about the need to allocate four weeks to this entire process and you should agree with the seller that during this time you allocate an agreed period to observe the operation of the business. Firstly you will need to assess the inside and outside of the facility and work out what you may need to spend to repair, replace or upgrade. Remember that the attitude of the staff is very important in the retail business and you should immediately assess how the existing staff interact with clients. Are they always personable, attentive, prompt? Personal issues or conversations should not be apparent. Ask yourself whether the store looks good, has a good ambience, appears fresh and clean, has well-maintained restrooms and break areas and is generally spick and span.

You must also really make sure that you’re pleased with the specific location of the business, the surrounding competition, the kind of individuals who regularly frequent the area, the accessibility – and don’t forget, always be particularly aware of any possible or pending major road construction in the area, as this could literally “make or break” the business you’re considering buying.

2. The Financials.

As a minimum, you will need to review the profit and loss statements, the balance sheets and tax returns. You would do well to employ the services of an accountant who is experienced in the liquor business to help you here. Look at all the supplier invoices and reconcile them to revenues. This may be a time intensive process but you will be able to determine your margins this way. Be very aware of any transactions that involve cash, especially if it involves your suppliers. You will need to get written confirmation from the suppliers of their ongoing terms.

Remember some of these industry benchmarks:

– gross margin should be between 24 and 28%

– rent should be 7% of revenue maximum

– product mix should be up to 70% liquor or up to 40% wine

– labor should represent 5 to 7% of revenue

– net profit should be 8 to 12% of revenue

– inventory should be turned over between eight and 10 times per year.

3. The Equipment.

All of the equipment and the furnishings should be in good working order, and nothing should require repair or replacement for quite some time. To ensure this, you should carefully review all of the maintenance and service records, take a look for yourself to check and see if each refrigeration case is clean and well-maintained, and inspect all the other equipment to make sure it’s well looked after.

4. Vendor Agreements.

Your wholesalers and suppliers are absolutely essential when you purchase liquor store business assets and you must get to know them well during your due diligence. Can arrangements be transferred to you or will you have to make new ones? You do not have to be prepared to settle with the existing suppliers or vendors and you should really investigate as many options or opportunities as you can. You may, for example, see better terms elsewhere and this knowledge will be great ammunition when you come to negotiations and peace of mind.

5. Lease Contracts.

Always be sure the lease is transferable or that there are no obstacles ahead of you. You must be able to assume or acquire a long-term lease before proceeding.

6. Operations.

It is likely that you will need a number of licenses and this should be a particular area of concern when it comes to a liquor license. Sometimes these may not be assigned or transferred or other onerous terms may be set by jurisdictions.

Go through the daily procedures from opening time to closing time; who has access to keys and alarm settings? Does the business have a procedure for emergencies of any kind? Ask the seller to provide you with an optimal inventory level. Ensure that you review all insurance certificates and be adequately covered for all eventualities. You will need to talk with credit card processors and merchant banks and be prepared to move to access better rates if necessary.

7. The Employees.

As this can be a significant cost and liability area, be focused here. Check each member’s compensation, especially if there’s any possibility of cash being paid “under the table.” If you see that there is a high turnover of employees, ask yourself why. Is there a procedure in place for training? While the seller will often be wary about letting his employees know that the sale is in process, you nevertheless need to analyze each employee individually, assess their loyalty and competence and adjust your plans accordingly. Understand that certain procedures may be quite traditional to them and you should ask yourself how you feel they will react if you need to make significant changes. If one or more employees are absolutely critical to your success, you will need to meet with them prior to consummating a contract.

When you come across a liquor store for sale, if you perform your due diligence to a very high standard, you’ll acquire the opportunity to see exactly how the business operates – on a daily basis, and you won’t be in for any uncomfortable surprises if you do decide to take over.

Paint Jobs – How Much Does it Cost to Paint? Estimating Paint Jobs

Nobody wants to work for nothing, but many painting businesses do when they don’t charge for all the things that are part of each job. If you intend to do a complete job, and your customer is asking for a complete job, then you should be charging for a complete job. Leave something off of the estimate and you are working for nothing. Doing a complete and thorough estimate involves everything that takes time whether it be screwing that switch plate cover back on or painting the altar in that church. Many painters brag about what they describe as an almost mystical experience, like walking into a room and a price comes into their head. I never liked that because it is inaccurate, lazy and likely to end up poorly, at best you will just miss something and work for nothing on that part of the job. Another reason why this lump sum magic is bad is that someone is always surprised when the customer finds something that wasn’t done and they thought it was part of the job. And they tell you do it or don’t get paid. I talk about this when I discuss the Proposal itself.

Setup – Whether it be driving 100 miles to the job or 2 days setting up scaffolding or 20 minutes unloading drops, ladders and paint, it is part of every job. And because it is part of the job it is included in the cost of the job and needs to be estimated. Some thought should be given to special circumstances as mentioned above, or keep a percentage to use as a formula for each job. For example: if you are scaffolding out that church steeple to scrape and paint, then you need to figure everything involved with this stage including take down. This type of setup is likely to be much more costly than the actual paint job. Whereas painting the interior of your average customers home can be done room by room as a percentage of the total hours. For example: if you are dropping out a room, removing switch plates, moving furniture, etc. Then an easy way to do it is to take the total hours painting and multiply by.1 or.2 or whatever you think is an average time. Estimating setup, prep, and cleanup as a percentage on average jobs saves time when estimating.

Preparation – Lots of times this costs way more than the paint job. For example: we did a paint job on a big 1840’s wood clapboard monster of a house. 15 weeks removing paint before one drop of paint went on the house, the painting itself was about 3 weeks. Not only time but lots of sanding disks, respirators, disposable coveralls, cleanup daily, and removal of all dust and chips was all a big deal because of the size of the job and because of the old lead paint. The opposite is the average home interior that can be estimated like the setup example above using a percentage. Most of the time interior prep is just small surface repairs, and some caulking, the stuff that is the same from job to job. Special repairs or problems should be itemized.

Painting – What amount of time does it take to paint 5 wood casement windows on ground level without a ladder? How much time does it take to paint those same 5 windows at 40 feet on a hill when each window is 8 feet apart? Probably more than 2 times what it takes to paint the ones on ground level, each time moving and setting up the ladder on uneven ground most likely involving 2 people to move and setup the ladder for each window. So an easy formula to use on heights above 25 feet would be 2 times or 2.2 times or whatever the time it takes to paint the same window without ladder. Most of the time estimating painting costs can be done with a formula that works pretty well from job to job.

Cleanup – This part of the painting job is likely to be glossed over or ignored from an estimating position. This is a big mistake because it can take more time that the actual painting, depending on the job. If this part of the job is not done well the client may view the entire job as poorly done. And if done really well it may just put the crowning touch on the job. Estimating the time to properly cleanup after each job is critical to your estimate. If you short this part of the estimate, by not allowing enough time, then something has to give and the outcome is likely an unhappy customer. Average jobs can use a factor to estimate time. Example, an 8 hour interior job can be cleaned up in 8 hours x.1 =.8 hours.

When I watch some of these “home remodeling” shows blow through the painting as if it is nothing, I laugh but then I think how much ignorance they create. When Norm does his woodworking magic it is an event to behold; but, when Carlos spends 3 hours vacuuming, dusting and cleaning windows after a paint job, it is nothing, it is not even mentioned. Some many home owners tackle paint jobs and are totally clueless as to what is really involved. Like the time when we were called in to touch up walls in this multi-million dollar mcMansion following a $25,000 audio system wiring job where the technician cut holes in 11 different rooms. Each room had a different color, so we cleaned rollers, brushes, cut buckets etc. after each color. The owner gave me a big argument about charging her for the time to clean our tools. If it is part of the job and you wouldn’t be doing it except for their job, then they should be paying you for it.

Data Processing – What Are The Advantages Of Business Data Processing?

Data Processing is a process of organizing and controlling the large amount of information. It is helpful to manage the important information in synchronized manner. Business data processing includes processing data of accounting, marketing, manufacturing and other department. Business owners are wondering why they should have processing services for their business. What are the advantages of business data processing?

Below mention are the advantages of business data processing:

Reduced Paper Work: It is the one of the advantages of processing information. It helps organization to cope with increased problem of paper management and handling. Information is available digitally so there is no need to search through bunches and get particular file.

Easier Report Making: You can gather processed facts and figures in very little time and arrange such in appropriate manner that helps executives in making quick analysis. There are also pre-defined reports that help professionals in making reports quickly and easily.

Promptness with Accuracy: Digitalization helps in processing the information quickly. You can go through thousands of file in a minute and fetch the required file promptly. During business data processing, the system checks and manages the invalid data or errors. Such process helps companies to ensure high accuracy in converted and processed information.

Cost Reduction: The cost of processing is much lesser than the cost of managing and maintaining paper documents. Organizations also decrease the cost of stationery such as photo copy and mailing by using digital information and email system. Companies can save millions of dollars every year by having such a good facility.

Improved Performance: The performance of staff is the base thing for any organization to improve the profitability. Companies can increase the efficiency of personnel by offering them facilities and ease in work. Business data processing can help the professional through quick searching facilities and easy analysis system.

Storage and Easy Configuration: Drastically increase the storage space for adding, managing and modifying information. It is very easy in configuration because there are numbers of options are available in system to make your task easier.

These are some of the advantages of business data processing. Companies can reduce the man power for non-core activates, improve the security and safety of information.

Smart Bitcoin Strategies To Accumulate Gold Bullion

I have heard about bitcoin a couple of years back in 2013 and never expected it to grow into a strong cryptocurrency it is today. At the time of writing this article, it is trading on the market at a value higher than gold. This opened a window to many possibilities for me, as I’m already within the market to accumulate this digital currency and gold bullion on a daily basis.

With my experience, I gained knowledge and developed methods to use this cryptocurrency and build a wealth wheel of acquiring gold on a continuous basis using its power.

The following points are methods I use to accumulate bitcoin and gold bullion.

  • Find a company that sells gold bullion
  • Open an online bitcoin wallet
  • Start mining bitcoin online or offline
  • Purchase gold bullion with bitcoin

The above are the basic steps to accomplish the process and it requires specific methods to make it successful. In my opinion this is the best bitcoin strategy to accumulate gold and get it delivered to your doorstep every single month.

Find a company that sells gold bullion

There are many online companies on the internet that sells gold bullion, but there are very few that offers incentive programs once you become their client. You need to look for a company that offers much more than only selling gold bullion. This company needs to offer quality products, such as selling gold bullion in small sizes of 1 gram, 2.5 gram and 5 gram. The gold itself must be 24 karat gold, which is the highest quality you get. The incentive programs needs to allow you to earn commissions once you refer people to the company.

Open an online bitcoin wallet

You will need a place to store your bitcoin once you are ready to get started within the cryptocurrency market. There are many online bitcoin wallets available to the public free of charge. Look for a company that offers a wallet to store bitcoin and an offline vault to protect it. There are many hackers trying to break into the wallets of online users and steal all their bitcoin. If you store your bitcoin offline, you will never be a victim of online hackers.

Start mining bitcoin online or offline

There are two main ways to get bitcoin. Mine bitcoin online or offline. To mine bitcoin online is very easy and much simpler than offline methods. I personally use both methods to test the profitability for each. By joining an online bitcoin mining farm would be a great way to get started.

You need to be very cautious on this option as well, because there are thousands of scammers claiming to have bitcoin farm, but in fact does not. These guys create Ponzi schemes and will only steal from you as much as they possibly can. There are also trusted and real companies that has bitcoin farms operating every single day that I personally use.

You can also mine bitcoin offline by purchasing a bitcoin miner, which is computer hardware that you set up at your home. This hardware then gets connected to the Internet and will start mining bitcoin. This bitcoin will then automatically be sent to your online bitcoin wallet.

Purchase gold bullion with bitcoin

Now that you have bitcoin coming in on a daily basis there are very specific ways that needs to be followed to purchase gold bullion from the company you chose. You need to link your bitcoin wallet to a visa card. This card must also be offered to you from your bitcoin wallet company that you chose. Use this card to purchase gold bullion at any time you have enough bitcoin in your online wallet.

The above are very basic steps that I use to make this process a success, and I have never looked back since I started doing it.

What Is Bitcoin And How To Learn About It?

Bitcoin is a decentralized digital currency which is owned by none. Government has no control over it. It uses peer to peer networking and cryptographic proofs to operate the system. The system is controlled and made fraud free by recording transactions in block chain, a public history record, once they are validated with a proof of work system.

The network began operating in 2009 and is a concept involving virtual currency which has no link to government regulated currency. The Bitcoin system has few advantages like:

• It is less expensive to operate and use this virtual money.

• It can be instantaneously transferred throughout the world and there will be no transaction fees. Moreover, you can use it and transfer it anonymously as well.

• Like other currencies, the quantity of this virtual money is fixed and no one has the right to create new Bitcoins. However, people can mine Bitcoins but there is a limit to it and mining Bitcoins is not at all cheap.

• Bitcoin is an independent currency; no organization has any control over it

• It is a democratic currency.

• It is the digital equivalent of something of value.

• As it uses a digital medium, it has the potential to become even more valuable than gold.

How to Learn About Bitcoin Conveniently

You can learn about Bitcoin from various sources on the internet. You can check blogs, magazines, articles etc. Internet is a very good source for a newbie to learn more about Bitcoin. Through blogs and forums, you’ll learn technical, economical and political issues related to the Bitcoin system. These mediums are rich source of information and you can learn everything about this virtual currency. Furthermore, even if you are already in the system and know quite a lot about how it works, you can stay updated on every news and issue about the new digital currency system. It’s also wise to get registered on related forums and start discussion with the experts. Post threads and ask whatever you are unclear about. Many forums also have blog section where experts post informative articles. This is the best learning source as you get benefited from other’s experience.

The digital system of Bitcoin currency seems complicated to those who know nothing about it and most people find the concept hard to grasp and trust. It will not take long before people start accepting and then adopting to this virtual currency system, which is more secure, open and independent.

Bitcoin in a Nutshell

Bitcoin has almost become a household name with ever increasing coverage in the media, and fair to say its notoriety continues to increase. So what’s all the fuss about? Bitcoin appeared around 2009 as a new form of digital currency and was develop from the off as open-source by a clever chap called Satoshi Nakamoto. We are told his true identify is ‘shrouded in mystery’ like he’s some kind of Marvel superhero, I suspect this simply means he’s a super nerd, but there’s no question, he’s certainly a pioneer…

So what’s it all about?

Bitcoin is a form of currency the same as any other, however it is not under the control of any government or financial institution. The premise is for it to be owned and managed by its own community. Bitcoin is de-centralised and managed by peer-to-peer members who all partake in new transaction activity and store previous activity in what are known as ‘block chains’. This means that a full ‘copy’ of all transactions are stored locally and used to verify, between participants, new activity, thereby preventing any one person from malforming, adding or creating fake transactions within the block chain. This ‘consensus’ approach protects the security of Bitcoin transactions.

Bitcoin works in not a dissimilar way to PayPal in that you have a digital wallet with a unique address where people can send you Bitcoins. You can simply install a wallet on your device, or you can download the full Bitcoin wallet and participate in the network as a node.

Bitcoin’s value is very much an effect of supply and demand with risky investors gambling on the highs. Currently a single Bitcoin (shown as 1.0000000) is worth £573 or $935. You can purchase Bitcoins at any of the 8 decimal places so for example 0.0100000 would cost you £5.70 and 0.1000000 would cost you £57.00, no surprise where Bitcoin got its name!

OK, where do I buy Bitcoins?

Unless you have some Bitcoins coming your way via a payment, you will need to purchase Bitcoins in your existing currency. Purchasing is all about trust as it is not regulated, however that’s sort of how eBay started out, where users trusted each other to pay for and send items, and they’ve done rather well for themselves…

The Bitcoin coal face

Bitcoin mining, as it is known, is the process of generating (and securing) Bitcoins and a small payment in the form of units of Bitcoins are paid for the time and effort your hardware is used and your level of participation. This is done via a number of methods from using your own PC’s CPU or GPU (not dissimilar to other grid based BOINC projects such as Seti @ Home) to using ASIC miners (Application Specific Integrated Circuits), these are designed for the singular purpose for which they are built, which in this case is generating Bitcoins. Unless you have significant investment to purchase powerful ASIC miners such as those from butterflylabs.com which can run at 600GH/s (Hash’s per second) you will have to look at USB ASIC Miners such as the popular BlockErupter which generate 336MH/s. Using the BlockErupters you can create your own USB hub style rig running lots of them concurrently.

The reality though, is that it may be too late in the game to make any serious money from Bitcoin mining. The complexity (Hash rate) of the Block Chain is now such that even joining and contributing to a Mining Pool, where miners work together and share the profits, will likely see more spent in electricity than in any real financial return. Also there is a maximum limit of 21 million Bitcoins and at present it is nearing 12.4 million and as more miners join, the quicker this limit will be reached. It is now more likely you will make money buying Bitcoins themselves than generating them.

The future of Bitcoin…

Bitcoin is an emerging technology, as such the price has been volatile, however recently it has started to become more stable as the community of users grows. As of this writing, Bitcoin is seeing the number of transactions reach as high as 100,000 per day. While banks and big business are yet to consider whether Bitcoin is a threat or an opportunity, there is no doubt they are beginning to sit up and take notice of this new digital currency which continues to grow its user base daily.

Interestingly our mysterious Satoshi, the inventor of Bitcoin is thought to own, depending on fluctuations, $1 billion dollars worth of Bitcoins. Don’t we all wish we had an idea like that…

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