Wow. Bitcoin is almost $1,500

[ponyo]

and Ethereum is almost $80, up almost 900% this year. And the crazy thing is now you can actually buy things other than drugs with it.

 

[BD231]

You have no idea.

 

[Crono]

One of these days Ethereum will completely take the mantle from Bitcoin. It's already being used in a ton of fintech and blockchain-based applications and platforms, like Hyperledger.

Feels like I've been waiting forever for Casper, though.

 

[sm625]

Central bank lovin spreads to e-currency as well. If you're going to blow a global bubble, why not encompass everything?

 

[mxnerd]

The problem is that you don't know when your Bitcoin assets will be stolen.

 

[SaltyNuts]

Buy high, sell low.

 

[Charmonium]

I was reading that because of some hard coded size limit in the bitcoin software, it can only handle something like 6 - 7 transactions per second. Visa handles 10's or 100's of thousands. So unless they modify the code, bitcoin is never going to work for any real sort of commerce.

 

[ponyo]

I was reading that because of some hard coded size limit in the bitcoin software, it can only handle something like 6 - 7 transactions per second. Visa handles 10's or 100's of thousands. So unless they modify the code, bitcoin is never going to work for any real sort of commerce.

Isn't that why Ethereum is on fire? Because that can handle the transactions and have the big boys like JP Morgan Chase behind it? You can pay with bitcoins at major precious metal dealers and buy gold and silver with it. It doesn't get any more real than that.

 

[Charmonium]

I meant 'real' in terms of volume. If something like bitcoin is going to create wide acceptance, it has to have the speed and capacity to handle a much larger volume of transactions. Not only that, I've also read it can takes days for a bitcoin transaction to be verified. That's never going to fly either.

 

[ponyo]

I meant 'real' in terms of volume. If something like bitcoin is going to create wide acceptance, it has to have the speed and capacity to handle a much larger volume of transactions. Not only that, I've also read it can takes days for a bitcoin transaction to be verified. That's never going to fly either.

Like I said, that's why Ethereum and others exist. But none of that matters. The only thing real is currently one bitcoin is worth $1,524 according to Google and you can take that one bitcoin and go to a site like JM Bullion and purchase 1 oz of gold and 10 oz of silver and still have money left over. You can get real paper USD for it. That is amazing.

 

[ponyo]

Another day. Another surge. Current bitcoin price: $1,586. Ethereum: $88.14. Wouldn't surprise me if Ethereum takes out $100 soon.

 

[purbeast0]

I still don't understand how bitcoin works and how people just "mine" them and can use them.

 

[ponyo]

I still don't understand how bitcoin works and how people just "mine" them and can use them.

me neither. I'm just curious bystander and watching the firework. I do wish I had learned and mined some when people here were doing it. I have no interest in jumping on the bandwagon now. I just thought it was some stupid fad and waste of electricity like that searching for alien life project. I remember lot of people arguing and talking about bitcoin when it first broke $1,000 and crashed and burned. Everyone laughed and said I told you so and thought that was it. But this time, no one is talking about it. It's almost like people don't care. Or maybe they finally accept it as real now. Whatever the reason, I don't see the recent rise talked about much. Which is why this climb could have further legs.

 

[Ancalagon44]

I still don't understand how bitcoin works and how people just "mine" them and can use them.

I've got $205 worth of cryptocurrency from mining, and I'm still amazed it works.

It's like... I leave my GPU to run this program and people give me money for it? Money appears out of thin air? Cool!

When you first read about mining, it sounds like a scam - too good to be true.

 

[ponyo]

I've got $205 worth of cryptocurrency from mining, and I'm still amazed it works.

It's like... I leave my GPU to run this program and people give me money for it? Money appears out of thin air? Cool!

When you first read about mining, it sounds like a scam - too good to be true.

Think of it as your own printing press. Government prints money out of thin air and some paper and ink. Why can't you?

 

[Raduque]

Dammit, I need to rebuild a mining rig. I shouldn't have thrown out that cpu/mobo/ram/case I was using previously.

 

[Crono]

I still don't understand how bitcoin works and how people just "mine" them and can use them.

me neither. I'm just curious bystander and watching the firework. I do wish I had learned and mined some when people here were doing it. I have no interest in jumping on the bandwagon now. I just thought it was some stupid fad and waste of electricity like that searching for alien life project. I remember lot of people arguing and talking about bitcoin when it first broke $1,000 and crashed and burned. Everyone laughed and said I told you so and thought that was it. But this time, no one is talking about it. It's almost like people don't care. Or maybe they finally accept it as real now. Whatever the reason, I don't see the recent rise talked about much. Which is why this climb could have further legs.

It helps to understand how cryptography works first. A few years ago Steve Gibson did a good basics on how it works.

Here's how I understand it, though as a general layperson without having a computer science or heavy math background it's going to be simplistic and probably flawed:

The essence of Bitcoin and other cryptocurrencies are that most of them are a Proof-of-Work system and a blockchain. Proof-of-Work (PoW - there's also Proof-of-Stake or PoS algorithms used by some cryptocurrencies) addresses a key general problem mathematically: proving that you have done something ("work") by solving or decrypting a cryptographic hash (algorithmically generated). Mining is putting your CPU (not used commonly anymore, as GPUs have more parallel processing power for most cryptocurrencies, and purpose-built ASICs even more so) to work continuously in order to solve these hashes.

The hashes aren't just a random collection, though, ultimately what your computer is looking for when mining is the solution for the current "block". A block is a transaction record, a little like pages or a section of a ledger. If your computer finds that block solution before someone else's does, you get the reward for that block (a certain amount of Bitcoin or whatever currency you are mining).

For most mature cryptocurrencies these days, though, because of built-in increasing difficulty (mining power needed to find a block goes up each "round") it's more effective to be part of a mining "pool", where you share the reward from finding/solving a block. Otherwise you'll go through dry spells of days, weeks, or longer if you mine solo.

All the blocks together form a complete ledger of all transactions for that particular cryptocurrency in what's called a (or the) blockchain. The blockchain data isn't stored on a single server somewhere centrally, but instead it is split into chunks and distributed (using the same type of technology behind Bittorrent) and stored on every computer* that runs a "wallet", which is used also to receive and send that cryptocurrency. Each cryptocurrency has it's own blockchain, and the constant encryption/decryption verification process and distribution mechanism of the blockchain is what makes cryptocurrencies attractive, as it's a decentralized network that doesn't rely on a person or group of people to maintain the integrity of the system.

What's driving increased prices of Bitcoin and Ethereum are scarcity and speculation. "Scarcity" sounds funny because it's a digital currency, but there's a fixed limit (21 million BTC total in the case of Bitcoin) that can be mined, and the increasing difficulty means it takes more and more computing power to obtain a single unit of currency or even a fractional amount.

Speculation is driven mostly driven by confidence and news. The resurgence of cryptocurrencies right now is more centered around Ethereum, in my opinion, but that's still a tide that raises all boats, including Bitcoin which is still the de facto cryptocurrency and often used as an intermediate currency to traditional fiat currency. There are number of interesting projects around blockchain technology, big financial institutions are starting to use them for their backend interbanking ledger systems, the IMF held meetings and presentations on cryptocurrencies, cloud providers like Microsoft and IBM are invested in them, IoT device companies... all sorts of activity going on right now.

Sure, some of it is hype and leading to a bubble, but that's really how human development operates, in bursts of interest, disappointment, and then renewal of interest. Knowing when to get in and when to get out - if you are interested in just the financial side - is as difficult as anything else. Bitcoin kr Ethereum could be worthless a year from now, but that's just as true of many "real" currencies. The risks and rewards are higher for sure with cryptocurrencies right now as it's still a nascent technology and field.

* there are light wallets that don't store the full blockchain data, because blockchains tend to run GBs of data and grow over time

 

[Aikouka]

I mined a few coins back in the day. I could have and should have gotten into it a lot earlier as I saw people talking about it a lot; however, it just seemed like a lot of malarkey. Fortunately, I did get in while you could still get a decent amount of coins... or portions of a coin, but I was definitely past the days when you could get yourself a full coin or even prior to the GPU mining. Probably my worst folly was selling too early. A few years back, Bitcoin value really started tanking quite a bit, and I think I sold when it was still at a good value or after it started going back up and plateaued for a bit.

Yeah... I think it was maybe $30 or so for a coin. Yeah... I'd have a few grand if I would have kept it.

 

[poofyhairguy]

Another day. Another surge. Current bitcoin price: $1,586. Ethereum: $88.14. Wouldn't surprise me if Ethereum takes out $100 soon.

Yeah a lot of major world events are really helping Crypto.

 

[Charmonium]

From what I've heard, almost all of the speculation in bc is in China where it's probably being used to evade capital controls. IOW, the Chinese govt limits how much of your wealth you can transfer outside of the country. So if you're a million/billionaire and want to say buy a NYC condo for $20M, you can't just convert 20M yuan into dollars and go buy it.

BC is a way to evade capital controls. You use yuan to buy bitcoin then sell that bitcoin overseas for euros, dollars, etc. Now you can do what you like with the money.

While bc has some similarities to fiat currencies, the fact remains that you have entire economies supporting the value of fiat currencies. So the dollar or the euro is never going to go to zero or even close. Cryptos don't have that and aren't ever likely to since they would then be in direct competition with the fiat currencies and no govt is going to permit that.

 

[poofyhairguy]

From what I've heard, almost all of the speculation in bc is in China where it's probably being used to evade capital controls.

Yeah that is what got Bitcoin into the $hundreds (well that and the Greek crisis). What got it to $1500 was westerners using it as a hedge against inflation.

Like for example, if I was British I would have moved all of my savings into bitcoin prior to Brexit. Then instead of having my money be worth less, I would have actually gotten returns back from the whole process.

 

[purbeast0]

It helps to understand how cryptography works first. A few years ago Steve Gibson did a good basics on how it works.

Here's how I understand it, though as a general layperson without having a computer science or heavy math background it's going to be simplistic and probably flawed:

The essence of Bitcoin and other cryptocurrencies are that most of them are a Proof-of-Work system and a blockchain. Proof-of-Work (PoW - there's also Proof-of-Stake or PoS algorithms used by some cryptocurrencies) addresses a key general problem mathematically: proving that you have done something ("work") by solving or decrypting a cryptographic hash (algorithmically generated). Mining is putting your CPU (not used commonly anymore, as GPUs have more parallel processing power for most cryptocurrencies, and purpose-built ASICs even more so) to work continuously in order to solve these hashes.

The hashes aren't just a random collection, though, ultimately what your computer is looking for when mining is the solution for the current "block". A block is a transaction record, a little like pages or a section of a ledger. If your computer finds that block solution before someone else's does, you get the reward for that block (a certain amount of Bitcoin or whatever currency you are mining).

For most mature cryptocurrencies these days, though, because of built-in increasing difficulty (mining power needed to find a block goes up each "round") it's more effective to be part of a mining "pool", where you share the reward from finding/solving a block. Otherwise you'll go through dry spells of days, weeks, or longer if you mine solo.

All the blocks together form a complete ledger of all transactions for that particular cryptocurrency in what's called a (or the) blockchain. The blockchain data isn't stored on a single server somewhere centrally, but instead it is split into chunks and distributed (using the same type of technology behind Bittorrent) and stored on every computer* that runs a "wallet", which is used also to receive and send that cryptocurrency. Each cryptocurrency has it's own blockchain, and the constant encryption/decryption verification process and distribution mechanism of the blockchain is what makes cryptocurrencies attractive, as it's a decentralized network that doesn't rely on a person or group of people to maintain the integrity of the system.

What's driving increased prices of Bitcoin and Ethereum are scarcity and speculation. "Scarcity" sounds funny because it's a digital currency, but there's a fixed limit (21 million BTC total in the case of Bitcoin) that can be mined, and the increasing difficulty means it takes more and more computing power to obtain a single unit of currency or even a fractional amount.

Speculation is driven mostly driven by confidence and news. The resurgence of cryptocurrencies right now is more centered around Ethereum, in my opinion, but that's still a tide that raises all boats, including Bitcoin which is still the de facto cryptocurrency and often used as an intermediate currency to traditional fiat currency. There are number of interesting projects around blockchain technology, big financial institutions are starting to use them for their backend interbanking ledger systems, the IMF held meetings and presentations on cryptocurrencies, cloud providers like Microsoft and IBM are invested in them, IoT device companies... all sorts of activity going on right now.

Sure, some of it is hype and leading to a bubble, but that's really how human development operates, in bursts of interest, disappointment, and then renewal of interest. Knowing when to get in and when to get out - if you are interested in just the financial side - is as difficult as anything else. Bitcoin kr Ethereum could be worthless a year from now, but that's just as true of many "real" currencies. The risks and rewards are higher for sure with cryptocurrencies right now as it's still a nascent technology and field.

* there are light wallets that don't store the full blockchain data, because blockchains tend to run GBs of data and grow over time

I have a comp sci degree but know nothing about cryptography. And after reading your post, I still have no clue what bitcoins are and why they are worth anything lol. Thanks for the long winded explanation though.

 

[Charmonium]

I have a comp sci degree but know nothing about cryptography. And after reading your post, I still have no clue what bitcoins are and why they are worth anything lol. Thanks for the long winded explanation though.

It's worth something because enough people agreed that it would be worth something.

I think bc really got its start with the SilkRoad and the dark web. It provided a relatively anonymous way of paying for drugs. No paper trail from the buyer to the seller. But I think places like mtgox were around substantially before the SR. So you already had people trading them like a real currency.

 

[poofyhairguy]

It's worth something because enough people agreed that it would be worth something.

And because each one can be unique and non-forgeable.

 

[Crono]

I have a comp sci degree but know nothing about cryptography. And after reading your post, I still have no clue what bitcoins are and why they are worth anything lol. Thanks for the long winded explanation though.

Ah well, I tried.

All you really need to know is it's Bitcoin not Bitcoins. Grammatically it might be correct to say you have x number of bitcoins, but in practice it's usually the media or neophytes who pluralize it with the s.