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Wow. Bitcoin is almost $1,500

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Zeze

Lifer
Mar 4, 2011
10,265
485
126
I still don't understand how bitcoin works and how people just "mine" them and can use them.
I think there are plenty of articles that explain well.

I kind of get it at high level.

1. There are blocks or some crap that you can mine. And they yield bit coins. In order to mine them, they require tremendous CPU/GPU.

2. The blocks and/or bitcoins all have a unique serial # to them. And everything is in full transparency. Everyone can look at which coins are owned by whom, came from which blocks etc.

3. Also every transaction of bitcoins are in full transparency as well. So the supposedly entire integrity of bitcoin 'system' stays intact.

That's it. The bitcoin themselves have no value inherently. But people assign value to them because of its integrity & rarity- just like how we decided to assign value to gold, diamonds, etc.
 

Elixer

Lifer
May 7, 2002
10,377
762
126
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.
Actually, the crazy thing is, they keep getting these huge heists with millions stolen, and there is nothing they can do about it.

Pretty much means it is open season to try and steal as much as you can, there are no consequences for the person doing the stealing.
 

JEDI

Lifer
Sep 25, 2001
26,428
935
126
I think there are plenty of articles that explain well.

I kind of get it at high level.

1. There are blocks or some crap that you can mine. And they yield bit coins. In order to mine them, they require tremendous CPU/GPU.

2. The blocks and/or bitcoins all have a unique serial # to them. And everything is in full transparency. Everyone can look at which coins are owned by whom, came from which blocks etc.

3. Also every transaction of bitcoins are in full transparency as well. So the supposedly entire integrity of bitcoin 'system' stays intact.

That's it. The bitcoin themselves have no value inherently. But people assign value to them because of its integrity & rarity- just like how we decided to assign value to gold, diamonds, etc.
$1500 for a bitcoin:
wonder how rich the inventor is?
 

Crono

Lifer
Aug 8, 2001
23,727
1,495
136
$1500 for a bitcoin:
wonder how rich the inventor is?
Around $1.5 billion in BTC at current rate, but it hasn't been spent, last I checked. That's assuming he/she/they didn't mine any or purchase additional bitcoin sometime after genesis. Hard to say as it's not easy to trace or link identities to wallet addresses. Satoshi Nakamoto is still a mystery.
 
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Fritzo

Lifer
Jan 3, 2001
40,919
1,051
126
I still don't understand the economics of a bitcoin...it's a made-up, decentralized currency that is worth something because a group of people say it's worth something?
 

JEDI

Lifer
Sep 25, 2001
26,428
935
126
I still don't understand the economics of a bitcoin...it's a made-up, decentralized currency that is worth something because a group of people say it's worth something?
one word:
tulips
 

Mandres

Senior member
Jun 8, 2011
944
58
91
It's worth something because it can facilitate instant, anonymous trades anywhere the internet reaches. Buying drugs online was already listed as the classic example - the anonymous nature of BTC enables safe black market trading and that has value (for some people). It's objectively better for that purpose than dollars, or gold coins or seashells or any other currency.

But it's trading value these days is driven by speculation - people hoping to buy low and sell high, pumping and dumping.
 

Crono

Lifer
Aug 8, 2001
23,727
1,495
136
I still don't understand the economics of a bitcoin...it's a made-up, decentralized currency that is worth something because a group of people say it's worth something?
one word:

tulips
John C. Dvorak once likened it to Beanie Babies :D

As a currency, it's really the alternative to the digital equivalent of money for whatever currency you come from. For instance, when you deposit cash at your local bank, that money isn't physically stored in some box with your name on it, it's simply counted and the value recorded in a database. That "money" in your account isn't any more real than bitcoin. What gives people faith in that money is the reputation of the bank, the integrity of the financial system, and the insurance of the government (FDIC in the U.S.)

What gives people faith in bitcoin is the decentralized system, which is a global system and maintained as long as you have people using bitcoin wallets and mining.

Ultimately, something has value for trade (as opposed to personal value) only if a group of people agree it has value, anyway. Even if a government issues currency and declares it has value, it doesn't mean squat if the people think it's worthless, as is in the case with runaway hyperinflation where paper money is only worth burning or wiping your butt with. :p

The speculative aspect of using bitcoin as an investment makes it more like a foreign exchange market than digital cash, and of course that means it's more volatile as long in this still relatively immature state. Eventually we'll see things settle down and more cryptocurrencies be able to be used more easily for buying goods and services - whether it's front-facing or on the backend.

Fiat currency is still more reliable and trustworthy and practical, but it's not infallible, either. People living in countries that have or had their economies collapse know this.
 
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PliotronX

Diamond Member
Oct 17, 1999
8,886
107
106
Every time the dollar rises, I picture druglords gunning down people and bankers diving into pools of money.
That doesn't even make sense when bitcoin is commonly valued in some form of national currency. The dollar never rallies either, it just becomes more and more weak as fractional reserve banking buttf*cks it and collective debt marches toward quadrillions.
 

Crono

Lifer
Aug 8, 2001
23,727
1,495
136
That doesn't even make sense when bitcoin is commonly valued in some form of national currency. The dollar never rallies either, it just becomes more and more weak as fractional reserve banking buttf*cks it and collective debt marches toward quadrillions.
This has nothing to do with my vision being just as valid as yours. It's a borderline non sequitur.

The implication from your prior post is that bitcoin price is largely being driven up by ransomware. I don't think that's true (if you have some proof, I'll change my tune) any more than stating a fiat currency like the dollar is influenced mainly by criminality.

Which isn't to say both aren't used by criminals, but legitimate uses and investment impact both far greater.
 
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ImpulsE69

Lifer
Jan 8, 2010
14,794
824
126
Until bitcoin is seen as something other than an 'investment' it won't be reliable. Honestly, I don't think a decentralized digital currency is the best way to go about it. It has to go through the bit coin 'banks' which basically makes it..NOT decentralized and apparently very weak against 'robbers'.
 

Charmonium

Diamond Member
May 15, 2015
5,922
473
126
Until bitcoin is seen as something other than an 'investment' it won't be reliable. Honestly, I don't think a decentralized digital currency is the best way to go about it. It has to go through the bit coin 'banks' which basically makes it..NOT decentralized and apparently very weak against 'robbers'.
Bitcoin is always going to be a niche currency. There are too many problems with it to gain wide acceptance. Everything from ridiculously slow transaction processing and capacity to the irrevocable nature of the currency. Once you transfer bc to someone, it's gone. There's no way you're ever going to get that back. Same is true if you lose your bc wallet.

The technology that bc uses, the blockchain, is something else though. That kind of system guarantees secure transfer of money w/o any concern of the system being hacked. But there an infinite number of possible blockchain schemes so it's not as if you would ever need bc or light coin or ethereum to implement such a system.
 

KB

Diamond Member
Nov 8, 1999
5,094
151
106
Around $1.5 billion in BTC at current rate, but it hasn't been spent, last I checked. That's assuming he/she/they didn't mine any or purchase additional bitcoin sometime after genesis. Hard to say as it's not easy to trace or link identities to wallet addresses. Satoshi Nakamoto is still a mystery.
I bet somebody out there, maybe a government like Russia, is building a huge quantum computer array in order to figure out Satoshi's private bitcoin wallet key. It will take a long long time, but at $1.5 billion it might be worth it.
 

[DHT]Osiris

Diamond Member
Dec 15, 2015
8,003
3,822
146
Bitcoin is always going to be a niche currency. There are too many problems with it to gain wide acceptance. Everything from ridiculously slow transaction processing and capacity to the irrevocable nature of the currency. Once you transfer bc to someone, it's gone. There's no way you're ever going to get that back. Same is true if you lose your bc wallet.

The technology that bc uses, the blockchain, is something else though. That kind of system guarantees secure transfer of money w/o any concern of the system being hacked. But there an infinite number of possible blockchain schemes so it's not as if you would ever need bc or light coin or ethereum to implement such a system.
You just described cash, it's got slow transaction processing/capacity, if you lose it, it's gone, if you lose your wallet, the contents are gone. That's kind of a silly reason to discount something.

Also, niche or no, it's making me money right now, so 'the rubber is already hitting the road', so to speak.
 

Charmonium

Diamond Member
May 15, 2015
5,922
473
126
You just described cash, it's got slow transaction processing/capacity, if you lose it, it's gone, if you lose your wallet, the contents are gone. That's kind of a silly reason to discount something.

Also, niche or no, it's making me money right now, so 'the rubber is already hitting the road', so to speak.
That's all quite true. But most of the money in the economy isn't held in cash. It's held in deposits. And there are all manner of laws and regulations about how that money can be moved around. It's also insured if a bank "loses" it.

And that's why cash/electronic money is always going to be preferred over most cryptocurrencies. No one uses bitcoin because it's easier or faster or more convenient. They use it to do things they couldn't do legally with "cash".

No doubt that cryptos are a great way to make money. Since you can see the order book in most crypto systems, you can make smart bets to buy or sell and in the long run, the odds will favor you. But that's not the same as saying that cryptos have an actual economic role to play.
 

Crono

Lifer
Aug 8, 2001
23,727
1,495
136
That's all quite true. But most of the money in the economy isn't held in cash. It's held in deposits. And there are all manner of laws and regulations about how that money can be moved around. It's also insured if a bank "loses" it.

And that's why cash/electronic money is always going to be preferred over most cryptocurrencies. No one uses bitcoin because it's easier or faster or more convenient. They use it to do things they couldn't do legally with "cash".
Remittances

Also I can name about a dozen or more legal applications for Ethereum, more than a few that can't be done with cash, digital or not. Bitcoin also has some interesting developments, but it's given rise to a whole industry of interesting technology.

Your argument might have been semi valid in 2011, but you have to keep up with what's going on if you are going to make an informed argument.
 
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Charmonium

Diamond Member
May 15, 2015
5,922
473
126
Remittances
That's a good point. Cross boarder transfers are both arcane and archaic not to mention expensive by the time all of the intermediaries take their cut. And you're right, remittances is the one area where a solution is needed.

But bitcoin isn't the best system to make transfers. You still need someplace on the other end to convert bitcoin to local currency. If you can't solve that part of the problem, your "solution" isn't worth very much.

When eventually get a system for remittances it's probably not going to be a cryptocurrency, even though there are some like XRP and Stellar Lumens that are specifically designed for this purpose. It's more likely to be something like Mpesa in Kenya and a few other countries. There everything is done on your cell phone and you use the existing cell phone stores to do the mpesa-cash conversion.
 

ponyo

Lifer
Feb 14, 2002
17,959
1,628
126
As soon as Bitcoin passed the price of gold on its second attempt, I knew it had room to run and would continue the climb. In my younger days, I would've immediately jumped on the Bitcoin train the minute Bitcoin passed gold the second time. But when you get old, your balls shrink and you become technology iliterate.

But even with the recent climb, no is talking about Bitcoin. How much higher must Bitcoin climb before it gets some respect? $2,000? $3,000? $10,000?
 

ponyo

Lifer
Feb 14, 2002
17,959
1,628
126
bitcoin passed $2,000. ethereum passed $100. Amazing stat. If you spent $1,000 on bitcoins in 2010 and held, it would be worth over $25 million today. I know there were people here who got in early.

current bitcoin price: $2017
current ethereum price: $125.43

Real fortunes are being made.
 

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