Topic Wiki

Editorís note: I know enough about this topic to be dangerous, but Iím not a true expert so please feel free to add to or edit anything in this wiki that will improve it. The FAQs contain many oversimplifications but that is intentional to make the information relatable to the audience. Thanks!

Frequently Asked Questions

What are blockchains and bitcoins and what is the difference?
A blockchain is the fundamental element in a crypto currency system. A blockchain is an accounting ledger. Each block contains a bunch of journal entries (i.e. a chronological record of transactions) that gets encrypted (by miners) but can be downloaded and read by anyone on the network. Why the blockchain ledger is secure and how we can vouch for its integrity is a slightly more advanced topic.

An accounting ledger typically keeps track of money, and a blockchain is no different. But the only type of money that it can accurately track is digital money that lives on the blockchain network. So dollars, euros, etc are out. The digital money that lives on the blockchain is called a crypto currency, and the most well-known one at this time is Bitcoin.

Currently there are just two major blockchain networks: the Bitcoin Network, and the Ethereum Network. Each one has its own currency, which are Bitcoin and Ether, respectively.

Iím just a simple DDFer and not an accountant + cryptographer + hacker all at the same time. Can you make this a little simpler to understand?
Letís try an analogy. There is a certain website called Dansdeals.com and it has quite a following. Some of the followers are just users/readers but others are more active and produce value for the website. When they provide value, they earn currency for their work Ė called ďEQPĒ and ďHTĒ. So we have something we will call the Dansdeals Blockchain Network that is simply a record keeper of various ongoing deals and it issues a native currency that is fractionable (10,000 EQP = 1 HT). This is similar to the Blockchain network recording financial transactions and issuing bitcoins. The ones who work for the network (miners) earn bitcoins and everyone else needs to buy it to participate.

The analogy improves if you imagine that the Dansdeals website visitors have to pay a small amount, letís say 5 EQP, in order to access a deal or a code that is recorded on the network. If the website has 30,000 followers who love deals, but only 1,000 active members who earn EQP, then you can see that there is a need for a marketplace to be created where you can buy EQP for later use.

Of course, websites are not networks, and this analogy is far from perfect. But useful.

How much is a Bitcoin worth
No one knows. A few people are speculating its worth based on the potential that Bitcoin will one day become a major world currency that people use in their daily lives. Most people though are speculating its worth based on what the next new investor will pay them for it (google ďGreater Fool InvestingĒ).

Even if a crypto currency becomes dominant, who says it will be Bitcoin? Maybe it will be Schmitcoin?
This is completely possible. Bitcoin and Ether are the most likely at this point, but their long term survival is not at all guaranteed.

So why all the fuss about Bitcoin? Shouldnít we wait for Schmitcoin and its cousins to come out?
You could, but you donít want to ignore how hard it is to start up a network from scratch. It may be that as little as one person can create rival code to compete with the existing digital currencies and blockchains, but one person is not a network. You need a lot of highly technical and motivated people to join you and also to invest their time, energy, and money in making that network run. Itís a highly specialized group of people, and most of the people who would fit that profile are already tied up with an existing network. So itís not impossible, especially in the long-term, but even if it does happen it would be unlikely to pop up overnight and so Vegas odds for Bitcoin are way shorter.

Letís go back to the Dansdeals analogy. Imagine that Dansdeals is not the only such website, and there are other websites in existence that provide similar services. For the sake of the analogy letís call them MMS and OMAAT. They too have big enough followings to survive independently, and even though each one offers a slightly different flavor that differentiates them, anyone on one of the networks could also get their most important needs met on one of the other networks. In this analogy, do you think itís worth collecting EQP/HT or not? After all, Schmansdeals.com could open up one day and all the business could move there.

The argument for the difficulty of starting up a rival blockchain network is much stronger than in the analogy (especially if we start to include ďsmart contractsĒ in the discussion), but the basic idea that you need a critical mass of follows to be successful and compete with existing rivals is the same.


Author Topic: BitCoin Master Thread  (Read 19778 times)

Offline chaim0m

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Re: BitCoin Master Thread
« Reply #420 on: December 07, 2017, 04:43:52 PM »
In other words, the real value is zero and its entire value is discrepancy.
It has the same value as the dollar, in one word 'consensus ' that may not have intrinsic value but it has plenty of real world value, zero value is something that one person values but not others.
travelcm

Offline sky121

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Re: BitCoin Master Thread
« Reply #421 on: December 07, 2017, 11:10:54 PM »
All this Bitcoin talk reminded of the this kinda interesting podcast episode. 

I'm sure there are some attendees of the festival the podcast centers around making a nice profit.


https://play.google.com/music/m/D3yb2yqs6xqkcwzergv7jg2pcm4?t=286_Libertarian_Summer_Camp_-_Planet_Money
"Not all who wander are lost"

Offline alisa

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Re: BitCoin Master Thread
« Reply #422 on: December 08, 2017, 12:50:19 PM »
many have asked until when bitcoins will survive?

Offline lubaby

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Re: BitCoin Master Thread
« Reply #423 on: December 08, 2017, 12:52:29 PM »
many have asked until when bitcoins will survive?
Correct.
Once the game is over, the king and the pawn go back in the same box.

Offline hachover

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Re: BitCoin Master Thread
« Reply #424 on: December 08, 2017, 12:53:40 PM »
many have asked until when bitcoins will survive?

Well, an EMP could end it.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline henche

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Re: BitCoin Master Thread
« Reply #425 on: December 08, 2017, 01:06:13 PM »
Well, an EMP could end it.

And a fire in your house could lose your key, if it's locally saved

Offline hachover

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Re: BitCoin Master Thread
« Reply #426 on: December 08, 2017, 01:08:55 PM »
And a fire in your house could lose your key, if it's locally saved

Heh. Bitcoin will survive just fine without you
I'm an optimist; but only because life isn't going to give me any other good choices.

Online Emkay

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Re: BitCoin Master Thread
« Reply #427 on: December 09, 2017, 11:21:14 AM »


You can roll your eyes, and that makes sense, because you are not a subscriber to the religion (neither am I). But that also means you can't understand or predict the actions of the people who belong to it. If you also thought that BTC is destined to replace USD and EUR, then you wouldn't let it go for the current price either.
BTC isn't and never will become a dominant payment method. Although I do think it's now the digital gold and will continue rising.

Offline ludmila

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Re: BitCoin Master Thread
« Reply #428 on: December 09, 2017, 12:09:32 PM »
Futures trading will start Sunday evening Chicago time, let us see if the hedge funds will drive it much higher from the start and then sell it short or vise versa.
« Last Edit: December 09, 2017, 01:02:31 PM by ludmila »
I was the Best,still the Best, and will always be the Best.
Pele Good,Maradona Better, George Best.

Offline ludmila

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Re: BitCoin Master Thread
« Reply #429 on: December 09, 2017, 01:03:13 PM »
Currently down $2500 !!! :)
I was the Best,still the Best, and will always be the Best.
Pele Good,Maradona Better, George Best.

Offline henche

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Re: BitCoin Master Thread
« Reply #430 on: December 09, 2017, 08:13:31 PM »
BTC isn't and never will become a dominant payment method. Although I do think it's now the digital gold and will continue rising.

If it doesn't become a currency, why would it have any value?

Offline ExGingi

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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #432 on: December 09, 2017, 08:26:44 PM »
BTC isn't and never will become a dominant payment method. Although I do think it's now the digital gold and will continue rising.

I donít think it has to become a dominant payment method for to have value.
As long as it is easy, fast, and cheap to make transactions it will have value. As t currently stands, bitcoin is slow and expensive and itís getting worse every day. OTOH Bitcoin Cash is the same as bitcoin but easy cheap and fast which is why Iím trying to buy some now.
Live forever or die trying.

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Re: BitCoin Master Thread
« Reply #433 on: December 09, 2017, 08:30:21 PM »
BTC isn't and never will become a dominant payment method. Although I do think it's now the digital gold and will continue rising.

I'd like to see someone make jewelry out of bitcoins. Calling it digital gold is the definition of hype
I'm an optimist; but only because life isn't going to give me any other good choices.

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Re: BitCoin Master Thread
« Reply #434 on: December 09, 2017, 08:30:35 PM »
If it doesn't become a currency, why would it have any value?
It would be like a commodity, except 100x more volatile