Topic Wiki

Editor’s note: I know enough about this topic to be dangerous, but I’m 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 a few major blockchain networks: the Bitcoin Network, the Ethereum Network, and the Litecoin Network. Each one has its own currency, which are Bitcoin, Ether, and Litecoin, respectively.

I’m just a simple DDFer and not an accountant + cryptographer + hacker all at the same time. Can you make this a little simpler to understand?
Let’s 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 – called “EQP” and “HT”. 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, let’s 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 “Greater Fool Investing”).

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? Shouldn’t we wait for Schmitcoin and its cousins to come out?
You could, but you don’t 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. It’s 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 it’s 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.

Let’s 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 let’s 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 it’s 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 “smart contracts” 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.

« Last edited by yuneeq on December 25, 2017, 01:05:21 AM »

Author Topic: BitCoin Master Thread  (Read 42033 times)

Online sky121

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Re: Whats the story with BitCoins ?
« Reply #45 on: October 30, 2013, 05:03:35 PM »
I heard that today in Canada the first BitCoin Atm opened

Saw that. So interesting. And they're planning more.
"Not all who wander are lost"

Offline shmu

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Re: Whats the story with BitCoins ?
« Reply #46 on: October 30, 2013, 05:40:35 PM »
isn't it a digital currency?
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Offline how

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Re: Whats the story with BitCoins ?
« Reply #47 on: October 30, 2013, 05:41:16 PM »
isn't it a digital currency?
it is

Offline henche

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Re: Whats the story with BitCoins ?
« Reply #48 on: November 27, 2013, 11:51:02 AM »
Anyone know how to buy bitcoin? I think it's gonna bust but the most you can lose is 100% and you can gain a lot. I think it has a good shot at shooting up again, esp if Eric Posner is correct about it.

So I giyf, but I don't trust any of the info I'm seeing, especially since all of it says not to trust anyone else. Any ddf'ers sell bitcoin? I'll buy a bit.

Offline jaywhy

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Re: Whats the story with BitCoins ?
« Reply #49 on: November 28, 2013, 04:54:39 PM »
Anyone know how to buy bitcoin? I think it's gonna bust but the most you can lose is 100% and you can gain a lot. I think it has a good shot at shooting up again, esp if Eric Posner is correct about it.

So I giyf, but I don't trust any of the info I'm seeing, especially since all of it says not to trust anyone else. Any ddf'ers sell bitcoin? I'll buy a bit.
Now is probably a bad time to buy. It will correct eventually.

Offline Vosizderneias

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Re: Whats the story with BitCoins ?
« Reply #50 on: November 30, 2013, 04:40:30 PM »
bitcoins, unlike the dollar and all other currencies, lack a central power to control the currency. if the federal reserve wanted, they can re-print some $$ and inflate the currency thereby controlling the dollar. however, bitcoins are truly special in that corruption or random powers cannot affect it.
it is true that bitcoins were stolen and its more complicated than what were all used to, but give it time and i believe it will be the standard worldly currency. welcome to our new globalized world!
sorry if this was a rant 8)

Offline Planet

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Re: Whats the story with BitCoins ?
« Reply #51 on: November 30, 2013, 11:30:24 PM »
Anyone know how to buy bitcoin? I think it's gonna bust but the most you can lose is 100% and you can gain a lot. I think it has a good shot at shooting up again, esp if Eric Posner is correct about it.

So I giyf, but I don't trust any of the info I'm seeing, especially since all of it says not to trust anyone else. Any ddf'ers sell bitcoin? I'll buy a bit.

The simplest would be to buy on coinbase.com, and then you can transfer it to your own "wallet", or to a trade like MtGox/btc-c/BitStamp to trade and have fun.

Offline Bailbino

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Re: Whats the story with BitCoins ?
« Reply #52 on: November 30, 2013, 11:32:04 PM »
Look up the man who created bitcoins than you will know it's all a Ponzi scheme
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Offline Bailbino

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Re: Whats the story with BitCoins ?
« Reply #53 on: November 30, 2013, 11:35:46 PM »
Satoshi Nakamoto
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Offline churnbabychurn

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Re: Whats the story with BitCoins ?
« Reply #54 on: November 30, 2013, 11:36:25 PM »
Look up the man who created bitcoins than you will know it's all a Ponzi scheme
he's anonymous!

Offline henche

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Re: Whats the story with BitCoins ?
« Reply #55 on: November 30, 2013, 11:41:42 PM »
bitcoins, unlike the dollar and all other currencies, lack a central power to control the currency. if the federal reserve wanted, they can re-print some $$ and inflate the currency thereby controlling the dollar. however, bitcoins are truly special in that corruption or random powers cannot affect it.
it is true that bitcoins were stolen and its more complicated than what were all used to, but give it time and i believe it will be the standard worldly currency. welcome to our new globalized world!
sorry if this was a rant 8)

Of course it will never be the world currency.

Because why should it be bitcoin? Why not shmitcoin? Why not bytecoin? What gives value to the computer code made by this anonymous 16  year old in ukraine any more than the computer code made by a 32 year old in his mother's basement in chicago? Why would everyone agree to accord value to them when they are based on nothing?

Offline churnbabychurn

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Re: Whats the story with BitCoins ?
« Reply #56 on: December 01, 2013, 12:09:11 AM »
Of course it will never be the world currency.

Because why should it be bitcoin? Why not shmitcoin? Why not bytecoin? What gives value to the computer code made by this anonymous 16  year old in ukraine any more than the computer code made by a 32 year old in his mother's basement in chicago? Why would everyone agree to accord value to them when they are based on nothing?
same reason why the accord value to the almighty paper dollar, also backed by nothing but at the mercy of the feds..
See what happened in cypress a few months ago when their gov ran out of cash. .. (They tried to steal bank deposits)

Offline DovtheBear

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Re: Whats the story with BitCoins ?
« Reply #57 on: December 01, 2013, 12:23:20 AM »
Of course it will never be the world currency.

Because why should it be bitcoin? Why not shmitcoin? Why not bytecoin? What gives value to the computer code made by this anonymous 16  year old in ukraine any more than the computer code made by a 32 year old in his mother's basement in chicago? Why would everyone agree to accord value to them when they are based on nothing?
You also starting a new currency?
"להסתובב זה לא אומר להיות חופשי"

Offline henche

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Re: Whats the story with BitCoins ?
« Reply #58 on: December 03, 2013, 10:49:39 AM »
same reason why the accord value to the almighty paper dollar, also backed by nothing but at the mercy of the feds..
See what happened in cypress a few months ago when their gov ran out of cash. .. (They tried to steal bank deposits)

Actually, that proves my point. The dollar is as valuable as the confidence we have in the US Government that it will stay around.

Offline Vosizderneias

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Re: Whats the story with BitCoins ?
« Reply #59 on: December 03, 2013, 01:23:14 PM »
So the ppl that believe in the concept of a bitcoin (ME:)) also lack any belief in a silly system such as the US govt and the federal reserve who, just by the way, owe china a sh$t load of money, and are in a tremendous amount of debt.