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 347565 times)

Offline aygart

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Re: BitCoin Master Thread
« Reply #680 on: January 18, 2018, 09:27:19 AM »
Very simple and foolish question, it’s the same reason that gives a nickel a nickels worth of value.
Millions of people believe in its value and utility as a currency, giving it value and utitlty as a currency.
Sounds like economics ain't your thing.
Feelings don't care about your facts

Offline SuperFlyer

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Re: BitCoin Master Thread
« Reply #681 on: January 18, 2018, 09:30:55 AM »
Guys, let's relax.
Those not interested in crypto & co, leave this topic alone.
I understand those that are for and against.
In this topic it's for those that are pro.

Offline Mordyk

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Re: BitCoin Master Thread
« Reply #682 on: January 18, 2018, 09:32:30 AM »
Guys, let's relax.
Those not interested in crypto & co, leave this topic alone.
I understand those that are for and against.
In this topic it's for those that are pro.
+1000. People are getting way to hyped up over here...
#TYH

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #683 on: January 18, 2018, 09:36:05 AM »
Guys, let's relax.
Those not interested in crypto & co, leave this topic alone.
I understand those that are for and against.
In this topic it's for those that are pro.
You think only having a pro view of something is a good idea?
I just found a new supply of forks!

Offline SuperFlyer

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Re: BitCoin Master Thread
« Reply #684 on: January 18, 2018, 09:39:21 AM »
You think only having a pro view of something is a good idea?
Open another thread if you want the anti version.

Offline aygart

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Re: BitCoin Master Thread
« Reply #685 on: January 18, 2018, 09:40:39 AM »
Open another thread if you want the anti version.
First get the mods to change the title to "Bitcoin Praise Echochamber"
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #686 on: January 18, 2018, 09:40:44 AM »
Sounds like economics ain't your thing.

Instead of ad hominem arguments, how about you describe what gives a nickel value.
Obviously there's more to it than what I said but thats the gist of it.
Visibly Jewish

Offline aygart

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Re: BitCoin Master Thread
« Reply #687 on: January 18, 2018, 09:41:36 AM »
Instead of ad hominem arguments, how about you describe what gives a nickel value.
Obviously there's more to it than what I said but thats the gist of it.

No it is very simple. A nickle has value because I can pay my taxes with it.

ואידך פירושא
Feelings don't care about your facts

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #688 on: January 18, 2018, 09:42:44 AM »
Open another thread if you want the anti version.
Remember some of us are shorting this scam.
I just found a new supply of forks!

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #689 on: January 18, 2018, 09:43:07 AM »
If we get approval from a LOR (or DDF halacha expert) I am willing to take an over/under bet with you about the value of Bitcoin. With the loser giving $500 to the Yeshiva of the winner's choice.

Since you're mentioning Bitcoin specifically, I would say bitcoin is not a project that I believe to be the best crypto currency, and should not have it's current valuation. But you still have much to learn because you don't know the difference between Bitcoin or others.
Visibly Jewish

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #690 on: January 18, 2018, 09:43:46 AM »
No it is very simple. A nickle has value because I can pay my taxes with it.

ואידך פירושא

And I can pay taxes with bitcoin.
Next.
Visibly Jewish

Offline aygart

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Re: BitCoin Master Thread
« Reply #691 on: January 18, 2018, 09:44:58 AM »
And I can pay taxes with bitcoin.
Next.
which tax office accepts bitcoin?
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #692 on: January 18, 2018, 09:47:26 AM »
You think only having a pro view of something is a good idea?

If you wanna be negative, bring substantiated evidence that all crypto is a scam.
Instead of just yelling FUD like an old man thinking a computer is useless.
Visibly Jewish

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #693 on: January 18, 2018, 09:48:20 AM »
which tax office accepts bitcoin?

Never mind I misremember a service for using bitcoin to pay taxes.
Ok, you can use crypto to send money anywhere in the world instantly and for free.
Visibly Jewish

Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #694 on: January 18, 2018, 09:48:36 AM »
which tax office accepts bitcoin?

The definition of value is something you can pay taxes with? That is not accurate

Offline aygart

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Re: BitCoin Master Thread
« Reply #695 on: January 18, 2018, 09:50:40 AM »
Never mind I misremember a service for using bitcoin to pay taxes.
Ok, you can use crypto to send money anywhere in the world instantly and for free.
Even if there was that does not mean that you can pay taxes in bitcoin. That means that you can pay a person bitcoin to pay your taxes for you in dollars.
Feelings don't care about your facts

Offline aygart

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Re: BitCoin Master Thread
« Reply #696 on: January 18, 2018, 09:51:08 AM »
The definition of value is something you can pay taxes with? That is not accurate
Where did I define value?
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #697 on: January 18, 2018, 09:52:05 AM »
Even if there was that does not mean that you can pay taxes in bitcoin. That means that you can pay a person bitcoin to pay your taxes for you in dollars.

I can hear that argument.
Now be a real man and don't ignore the part of my comment that you don't have a refutation to.
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Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #698 on: January 18, 2018, 09:54:38 AM »
Where did I define value?
 

No it is very simple. A nickle has value because I can pay my taxes with it.

ואידך פירושא

Unless Im misunderstanding your point you seemed to indicate that the value of a nickel is due to to ability to pay taxes with it.

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #699 on: January 18, 2018, 09:56:22 AM »
Where did I define value?

Since you told us that you're the great economics expert and only you can understand value.
Explain again how the dollar has value while crypto currencies do not.
Visibly Jewish