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


Author Topic: BitCoin Master Thread  (Read 18837 times)

Offline hachover

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Re: BitCoin Master Thread
« Reply #390 on: December 06, 2017, 04:02:24 PM »
Finally broke $12k

Crossed $13K today. About time.
I'm an optimist; but only because life isn't going to give me any other good choices.

Online Mikeoracle

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Re: BitCoin Master Thread
« Reply #391 on: December 06, 2017, 06:08:36 PM »
Finally broke $12k
finally broke 14k...

Offline hachover

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Re: BitCoin Master Thread
« Reply #392 on: December 06, 2017, 08:39:29 PM »
15 by morning. Wont be surprised if 20k happens before the year ends.

There will be an end to this but I dont think it will be soon
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline ludmila

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Re: BitCoin Master Thread
« Reply #393 on: December 06, 2017, 11:08:23 PM »
15 by morning. Wont be surprised if 20k happens before the year ends.

There will be an end to this but I dont think it will be soon
Now , all positive news that are pushing it higher
Bank of America may be looking into cryptocurrency exchange services for its corporate clients – or at least keeping its options open should they become interested.
https://www.coindesk.com/bank-of-america-outlines-cryptocurrency-exchange-system-in-patent-award/

Bitcoin Up $2k on Day as Market Nears $400 Billion

https://www.coindesk.com/bitcoin-2k-24-hours-crypto-market-nears-400-billion/
I was the Best,still the Best, and will always be the Best.
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Offline ah giten

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Re: BitCoin Master Thread
« Reply #394 on: December 07, 2017, 12:47:14 AM »
And what happens when it goes down instead of up?
brilliant question
+1000

Online henche

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Re: BitCoin Master Thread
« Reply #395 on: December 07, 2017, 12:52:52 AM »
The reason it is going up is that people are adopting it as their currency and are trading in their worthless dollars.  So it isn't going to go down,  just keep going up.

Online Mikeoracle

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Re: BitCoin Master Thread
« Reply #396 on: December 07, 2017, 07:01:27 AM »
finally broke 14k...
finally broke $15k...

Offline Dan

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Re: BitCoin Master Thread
« Reply #397 on: December 07, 2017, 08:42:49 AM »
Are we almost at the end?
Are these backed by the value of 3D Android 4.4.2 KitKat tablets?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline hachover

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Re: BitCoin Master Thread
« Reply #398 on: December 07, 2017, 10:20:22 AM »
Are we almost at the end?
Are these backed by the value of 3D Android 4.4.2 KitKat tablets?

I don't think we are. I think the majority of BTC is owned by people who are members of what is almost a quasi-religion, and they will continue to hold onto their coin because they want it to become a valid currency. Then you have an enormous amount of VC or similar investors, and they know the potential boost that can come after a futures market is established. Definitely would not do anything to jeopardize or spook the futures market too soon. To top it off, although there is enormous bitcoin mania and everyone down to the barber and shoeshiner are talking about it, most are still unable to get their hands on any, so there is still an enormous amount of new money on the sidelines that wants to come in. Logic tells me there is a lot more runway before anyone pulls back on the yoke.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline Dan

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Re: BitCoin Master Thread
« Reply #399 on: December 07, 2017, 10:21:18 AM »
Logic says people will claim their profits and the market will crash.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

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Re: BitCoin Master Thread
« Reply #400 on: December 07, 2017, 10:27:45 AM »
I don't think we are. I think the majority of BTC is owned by people who are members of what is almost a quasi-religion, and they will continue to hold onto their coin because they want it to become a valid currency. Then you have an enormous amount of VC or similar investors, and they know the potential boost that can come after a futures market is established. Definitely would not do anything to jeopardize or spook the futures market too soon. To top it off, although there is enormous bitcoin mania and everyone down to the barber and shoeshiner are talking about it, most are still unable to get their hands on any, so there is still an enormous amount of new money on the sidelines that wants to come in. Logic tells me there is a lot more runway before anyone pulls back on the yoke.

because the best way to use currency is to keep it under your mattress ::)
If you see something that is 50% off but don't need it, walk away and save yourself 100%

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Re: BitCoin Master Thread
« Reply #401 on: December 07, 2017, 10:40:23 AM »
Almost hitting $17k!

Offline David Smith

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Re: BitCoin Master Thread
« Reply #402 on: December 07, 2017, 10:43:07 AM »
Are we almost at the end?
Are these backed by the value of 3D Android 4.4.2 KitKat tablets?
This is an almost $300B currency.
Who do you think you are fooling? You think you are going to pull a quick one on your Creator? Good luck with that.
JTZ

Offline Dan

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Re: BitCoin Master Thread
« Reply #403 on: December 07, 2017, 10:44:11 AM »
Ripe for a crash.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline hachover

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Re: BitCoin Master Thread
« Reply #404 on: December 07, 2017, 11:13:06 AM »
$17k. About time
I'm an optimist; but only because life isn't going to give me any other good choices.