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 453451 times)

Offline Ergel

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Re: Whats the story with BitCoins ?
« Reply #120 on: February 07, 2014, 11:20:28 AM »
I think you being sarcastic but im not sure
Why aren't you sure?
Life isn't about checking the boxes. Nobody cares.

Offline DovtheBear

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Re: Whats the story with BitCoins ?
« Reply #121 on: February 07, 2014, 11:27:35 AM »
Why aren't you sure?
+1 (Are you guys overlooking who the poster is?)
"להסתובב זה לא אומר להיות חופשי"

Offline henche

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Re: Whats the story with BitCoins ?
« Reply #122 on: February 07, 2014, 11:49:54 AM »
+1 (Are you guys overlooking who the poster is?)

Or the fact that it only lost like 15%, so my credit limit would have to be several millions to have a gain that big, and would have needed thousands of VR's.


Offline lubaby

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Offline CholentTheTraveler

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Re: Whats the story with BitCoins ?
« Reply #124 on: February 09, 2014, 12:08:10 PM »
http://www.theverge.com/2014/2/7/5386222/a-string-of-thefts-hit-coinbase-bitcoins-most-reputable-wallet-service
I believe they have started changing their protection due to this. Every log in now if you desire requires a verification text to your phone. Now that Mt Gox is suspended and price dropped I would assume the price will shoot up to the $800 mark again in a week or so when the platform opens up.

Disclaimer: Bitcoin is dumb but there is nothing wrong with making a profit thanks to other peoples stupidity.

Offline DovtheBear

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Re: Whats the story with BitCoins ?
« Reply #125 on: February 12, 2014, 09:01:05 AM »
Or the fact that it only lost like 15%, so my credit limit would have to be several millions to have a gain that big, and would have needed thousands of VR's.
Yah? My reason is better. :P
"להסתובב זה לא אומר להיות חופשי"

Offline henche

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Offline Achas Veachas

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Offline Myccrabbi

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Re: Whats the story with BitCoins ?
« Reply #129 on: January 16, 2015, 02:39:51 PM »
Randomly bumped into this thread,

The only good you can do with bit coins is that you can make transections on the dark net...
He wants to buy some tanks?
If u work for a living, why kill urself working?

Offline rockstarhockstar

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Re: Whats the story with BitCoins ?
« Reply #130 on: March 09, 2015, 03:15:18 PM »
Anyone here know anything about bitcoinformiles.com?

Offline Copernicus

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Do you use Bitcoin?
« Reply #131 on: June 29, 2015, 04:13:06 AM »
Hi!  I finally registered as a forum user after lurking here for a long time.

I'm curious to know how many forum users are using Bitcoin for either investment, purchases, or sending money.

I myself use it for all three purposes, though lately have found it to be the easiest, cheapest, and fastest way to transfer money between my bank accounts in various countries.  It's especially useful to me for transferring money from Asia to my European accounts.  Apart from sending limits imposed by some Asian banks, international bank transfers from Asia can also be very costly and time consuming to do via the local banking system.

With an increasing number of airlines and hotels accepting Bitcoin, as well as Expedia, I do sometimes use it for travel expenses as well.  I'm sure a lot of you frequent flyers are cringing at all the lost points that could've been accrued by using a credit card, but since I'm not a U.S. citizen, unfortunately I can't take advantage of those offers.

Do you use Bitcoin?

Offline yakrot

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Re: Do you use Bitcoin?
« Reply #132 on: June 29, 2015, 04:14:57 AM »
Hi!  I finally registered as a forum user after lurking here for a long time.

I'm curious to know how many forum users are using Bitcoin for either investment, purchases, or sending money.

I myself use it for all three purposes, though lately have found it to be the easiest, cheapest, and fastest way to transfer money between my bank accounts in various countries.  It's especially useful to me for transferring money from Asia to my European accounts.  Apart from sending limits imposed by some Asian banks, international bank transfers from Asia can also be very costly and time consuming to do via the local banking system.

With an increasing number of airlines and hotels accepting Bitcoin, as well as Expedia, I do sometimes use it for travel expenses as well.  I'm sure a lot of you frequent flyers are cringing at all the lost points that could've been accrued by using a credit card, but since I'm not a U.S. citizen, unfortunately I can't take advantage of those offers.

Do you use Bitcoin?
Welcome to the forums. Interesting question, I myself do not use it at all.

Offline Copernicus

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Re: Do you use Bitcoin?
« Reply #133 on: June 29, 2015, 04:21:47 AM »
Thanks yakrot!  Actually it would be interesting to know if anyone hasn't even heard of Bitcoin as well. 

Offline yakrot

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Re: Do you use Bitcoin?
« Reply #134 on: June 29, 2015, 08:03:10 AM »
Thanks yakrot!  Actually it would be interesting to know if anyone hasn't even heard of Bitcoin as well.
Definitely not gonna catch me there

Offline good sam

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Re: Do you use Bitcoin?
« Reply #135 on: June 29, 2015, 08:07:58 AM »
There's a bitcoin thread.
If you don't care why would you comment?
HT: DMYD

Offline lubaby

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Re: Do you use Bitcoin?
« Reply #136 on: June 29, 2015, 08:15:46 AM »

Offline Copernicus

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Re: Do you use Bitcoin?
« Reply #137 on: June 29, 2015, 08:29:33 AM »
Cheers.  Apologies if I shouldn't have started this thread but as a noob here at DDF, I wasn't sure if I should hijack that thread. 

Now I don't know what to do....  ;D

Offline freddy

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Re: Do you use Bitcoin?
« Reply #138 on: June 29, 2015, 06:35:53 PM »
With an increasing number of airlines and hotels accepting Bitcoin, as well as Expedia, I do sometimes use it for travel expenses as well.  I'm sure a lot of you frequent flyers are cringing at all the lost points that could've been accrued by using a credit card, but since I'm not a U.S. citizen, unfortunately I can't take advantage of those offers.
Do you use Bitcoin?
What kind of third world country do you live in? No credit card bonuses? ::)
Do you use Bitcoin?

Thanks yakrot!  Actually it would be interesting to know if anyone hasn't even heard of Bitcoin as well. 
Start poll?
« Last Edit: June 29, 2015, 06:41:17 PM by freddy »
"Judge me by the enemies I make"

Offline Copernicus

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Re: Do you use Bitcoin?
« Reply #139 on: June 30, 2015, 12:13:09 AM »
What kind of third world country do you live in? No credit card bonuses?

Haha!  From the limited research I've done, I've found the offers in Europe to be nowhere near as generous as some you find in the States.  I should look at this again though.

Actually, a lot of retailers (like Dell) are offering pretty significant discounts for purchases paid with Bitcoin.  Not saying this defeats credit card offers though.

I'm not a fan of polls and prefer comments.