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 347630 times)

Offline chayal101

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Re: BitCoin Master Thread
« Reply #1620 on: April 13, 2021, 01:11:56 AM »
Watch Ripple goooooo!! I was going to buy a while ago right when coinbase pulled the plug after SEC lawsuit & I was nervous trusting another website... Any suggestions for the safest place to buy XRP? Do you believe xrp has strong potential once SEC issue is settled? Oh, & how do ppl cash out these days??
« Last Edit: April 13, 2021, 01:15:49 AM by chayal101 »
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״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר – יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline Mordyk

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Re: BitCoin Master Thread
« Reply #1622 on: April 13, 2021, 06:15:57 PM »
Watch Ripple goooooo!! I was going to buy a while ago right when coinbase pulled the plug after SEC lawsuit & I was nervous trusting another website... Any suggestions for the safest place to buy XRP? Do you believe xrp has strong potential once SEC issue is settled? Oh, & how do ppl cash out these days??
i have XRP stuck in Coinbase. LOL  good thing its stuck. didnt have a chance to move around and sell it

i have some XRP sitting around in coinbase. any way to turn thenm into btc or cash? government restricted Ripple for some reason.
« Last Edit: April 13, 2021, 06:32:17 PM by Mordyk »
#TYH

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #1625 on: April 16, 2021, 12:42:11 AM »
Things are wild!

Amazing to see the effect of BTC on LTC, DODGE and even TSLA.

 Wonder if it's the beginning of the momentum or I should pull out now from all four?

Doggy Coin at $0.29 today... What in the world.

 Still kicking myself for buying so little when it was not even a cent.

  What's your guys take. Seems like tomorrow I'm going to see it at $0.50

 Anyone putting in at this price?

 What about LTC?
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Offline lubaby

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Re: BitCoin Master Thread
« Reply #1626 on: April 16, 2021, 12:51:33 AM »
Things are wild!

Doggy Coin at $0.29 today... What in the world.

 Still kicking myself for buying so little when it was not even a cent.

  What's your guys take. Seems like tomorrow I'm going to see it at $0.50

 Anyone putting in at this price?

 What about LTC?
Sold some tonight at $0.32 :)

You can’t live your life on being a “what if.. millionaire”.

Offline AsherO

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Re: BitCoin Master Thread
« Reply #1627 on: April 16, 2021, 08:04:44 AM »
Sold some tonight at $0.32 :)

The question is when to get out, can’t see how this sharp increase is here to stay.
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Offline Lurker

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Re: BitCoin Master Thread
« Reply #1628 on: April 16, 2021, 08:24:23 AM »
Sold some tonight at $0.32 :)


Mazal tov! Use it for good things and in good health.

The question is when to get out, can’t see how this sharp increase is here to stay.

As CV is fond of saying, no one ever lost money taking profits.
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Offline ExGingi

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Re: BitCoin Master Thread
« Reply #1629 on: April 16, 2021, 08:38:24 AM »
Turkey banning crypto payments. Will other countries follow?
I've been waiting over 5 years with bated breath for someone to say that!
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Offline shmebeble

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Re: BitCoin Master Thread
« Reply #1630 on: April 16, 2021, 09:01:48 AM »
Turkey banning crypto payments. Will other countries follow?
why would other countries follow?

Offline chayal101

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Re: BitCoin Master Thread
« Reply #1631 on: April 16, 2021, 09:48:28 AM »
Sold some tonight at $0.32 :)

You can’t live your life on being a “what if.. millionaire”.
Same here B'H. Almost thought I'd lose it since Robinhood had some random 'issues'... Does coinbase even support doge? Gotta check.
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Offline yos9694

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Re: BitCoin Master Thread
« Reply #1632 on: April 16, 2021, 09:56:31 AM »
Same here B'H. Almost thought I'd lose it since Robinhood had some random 'issues'... Does coinbase even support doge? Gotta check.

No. Binance US does though.

I feel like I don't belong in this thread anymore, having exited months ago. Its true that no one lost money taking profits but that doesn't stop me from kicking myself. Still, no way in the world would I have been able to continue holding Doge through a climb like this- it's unbelievable.

Offline chayal101

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Re: BitCoin Master Thread
« Reply #1633 on: April 16, 2021, 10:05:13 AM »
No. Binance US does though.

I feel like I don't belong in this thread anymore, having exited months ago. Its true that no one lost money taking profits but that doesn't stop me from kicking myself. Still, no way in the world would I have been able to continue holding Doge through a climb like this- it's unbelievable.
Well lots of us kicking ourselves for not having bought bitcoin at 5k, so we 'trying' to make up for it. I'm sure if I would have bought the bitcoin back then, we would have sold it for 20k which would have been awesome even if it's at 60k today... I have atleast 1 or (100s) of each popular crypto. Dogecoin was really cheap so it was a no brainer to invest over 2k worth & let it play out.
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Re: BitCoin Master Thread
« Reply #1634 on: April 16, 2021, 10:17:12 AM »
As CV is fond of saying, no one ever lost money taking profits.

Is there a strategy for staggering the profit taking to lock in some (and more over time) gains but still play for upside?

Practical question, someone bought Doge a few days ago and already tripled their money. How much do you sell at this point? A half? Two thirds? Depends on your risk appetite?
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Re: BitCoin Master Thread
« Reply #1635 on: April 16, 2021, 10:24:37 AM »
Is there a strategy for staggering the profit taking to lock in some (and more over time) gains but still play for upside?

Practical question, someone bought Doge a few days ago and already tripled their money. How much do you sell at this point? A half? Two thirds? Depends on your risk appetite?
The fact that you already have the item should never be considered a reason for keeping it. Only invest however much you would according to the risks of the investment and how much you can afford to lose.
For example, if you invested $5000 at 5 cents and now its worth 20 cents you made 400% profit at 20000. If you would invest $20000 only then is it worth it to hold your investment. If you would invest $10000 then sell half and hold half. But dont look at the fact that you already have it as a reason to hold.

Edit: This is more applicable for highly volitale stocks. In theory it applies to all investments, but those with a proven history you should use a wider time frame to analyze the value of the investment, the value of, lets say a quarter, as opposed to the value on any given day.
« Last Edit: April 16, 2021, 10:29:22 AM by MoYS »

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #1636 on: April 16, 2021, 10:42:00 AM »
The fact that you already have the item should never be considered a reason for keeping it. Only invest however much you would according to the risks of the investment and how much you can afford to lose.
For example, if you invested $5000 at 5 cents and now its worth 20 cents you made 400% profit at 20000. If you would invest $20000 only then is it worth it to hold your investment. If you would invest $10000 then sell half and hold half. But dont look at the fact that you already have it as a reason to hold.

Edit: This is more applicable for highly volitale stocks. In theory it applies to all investments, but those with a proven history you should use a wider time frame to analyze the value of the investment, the value of, lets say a quarter, as opposed to the value on any given day.

Mostly agreed, but transaction costs need to be taken into account.
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Offline myi

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Re: BitCoin Master Thread
« Reply #1637 on: April 16, 2021, 10:56:29 AM »
Am I going to check back mtz shbs and this is going to be at $1?

 Am I supposed to be buying now?
  Or unloading profits now?
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Re: BitCoin Master Thread
« Reply #1638 on: April 16, 2021, 11:11:33 AM »
Mostly agreed, but transaction costs need to be taken into account.
those are nominal for large quantities

Offline shmebeble

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Re: BitCoin Master Thread
« Reply #1639 on: April 16, 2021, 11:12:15 AM »
The fact that you already have the item should never be considered a reason for keeping it. Only invest however much you would according to the risks of the investment and how much you can afford to lose.
For example, if you invested $5000 at 5 cents and now its worth 20 cents you made 400% profit at 20000. If you would invest $20000 only then is it worth it to hold your investment. If you would invest $10000 then sell half and hold half. But dont look at the fact that you already have it as a reason to hold.

Edit: This is more applicable for highly volitale stocks. In theory it applies to all investments, but those with a proven history you should use a wider time frame to analyze the value of the investment, the value of, lets say a quarter, as opposed to the value on any given day.
Ever read thinking fast and slow?