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 347545 times)

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #700 on: January 18, 2018, 09:57:43 AM »
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.
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.
Why do you always attack those personally that disagree with you?
There are many economist that believe this is a scam. You don't need to agree with them but to deny the fact is ridicules.
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Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #701 on: January 18, 2018, 10:00:20 AM »
Why do you always attack those personally that disagree with you?
There are many economist that believe this is a scam. You don't need to agree with them but to deny the fact is ridicules.

What facts? That some economists are not into it? Its risky, we get it, but that is not a fact that tells me that it is a scam just because some say that.

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Re: BitCoin Master Thread
« Reply #702 on: January 18, 2018, 10:00:21 AM »
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.
That is not an intrinsic value. A dollar also has no intrinsic value and is therefore called a fiat currency which means that its value stems from a fiat of the US government. If you fear that North Korea will destroy the US government then that will lower the value of the dollar since there is that risk of it being destroyed. If Trump should roll over one day and decide that we will no longer use dollars but instead use BIg Ts and dollars will no longer be accepted anywhere then the dollar will become valueless. For now the backing of the US government does give the dollar a value. What gives value to a bitcoin other than that some hacker in his pajamas is willing to accept it for ransomware?
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #703 on: January 18, 2018, 10:00:33 AM »
https://www.google.com/amp/s/www.forbes.com/sites/jayadkisson/2017/12/28/the-great-bitcoin-scam/amp/

"Here, the technological difference with cybercurrencies, or crypocurrencies if you prefer, is that they don't require a middleman such a clearing bank. Value, whatever it is, goes directly from A to B, with nobody in the middle."

You reading an article about Bitcoin written by someone that doesn't know what miners or nodes are.
Sad.
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Offline aygart

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Re: BitCoin Master Thread
« Reply #704 on: January 18, 2018, 10:03:19 AM »
Since you told us that you're the great economics expert and only you can understand value.
source?
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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #705 on: January 18, 2018, 10:03:22 AM »
Why do you always attack those personally that disagree with you?

Go back and you will see that I was defending myself from the great economics expert who said I know nothing.
You reap what you sow.

Quote
There are many economist that believe this is a scam. You don't need to agree with them but to deny the fact is ridicules.

Go ahead and call it whatever you want, but first educate yourself and don't get the facts.
Also you can read daily about famous "experts" that flip flopped.
You can start with https://www.cnbc.com/2018/01/09/jamie-dimon-says-he-regrets-calling-bitcoin-a-fraud.html

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Re: BitCoin Master Thread
« Reply #706 on: January 18, 2018, 10:04:02 AM »
 

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.
Why does the cause of something define it?
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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #707 on: January 18, 2018, 10:07:09 AM »
That is not an intrinsic value. A dollar also has no intrinsic value and is therefore called a fiat currency which means that its value stems from a fiat of the US government. If you fear that North Korea will destroy the US government then that will lower the value of the dollar since there is that risk of it being destroyed. If Trump should roll over one day and decide that we will no longer use dollars but instead use BIg Ts and dollars will no longer be accepted anywhere then the dollar will become valueless. For now the backing of the US government does give the dollar a value. What gives value to a bitcoin other than that some hacker in his pajamas is willing to accept it for ransomware?

All that rambling and you still ignored what I wrote. US dollar can pay taxes. But if I want to buy something anonymously and privately, or send money around the world instantly, what else can I do it with? So only if I can use something for taxes it gives it value?
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Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #708 on: January 18, 2018, 10:08:21 AM »
What facts? That some economists are not into it? Its risky, we get it, but that is not a fact that tells me that it is a scam just because some say that.
The fact that many respected individuals (economist/investors) believe it is a scam. They can all be wrong but you need to consider their views if you want to be objective.
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Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #709 on: January 18, 2018, 10:08:26 AM »
Why does the cause of something define it?

Ok but that was your point as to why a nickel has value but bitcoin doesnt

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #710 on: January 18, 2018, 10:09:01 AM »
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Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #711 on: January 18, 2018, 10:10:09 AM »
Also you can read daily about famous "experts" that flip flopped.
You can start with https://www.cnbc.com/2018/01/09/jamie-dimon-says-he-regrets-calling-bitcoin-a-fraud.html
This is fair and an honest point.
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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #712 on: January 18, 2018, 10:13:00 AM »
The fact that many respected individuals (economist/investors) believe it is a scam. They can all be wrong but you need to consider their views if you want to be objective.

The experts entitled to their opinions. As are the experts that disagree with your experts.
But respectfully, you are not an expert, and probably not even a beginner yet, so it's kinda foolish when you take sides or quote articles from people that haven't even read the Bitcoin whitepaper.
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Offline aygart

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Re: BitCoin Master Thread
« Reply #713 on: January 18, 2018, 10:13:31 AM »
All that rambling and you still ignored what I wrote. US dollar can pay taxes. But if I want to buy something anonymously and privately, or send money around the world instantly, what else can I do it with? So only if I can use something for taxes it gives it value?
A bitcoin has value today since you can sell it for something. That was the same with dotcoms and tulip bulbs and hundreds of other things which of this sort. The current value of bitcoin has nothing to do with intrinsic value but rather with the hype around it and the greater fool. Those who realize this can profit off of bitcoin by profiting off of the greater fool. those who invest in it the same way people felt they can invest in "companies" with no product just because they were called something.com will be hurt the same way as them as well.
Feelings don't care about your facts

Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #714 on: January 18, 2018, 10:13:42 AM »
The fact that many respected individuals (economist/investors) believe it is a scam. They can all be wrong but you need to consider their views if you want to be objective.

Many others disagree (and have already made a lot of money) just like many investments and business opportunities. I think the point is that people who are into crypto understand the risks and read the articles from those that dismiss it but its annoying hearing from people who dont really understand why its a scam who argue completely based on an article from CNBC.

Offline aygart

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Re: BitCoin Master Thread
« Reply #715 on: January 18, 2018, 10:16:49 AM »
Feelings don't care about your facts

Offline aygart

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Re: BitCoin Master Thread
« Reply #716 on: January 18, 2018, 10:17:37 AM »
The fact that many respected individuals (economist/investors) believe it is a scam. They can all be wrong but you need to consider their views if you want to be objective.
This sounds like an appeal to authority.
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #717 on: January 18, 2018, 10:19:50 AM »
A bitcoin has value today since you can sell it for something. That was the same with dotcoms and tulip bulbs and hundreds of other things which of this sort. The current value of bitcoin has nothing to do with intrinsic value but rather with the hype around it and the greater fool. Those who realize this can profit off of bitcoin by profiting off of the greater fool. those who invest in it the same way people felt they can invest in "companies" with no product just because they were called something.com will be hurt the same way as them as well.

I have said many times in the past hour that some cryptos are "overvalued", but don't confuse "overvalued" for "useless".
The main feature is not that that it's an investment tool. Crypto would've never became a thing if the hundreds of thousands of early enthusiasts believed that.
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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #718 on: January 18, 2018, 10:20:54 AM »
Or maybe logic.

Lol.
Keep the ad hominem coming.
That's your 3rd time now, and you still haven't disproved what I said.

What currency can you use for instant, around the world transactions? And why does that not give crypto value?
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Offline aygart

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Re: BitCoin Master Thread
« Reply #719 on: January 18, 2018, 10:22:29 AM »
I have said many times in the past hour that some cryptos are "overvalued", but don't confuse "overvalued" for "useless".
The main feature is not that that it's an investment tool. Crypto would've never became a thing if the hundreds of thousands of early enthusiasts believed that.
a grain of sand from my front yard is also not useless.
Feelings don't care about your facts