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 66705 times)

Offline henche

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2011
  • Posts: 3776
  • Total likes: 356
  • DansDeals.com Hat Tips 0
    • View Profile
Re: Whats the story with BitCoins ?
« Reply #300 on: November 28, 2017, 03:48:55 PM »
great for shady underworld dealings and that is about it. It is not subject to monetary laws and therfore you are not breaking laws. you can gamble online with it. there have been some major security flaws and tons of bitcoins have been stolen.

Still seems on point (minus laws, no idea about that)

Offline SuperFlyer

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Jul 2009
  • Posts: 8609
  • Total likes: 41
  • DansDeals.com Hat Tips 0
    • View Profile
Re: BitCoin Master Thread
« Reply #301 on: November 28, 2017, 03:56:06 PM »
Would have loved to have placed a bit of money on it back then

Offline Mordyk

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2013
  • Posts: 2683
  • Total likes: 125
  • DansDeals.com Hat Tips 2
  • Gender: Male
    • View Profile
  • Programs: Hilton Diamond, SPG Gold and whatever
Re: BitCoin Master Thread
« Reply #302 on: November 28, 2017, 04:02:02 PM »
Would have loved to have placed a bit of money on it back then
ya think? ::)

Offline henche

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2011
  • Posts: 3776
  • Total likes: 356
  • DansDeals.com Hat Tips 0
    • View Profile
Re: BitCoin Master Thread
« Reply #303 on: November 28, 2017, 04:24:41 PM »
Would have loved to have placed a bit of money on it back then

I would have loved to have bet my life savings on the Patriots last year at halftime. 

Offline lubaby

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Jun 2010
  • Posts: 4330
  • Total likes: 180
  • DansDeals.com Hat Tips 12
  • Gender: Male
    • View Profile
  • Location: New York
  • Programs: Hertz PC, National EE
Re: BitCoin Master Thread
« Reply #304 on: November 28, 2017, 04:25:57 PM »
Would have loved to have placed a bit of money on it back then
Would have loved to still have the one I bought in Jan '15 at $285  :-\

Sold out at the $1000 range, and was happy then with what I made.

But "if only"...
Once the game is over, the king and the pawn go back in the same box.

Offline shlonx

  • Dansdeals Gold Elite
  • ***
  • Join Date: May 2015
  • Posts: 181
  • Total likes: 28
  • DansDeals.com Hat Tips 0
    • View Profile
Re: BitCoin Master Thread
« Reply #305 on: November 28, 2017, 08:44:40 PM »
Aaaaaand... it's 10k!
Brevity may be the soul of wit, but floridity is its spirit.

Offline Qwertyuiop

  • DansDeals Copper Elite
  • *
  • Join Date: Jan 2014
  • Posts: 22
  • Total likes: 6
  • DansDeals.com Hat Tips 0
    • View Profile
Re: BitCoin Master Thread
« Reply #306 on: November 28, 2017, 08:46:42 PM »
Aaaaaand... it's 10k!

100% Gambling and 100% bubble. Though it's possible it may go higher before the inevitable crash.

Offline ludmila

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Aug 2012
  • Posts: 4484
  • Total likes: 177
  • DansDeals.com Hat Tips 0
    • View Profile
  • Location: IND
  • Programs: Hilton Diamond,Marriott Platinum,SPG Platinum.
Re: BitCoin Master Thread
« Reply #307 on: November 28, 2017, 10:48:57 PM »
100% Gambling and 100% bubble. Though it's possible it may go higher before the inevitable crash.
100% with you on this, but as you said it might still go higher , I consider myself lucky that it is not easy to short this, so i just watched.
By the way, those who buy it are strong believers and most keep buying more and do not sell,a friend of my brother bought 50 bitcoins at around $750, and he is not selling.
I was the Best,still the Best, and will always be the Best.
Pele Good,Maradona Better, George Best.

Offline henche

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2011
  • Posts: 3776
  • Total likes: 356
  • DansDeals.com Hat Tips 0
    • View Profile
Re: BitCoin Master Thread
« Reply #308 on: November 28, 2017, 11:05:41 PM »
100% with you on this, but as you said it might still go higher , I consider myself lucky that it is not easy to short this, so i just watched.
By the way, those who buy it are strong believers and most keep buying more and do not sell,a friend of my brother bought 50 bitcoins at around $750, and he is not selling.

Yes, that is why there is so little actual trading of bit coin (ie, so little actual usage).  It's a commodity that is being hoarded.  Ironically, because it has no intrinsic value

Offline ludmila

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Aug 2012
  • Posts: 4484
  • Total likes: 177
  • DansDeals.com Hat Tips 0
    • View Profile
  • Location: IND
  • Programs: Hilton Diamond,Marriott Platinum,SPG Platinum.
Re: BitCoin Master Thread
« Reply #309 on: November 28, 2017, 11:21:52 PM »
Yes, that is why there is so little actual trading of bit coin (ie, so little actual usage).  It's a commodity that is being hoarded.  Ironically, because it has no intrinsic value
You said it :)
I was the Best,still the Best, and will always be the Best.
Pele Good,Maradona Better, George Best.

Offline aygart

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: May 2008
  • Posts: 6588
  • Total likes: 1319
  • DansDeals.com Hat Tips 7
    • View Profile
    • Lower Watt Energy Brokers
  • Programs: www.lowerwatt.com
Re: BitCoin Master Thread
« Reply #310 on: November 28, 2017, 11:43:27 PM »
Yes, that is why there is so little actual trading of bit coin (ie, so little actual usage).  It's a commodity that is being hoarded.  Ironically, because it has no intrinsic value
The rise and likely fall of bitcoin will likely be studied in Wharton etc. for years to come.
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.

Offline ludmila

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Aug 2012
  • Posts: 4484
  • Total likes: 177
  • DansDeals.com Hat Tips 0
    • View Profile
  • Location: IND
  • Programs: Hilton Diamond,Marriott Platinum,SPG Platinum.
Re: BitCoin Master Thread
« Reply #311 on: November 29, 2017, 12:28:53 AM »
The rise and likely fall of bitcoin will likely be studied in Wharton etc. for years to come.
Up another $810 in the last 3 hours trading at $10680.
I was the Best,still the Best, and will always be the Best.
Pele Good,Maradona Better, George Best.

Online Emkay

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Dec 2012
  • Posts: 14285
  • Total likes: 311
  • DansDeals.com Hat Tips 34
    • View Profile
  • Location: Where I ought to be
Re: BitCoin Master Thread
« Reply #312 on: November 29, 2017, 03:55:45 AM »
what goes up must come down eventually
One of the world's great falsehoods.

Offline a good yeshiva bachur

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Dec 2015
  • Posts: 2168
  • Total likes: 79
  • DansDeals.com Hat Tips 8
  • Gender: Male
    • View Profile
  • Location: Jerusalem
Re: BitCoin Master Thread
« Reply #313 on: November 29, 2017, 05:17:17 AM »
I've heard much of this Bitcoins and all and people making good money out of it. Is there any guide about it telling everything in clear way as how to invest and what returns to expect out of it.
Spoon feed style?

Offline a good yeshiva bachur

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Dec 2015
  • Posts: 2168
  • Total likes: 79
  • DansDeals.com Hat Tips 8
  • Gender: Male
    • View Profile
  • Location: Jerusalem