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 70613 times)

Offline Mikeoracle

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Re: BitCoin Master Thread
« Reply #375 on: December 05, 2017, 10:13:43 PM »
Finally broke $12k

Offline henche

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Re: BitCoin Master Thread
« Reply #376 on: December 05, 2017, 10:24:26 PM »

Offline Jm1248

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Re: BitCoin Master Thread
« Reply #377 on: December 05, 2017, 10:28:20 PM »
Following

Offline hachover

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Re: BitCoin Master Thread
« Reply #378 on: December 05, 2017, 10:40:40 PM »
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 #379 on: December 05, 2017, 10:48:54 PM »
In the old days, there was a saying by Jesse Livermore--when your barber and the shoe shine boy start giving stock tips, that is the time to sell everything. This past week, I was asked what I think of Bitcoin by people who never traded or invested in stocks ,fx,futures etc.   The parabolic rise is by all the late comers buying like crazy at these prices, currently $12270  see weekly chart as of now below, up  OVER $6000 in 3 weeks, worth 10 gold ounces each  ???  The CME and I think CBOT will start offering futures soon, then the hedgies will  buy it big first to newer highs to get more suckers in and then reverse and short it till it is almost worthless. And all the late buyers will become insolvent. IMHO

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Offline henche

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Re: BitCoin Master Thread
« Reply #380 on: December 05, 2017, 11:04:45 PM »
In the old days, there was a saying by Jesse Livermore--when your barber and the shoe shine boy start giving stock tips, that is the time to sell everything. This past week, I was asked what I think of Bitcoin by people who never traded or invested in stocks ,fx,futures etc.   The parabolic rise is by all the late comers buying like crazy at these prices, currently $12270  see weekly chart as of now below, up  OVER $6000 in 3 weeks, worth 10 gold ounces each  ???  The CME and I think CBOT will start offering futures soon, then the hedgies will  buy it big first to newer highs to get more suckers in and then reverse and short it till it is almost worthless. And all the late buyers will become insolvent. IMHO

https://www.tradingview.com/x/TAa5mLi1/

So you're saying we should get in quick so we cam make money before the bust

Offline ludmila

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Re: BitCoin Master Thread
« Reply #381 on: December 05, 2017, 11:39:13 PM »
So you're saying we should get in quick so we cam make money before the bust
No, the easy money was already made, I am just watching this madness from the side :)
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Offline ah giten

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Re: BitCoin Master Thread
« Reply #382 on: December 06, 2017, 01:37:50 AM »
Gemini is worth checking out also, and you will need a bittrex account if you want to trade something other than the big 2
coinbase lets you buy with credit card, no need to wait for the money to clear. and yes the 4% in charges will be back. A; credit card points. B; Bitcion rises faster than 4% in 4 days
(vs Gemini lets you trade while the deposit still pending)

Offline shlonx

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Re: BitCoin Master Thread
« Reply #383 on: December 06, 2017, 01:47:47 AM »
Coinbase has crazy limits on how much you can spend, though. After the first $300 on the CC, you have to wait a loooong time until you could buy another decent amount. I could've made thousands already if not for Coinbase's limits (wanted to buy a whole coin a few weeks ago, when it dropped to $5500, but couldn't due to the limits).
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Offline ah giten

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Re: BitCoin Master Thread
« Reply #384 on: December 06, 2017, 02:03:20 AM »
Coinbase has crazy limits on how much you can spend, though. After the first $300 on the CC, you have to wait a loooong time until you could buy another decent amount. I could've made thousands already if not for Coinbase's limits (wanted to buy a whole coin a few weeks ago, when it dropped to $5500, but couldn't due to the limits).
my start was $300 per week
and after spending $775 it goes up
not sure what it depends. did you verify your identity?

Offline hachover

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Re: BitCoin Master Thread
« Reply #385 on: December 06, 2017, 07:39:50 AM »
(wanted to buy a whole coin a few weeks ago, when it dropped to $5500, but couldn't due to the limits).

Why not buy a whole Satoshi or two? They are still priced at less than a penny each. No need to buy 100 million of them at once
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Offline Emkay

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Re: BitCoin Master Thread
« Reply #386 on: December 06, 2017, 07:45:47 AM »
Coinbase has crazy limits on how much you can spend, though. After the first $300 on the CC, you have to wait a loooong time until you could buy another decent amount. I could've made thousands already if not for Coinbase's limits (wanted to buy a whole coin a few weeks ago, when it dropped to $5500, but couldn't due to the limits).
Should have sent a wire.

Offline henche

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Re: BitCoin Master Thread
« Reply #387 on: December 06, 2017, 10:48:55 AM »
Yeah, me too. I wanted to buy more Japanese Yen, but the bank said I could only but 200 dollars worth. Oh well.

Totally a viable currency if you can't even buy it.

Offline aygart

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Re: BitCoin Master Thread
« Reply #388 on: December 06, 2017, 11:52:27 AM »
Yeah, me too. I wanted to buy more Japanese Yen, but the bank said I could only but 200 dollars worth. Oh well.

Totally a viable currency if you can't even buy it.
He could have funded his account in ways other that a CC and done it. The issue was his funding the account.
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Offline aygart

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Re: BitCoin Master Thread
« Reply #389 on: December 06, 2017, 11:53:02 AM »
coinbase lets you buy with credit card, no need to wait for the money to clear. and yes the 4% in charges will be back. A; credit card points. B; Bitcion rises faster than 4% in 4 days
(vs Gemini lets you trade while the deposit still pending)
And what happens when it goes down instead of up?
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.