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 347404 times)

Offline Mordyk

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Re: BitCoin Master Thread
« Reply #560 on: December 22, 2017, 05:12:53 AM »



Was told Tues night about a guy in shul that has no job borrowed 20k from ppl to buy bitcoins....

This is where it gets stupid...
FTFY
#TYH

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #562 on: December 22, 2017, 06:16:18 AM »
Was told Tues night about a guy in shul that has no job borrowed 20k from ppl to buy bitcoins....

This is where it gets scary...

Unfortunately completely typical. The whales always hold the doors open long enough to switch places with the naive retail investor
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #563 on: December 22, 2017, 06:48:35 AM »
Was told Tues night about a guy in shul that has no job borrowed 20k from ppl to buy bitcoins....

This is where it gets scary...
I actually find this story very hard to believe.

It's a story someone enjoyed making up just because that person suffers from a certain syndrome that compelling such person to make up stories.

It's impossible that anyone in shul hasn't heard that this is a bone fide bubble of epic proportion, in something one can't even smell or see to say מה רבו מעשיך. Let alone people lending that much money to an unemployed person for this purpose...

I'm surprised at you that you even considered repeating it.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Ergel

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Re: BitCoin Master Thread
« Reply #564 on: December 22, 2017, 08:10:00 AM »
I actually find this story very hard to believe.

It's a story someone enjoyed making up just because that person suffers from a certain syndrome that compelling such person to make up stories.

It's impossible that anyone in shul hasn't heard that this is a bone fide bubble of epic proportion, in something one can't even smell or see to say מה רבו מעשיך. Let alone people lending that much money to an unemployed person for this purpose...

I'm surprised at you that you even considered repeating it.
I think you're extremely naive. There are unfortunately a lot of stupid out there
Life isn't about checking the boxes. Nobody cares.

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #565 on: December 22, 2017, 08:24:18 AM »
I think you're extremely naive. There are unfortunately a lot of stupid out there
Stupid enough to lend money to an unemployed guy to put into Bitcoin? Call me naive, but I still don't believe the story.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Mordyk

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Re: BitCoin Master Thread
« Reply #566 on: December 22, 2017, 08:26:30 AM »
Stupid enough to lend money to an unemployed guy to put into Bitcoin? Call me naive, but I still don't believe the story.
Maybe he just asked to borrow $20k. Without knowing what the guy wants to do with it
#TYH

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Re: BitCoin Master Thread
« Reply #567 on: December 22, 2017, 08:52:58 AM »
I'm on board with you ideologically, though its been a long time since i traded any crypto. I think a phoenix will rise from the ashes
What many are missing, and IIRC, you had mentioned this earlier, the rise itself is something which runs against Bitcoin having real value. Its entire value is in its potential to become a currency. The volatility prevents that. All the more so after a crash. When a stock crashes there can still be a remaining value in the company and its assets. Not so with Bitcoin.
Feelings don't care about your facts

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #568 on: December 22, 2017, 08:57:14 AM »
What many are missing,
It is gambling!
I just found a new supply of forks!

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Re: BitCoin Master Thread
« Reply #569 on: December 22, 2017, 08:58:10 AM »
Feelings don't care about your facts

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #570 on: December 22, 2017, 09:00:03 AM »
You are being generous.
This thing is a gamblers wet dream. It is like getting 100:1 odds when it should be 2:1.
I just found a new supply of forks!

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Re: BitCoin Master Thread
« Reply #571 on: December 22, 2017, 09:10:14 AM »
This thing is a gamblers wet dream. It is like getting 100:1 odds when it should be 2:1.
I am not a gambler and don't even understand what you are saying.
Feelings don't care about your facts

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #572 on: December 22, 2017, 09:19:51 AM »
I am not a gambler and don't even understand what you are saying.
It is like flipping a coin. You give me 100 if I guess right and I give you 2 if I guess wrong. It is a sure thing high for them.
I just found a new supply of forks!

Offline Yammer

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Re: BitCoin Master Thread
« Reply #573 on: December 22, 2017, 10:25:45 AM »


I actually find this story very hard to believe.

It's a story someone enjoyed making up just because that person suffers from a certain syndrome that compelling such person to make up stories.

It's impossible that anyone in shul hasn't heard that this is a bone fide bubble of epic proportion, in something one can't even smell or see to say מה רבו מעשיך. Let alone people lending that much money to an unemployed person for this purpose...

I'm surprised at you that you even considered repeating it.

While the person that told me the story is extremely credible to me, I have no issue with you not believing it.

There are unfortunately a lot of stupid out there

Unfortunately

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #574 on: December 22, 2017, 11:29:15 AM »
Maybe he just asked to borrow $20k. Without knowing what the guy wants to do with it
And maybe someone was naive enough to lend $20k to an unemployed person without asking any questions. :P
I've been waiting over 5 years with bated breath for someone to say that!
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Offline Mordyk

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Re: BitCoin Master Thread
« Reply #575 on: December 22, 2017, 11:31:58 AM »
And maybe someone was naive enough to lend $20k to an unemployed person without asking any questions.
Welcome to the real world.  The world is full of naive people... or BS'ers that say they have good job they just need this money for a couple of days. Etc...
#TYH

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Re: BitCoin Master Thread
« Reply #576 on: December 22, 2017, 11:32:01 AM »
This is pretty insane, thinking of changing my orginizations name to cryptoblockchainbitcurrency.
https://finance.yahoo.com/news/factbox-companies-change-names-businesses-154208618.html
(Reuters) - Many obscure companies are pivoting operations or changing their names to cash-in on the cryptocurrency wave, in a trend reminiscent of the dotcom boom. Beverage maker Long Island Iced Tea ...

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #577 on: December 22, 2017, 11:37:58 AM »
And maybe someone was naive enough to lend $20k to an unemployed person without asking any questions. :P
Friends and family come to mind.
I just found a new supply of forks!

Offline henche

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Re: BitCoin Master Thread
« Reply #578 on: December 22, 2017, 11:42:28 AM »
Coinbase suspended trading. 

Can you still get out on a different marketplace?


Offline ExGingi

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Re: BitCoin Master Thread
« Reply #579 on: December 22, 2017, 11:49:50 AM »
Friends and family come to mind.
Those should know better who they are dealing with.

FTR, I have given loans to people with the expectation of never getting repaid. If I do get repaid, it goes back into the fund for these purposes. As a matter of fact I actually once scolded one such person for avoiding me and not asking me for help anymore, and when he said that he still owes me, I just told him to forget about that one.
« Last Edit: December 22, 2017, 12:26:30 PM by ExGingi »
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan