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 347672 times)

Offline henche

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Re: BitCoin Master Thread
« Reply #1060 on: May 25, 2018, 02:00:48 PM »
*looks for unlike button

You're joking, right?

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #1061 on: May 25, 2018, 03:02:29 PM »
As well as bit coin itself

You believe Bitcoin is vulnerable to 51% attack?
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Offline henche

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Re: BitCoin Master Thread
« Reply #1062 on: May 25, 2018, 03:25:08 PM »
You believe Bitcoin is vulnerable to 51% attack?

not really the point.  Bitcoin gold isn't a scam because it's vulnerable to 51% attack.

I was responding to
This can be said about most of the alt-coins out there. Even many of the ones that are not scams, aren't really coins as much as they are blockchain projects.

Offline ludmila

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Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #1064 on: May 27, 2018, 01:46:11 AM »
not really the point.  Bitcoin gold isn't a scam because it's vulnerable to 51% attack.

I was responding to

I dont understand what you are saying.

Offline aygart

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Re: BitCoin Master Thread
« Reply #1065 on: May 27, 2018, 03:03:02 PM »
I dont understand what you are saying.
It is not that vulnerability which makes it a scam.
Feelings don't care about your facts

Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #1066 on: May 27, 2018, 04:25:30 PM »
It is not that vulnerability which makes it a scam.

Bitcoin is not a scam and not susceptible to 51% attack.

Bitcoin Gold is a scam and is vulnerable.

Alt-coins in general are more susceptible to hackers and many are scams.

Many alt-coins are more like Blockchain projects than currency per se.

Which statement is being argued against?

Offline henche

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Re: BitCoin Master Thread
« Reply #1067 on: May 27, 2018, 05:58:59 PM »
Bitcoin is not a scam and not susceptible to 51% attack.

Bitcoin Gold is a scam and is vulnerable.

Alt-coins in general are more susceptible to hackers and many are scams.

Many alt-coins are more like Blockchain projects than currency per se.

Which statement is being argued against?

1

Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #1068 on: May 27, 2018, 09:31:07 PM »
1

I get it, you are not into cryptocurrencies.
« Last Edit: May 27, 2018, 11:16:35 PM by Yitzshpitz »

Offline jaywhy

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Re: BitCoin Master Thread
« Reply #1069 on: May 31, 2018, 12:47:40 PM »
Bitcoin is not a scam and not susceptible to 51% attack.

Bitcoin Gold is a scam and is vulnerable.

Alt-coins in general are more susceptible to hackers and many are scams.

Many alt-coins are more like Blockchain projects than currency per se.

Which statement is being argued against?
Every coin is potentially susceptible to 51% attacks. It’s a question of the economic costs of acquiring the equipment and electricity to mount a 51% attack against a particular chain vs mining it yourself to make more profits. It has never made economic sense to attack the bitcoin blockchain and it continues to have the most hashpower, making it most resistant to 51% attacks. Now that there is futures trading on many coins, an attacker has the ability to high leverage short a coin and profit hugely from the attack without taking possession of “physical” coins, which is in essence going long.  Expect these attacks to become far more common, especially with the garbage coins that use the same algorithms as existing majors (sha256, equihash, ethhash etc) and the ability to short.

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Re: BitCoin Master Thread
« Reply #1070 on: May 31, 2018, 09:30:20 PM »
Every coin is potentially susceptible to 51% attacks. It’s a question of the economic costs of acquiring the equipment and electricity to mount a 51% attack against a particular chain vs mining it yourself to make more profits. It has never made economic sense to attack the bitcoin blockchain and it continues to have the most hashpower, making it most resistant to 51% attacks. Now that there is futures trading on many coins, an attacker has the ability to high leverage short a coin and profit hugely from the attack without taking possession of “physical” coins, which is in essence going long.  Expect these attacks to become far more common, especially with the garbage coins that use the same algorithms as existing majors (sha256, equihash, ethhash etc) and the ability to short.

Mining Bitcoin is not really that profitable and the cost constraint makes it next to impossible to be susceptible to 51% attack. Honestly the bigger problem is that many people have misplaced their keys or used insecure devices to access their coins, which lowers the already limited supply of available bitcoins.

Offline jaywhy

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Re: BitCoin Master Thread
« Reply #1071 on: May 31, 2018, 10:38:46 PM »
Mining Bitcoin is not really that profitable and the cost constraint makes it next to impossible to be susceptible to 51% attack. Honestly the bigger problem is that many people have misplaced their keys or used insecure devices to access their coins, which lowers the already limited supply of available bitcoins.
How is this a problem? The more lost bitcoins, the better it is for everyone else.

Offline aygart

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Re: BitCoin Master Thread
« Reply #1072 on: June 01, 2018, 12:03:26 AM »
How is this a problem? The more lost bitcoins, the better it is for everyone else.
In the same sentence they will say that there is not enough supply of bitcoin to be sustainable even as the alt-currency it is today and also it will become the currency of the world.
Feelings don't care about your facts

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #1073 on: June 01, 2018, 12:22:47 AM »
In the same sentence they will say that there is not enough supply of bitcoin to be sustainable even as the alt-currency it is today and also it will become the currency of the world.

There is always a sustainable supply when you can divide it to like 8 decimal points.
That doesn't mean that it can't go up in value when supply dwindles.
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Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #1074 on: June 01, 2018, 12:27:16 AM »
How is this a problem? The more lost bitcoins, the better it is for everyone else.

I meant a problem in terms of security and potential for loss of money for people who are careless.

Offline aygart

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Re: BitCoin Master Thread
« Reply #1075 on: June 01, 2018, 09:05:39 AM »
There is always a sustainable supply when you can divide it to like 8 decimal points.
That doesn't mean that it can't go up in value when supply dwindles.
It is more likely that off it is successful enough for anyone to even think that supply will realistically dwindle them it will be replaced by one which won't.
Feelings don't care about your facts

Offline aygart

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Re: BitCoin Master Thread
« Reply #1076 on: June 05, 2018, 02:17:21 PM »
Feelings don't care about your facts

Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #1077 on: June 05, 2018, 10:29:57 PM »
Are we there yet?
I just found a new supply of forks!

Offline yuneeq

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Re: BitCoin Master Thread
« Reply #1078 on: June 05, 2018, 11:31:53 PM »
Are we almost at the end yet?

Are we there yet?

Up about 13% since the last time this was asked, but no, we’re not there yet.
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Offline ChaimMoskowitz

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Re: BitCoin Master Thread
« Reply #1079 on: June 11, 2018, 11:35:50 AM »
Up about 13% since the last time this was asked, but no, we’re not there yet.
How about now? Are we there yet?  :)
I just found a new supply of forks!