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 347588 times)

Offline Yo ssi

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Re: BitCoin Master Thread
« Reply #1320 on: January 06, 2021, 12:36:30 AM »
It's pretty well known.
Can you please explain?
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Offline Yo ssi

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Re: BitCoin Master Thread
« Reply #1321 on: January 06, 2021, 12:53:07 AM »
IMHO it's going to take quite a lot of years (if ever) to get people to trust technology. Even the current lead in encryption (AES-256) and hashing (SHA-256[512]) is starting to loose trust with the advance of quantum computing etc.
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Re: BitCoin Master Thread
« Reply #1322 on: January 06, 2021, 08:58:37 AM »
Quantum computing is bunk. Scientists believe in superposition which is a primitive understanding, similar to believing that the earth rides around the sun on a turtle's back. The idea that they've invented qbits which can compute in superposition is a hoax.

Bitcoin is easily traceable but the anonymous part is knowing who owns a particular wallet. If you were to transact with me I would know all your other transactions.

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Re: BitCoin Master Thread
« Reply #1323 on: January 06, 2021, 09:24:49 AM »
I have no clue what you guys are saying. But it sure sounds sophisticated  ;D
#TYH

Offline Yo ssi

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Re: BitCoin Master Thread
« Reply #1324 on: January 06, 2021, 11:10:33 AM »
While I don't necessarily agree with you, it shouldn't matter. Being that currency it's fuelled by the demand, if people are concerned it has potential to fail.
Are you suggesting that our current hashing technology will never be broken or you just don't believe it will be broken by quantum computing?
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Re: BitCoin Master Thread
« Reply #1325 on: January 06, 2021, 01:50:33 PM »
While I don't necessarily agree with you, it shouldn't matter. Being that currency it's fuelled by the demand, if people are concerned it has potential to fail.
Are you suggesting that our current hashing technology will never be broken or you just don't believe it will be broken by quantum computing?

I don't believe that quantum computing really exists. DLink and others are pretending to have created qbits but they're not really photons doing calculations in superposition. It's a giant scam.

Breaking the hashing algorithm or any other encryption is possible if we do get quantum computing, but right now that's just theoretical. From what they say about traditional computing, it's just not possible for silicon chips to ever become fast enough to be effective at decrypting 256 bit encryptions. And if somehow it did become possible, the code makers would easily stay 1 step ahead by increasing encryption to 512 or 1024. It's possible to do stronger encryptions today but we don't bother because it's a waste of time and energy (and because it would make the NSA mad).

And while we're on the subject of developments in the quantum space - there are some very real developments in the quantum encryption space. If it becomes feasible over long distances it will be a completely unbreakable type of encryption. All this to say that we are very likely at the point where code makers are permanently ahead of code breakers.

Offline AsherO

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Re: BitCoin Master Thread
« Reply #1326 on: January 06, 2021, 01:54:56 PM »
I don't believe that quantum computing really exists. DLink and others are pretending to have created qbits but they're not really photons doing calculations in superposition. It's a giant scam.

Breaking the hashing algorithm or any other encryption is possible if we do get quantum computing, but right now that's just theoretical. From what they say about traditional computing, it's just not possible for silicon chips to ever become fast enough to be effective at decrypting 256 bit encryptions. And if somehow it did become possible, the code makers would easily stay 1 step ahead by increasing encryption to 512 or 1024. It's possible to do stronger encryptions today but we don't bother because it's a waste of time and energy (and because it would make the NSA mad).

And while we're on the subject of developments in the quantum space - there are some very real developments in the quantum encryption space. If it becomes feasible over long distances it will be a completely unbreakable type of encryption. All this to say that we are very likely at the point where code makers are permanently ahead of code breakers.

Interesting stuff, I haven’t followed this as close as you and the science is above my pay grade, but I too was under the impression that the quantum computing claims were pseudoscience and not quite what they’re made out to be.
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Re: BitCoin Master Thread
« Reply #1327 on: January 06, 2021, 02:18:10 PM »
Interesting stuff, I haven’t followed this as close as you and the science is above my pay grade, but I too was under the impression that the quantum computing claims were pseudoscience and not quite what they’re made out to be.

It's above my pay grade too but I've been interested in cryptology as a hobby for most of my life, in the form of books and experimenting with different code technologies. So I think that I know more than a little, but obviously far from an expert. I became interested in Bitcoin and other cryptocurrencies as a result of being interested in how they used cryptography (wish that my interest had come with an appetite for risk taking but I didn't have any money in it after 2013 when Mt Gox happened up until 2017).

Happy to also discuss my thoughts about quantum encryption and computing if anyone is interested, but it's just one man's opinion. The ideas of quantum encryption and computing were born around 50 years ago and the origins of the ideas behind superposition were presented in the 1700s, so this stuff is not new from an academic perspective. I only sort of agree with you about calling it pseudoscience - it's real science but what we've figured out so far about it is probably going to be the kind of stuff that future scientists will laugh at our generation for (the way we laugh at the geocentric model and other old scientific beliefs)

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Re: BitCoin Master Thread
« Reply #1328 on: January 06, 2021, 02:20:01 PM »
I don't believe that quantum computing really exists. DLink and others are pretending to have created qbits but they're not really photons doing calculations in superposition. It's a giant scam.

Breaking the hashing algorithm or any other encryption is possible if we do get quantum computing, but right now that's just theoretical. From what they say about traditional computing, it's just not possible for silicon chips to ever become fast enough to be effective at decrypting 256 bit encryptions. And if somehow it did become possible, the code makers would easily stay 1 step ahead by increasing encryption to 512 or 1024. It's possible to do stronger encryptions today but we don't bother because it's a waste of time and energy (and because it would make the NSA mad).

And while we're on the subject of developments in the quantum space - there are some very real developments in the quantum encryption space. If it becomes feasible over long distances it will be a completely unbreakable type of encryption. All this to say that we are very likely at the point where code makers are permanently ahead of code breakers.
I mostly agree, and I'm not majorly worried about it. I'd say it boils down to what the general public is lead to believe.
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Offline Joe4007

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Re: BitCoin Master Thread
« Reply #1329 on: January 06, 2021, 04:04:42 PM »
Gold also has way higher liquidity than BTC, it's also fungible in ways bitcoin isn't. Either way, BTC face value could keep rising until it's 10T, but in reality it's a house of cards that will collapse when the sell rally begins.
https://www.matthuang.com/static/Bitcoin_For_The_Open_Minded_Skeptic.pdf

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Re: BitCoin Master Thread
« Reply #1330 on: January 06, 2021, 06:16:26 PM »
Follow the following thread (i.e. click on the tweet to see subsequent replies) for some interesting questions, opinions and discussion:

https://twitter.com/saxena_puru/status/1346587739785818112
I've been waiting over 5 years with bated breath for someone to say that!
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Re: BitCoin Master Thread
« Reply #1331 on: January 06, 2021, 06:19:15 PM »
I would be extremely cautious in making any predictions with any level of certainty, especially when predicting any type of correlation.

Case in point (not about Bitcoin):

https://twitter.com/nntaleb/status/1346959019907416064
I've been waiting over 5 years with bated breath for someone to say that!
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Re: BitCoin Master Thread
« Reply #1332 on: January 06, 2021, 08:28:27 PM »
Your confirmation bias is showing. Taleb is famous for predicting that the unpredictable happens.

Critics can be right and still be at odds with reality (case in point TSLA). There are very clear answers to the questions in the twitter thread you linked. And there are places in the world where Bitcoin is used as a means of payment - it's as simple as using a credit card for those who learn how.

People are naturally repelled by things they don't understand so the best way to make an informed decision is to get fully educated on it.

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Re: BitCoin Master Thread
« Reply #1333 on: January 06, 2021, 09:07:49 PM »
Your confirmation bias is showing. Taleb is famous for predicting that the unpredictable happens.

My confirmation bias? What is my bias?
I've been waiting over 5 years with bated breath for someone to say that!
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Re: BitCoin Master Thread
« Reply #1334 on: January 06, 2021, 10:24:02 PM »
My confirmation bias? What is my bias?

Apologies if I'm wrong but I have the impression that you've been saying how much everything is overvalued in the stock market, commodities, etc

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Re: BitCoin Master Thread
« Reply #1335 on: January 06, 2021, 10:37:48 PM »
Apologies if I'm wrong but I have the impression that you've been saying how much everything is overvalued in the stock market, commodities, etc

I have been saying that the stock market is overvalued. That is not my bias. That is based on objective metrics. I have also said that the market can remain irrational longer than I can remain solvent if I tried shorting it.

As for commodities, I don't recall expressing any opinion recently. On BTC I can see both sides of the argument though at this point I am slightly tilted to the opinion that it's here to stay, and is therefore headed higher as adoption becomes more widespread, albeit with very high volatility on the way there.
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Re: BitCoin Master Thread
« Reply #1336 on: January 07, 2021, 08:53:56 AM »
Is it worth investing in Bitcoin hoping it will hit 50k?

 Hitting myslef over my head for not putting in at 23k now that it's at 34k.

 I'm thinking now that there's more minors than ever with so many people working at home the stock will keep on soaring throughout this year.

 What's your guys take? Worth putting in a few bucks for a nice return?

What platform do you guys use to buy bitcoin? Any specific site that you would suggest?

 Just the two off hand I had played around with were PayPal and cash app.

 PayPal was more expensive(more fees) and gave you a higher price in the market to buy.
 While cash app was a bit better.
Missed out on this deal?

https://www.instagram.com/p/Bql5FSDnUxW/

 4k return, who listened?  ;)
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Re: BitCoin Master Thread
« Reply #1337 on: January 07, 2021, 09:35:28 AM »
Robinhood = $0.
For new investors, I'm limited at 1,000 to invest in crypto as I need to borrow money from Robin Hood in order to buy whatever I'm looking to buy.
 I have to wait untill the funds from my Accnt comes through.

 While I can invest with Cash app or the like for a minimal fee of $250-$300 and buy whatever I like without limits.
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Re: BitCoin Master Thread
« Reply #1338 on: January 07, 2021, 10:22:30 AM »
For new investors, I'm limited at 1,000 to invest in crypto as I need to borrow money from Robin Hood in order to buy whatever I'm looking to buy.
 I have to wait untill the funds from my Accnt comes through.

 While I can invest with Cash app or the like for a minimal fee of $250-$300 and buy whatever I like without limits.

If you sign up for Robinhood Gold your max goes up (its maybe 10 dollars a month)

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Re: BitCoin Master Thread
« Reply #1339 on: January 07, 2021, 11:15:40 AM »
If you sign up for Robinhood Gold your max goes up (its maybe 10 dollars a month)
Well worth it, vs paying $270 to buy on cash app or elsewhere.

 Just seemed very busy the whole site.

 The Robin Hood app seems very busy lot going on there.
versus cash app which is such a simplistic site very easy to buy and sell.
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