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 347424 times)

Offline myi

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Re: BitCoin Master Thread
« Reply #1360 on: January 11, 2021, 02:42:42 PM »
Is now a good time to jump in?
I would not... Wait it out a bit. It's so unstable now.
   
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Offline Yo ssi

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Re: BitCoin Master Thread
« Reply #1361 on: January 11, 2021, 02:45:55 PM »
I would not... Wait it out a bit. It's so unstable now.
 
Why do you think waiting will help?
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Re: BitCoin Master Thread
« Reply #1362 on: January 11, 2021, 02:52:51 PM »
I would not... Wait it out a bit. It's so unstable now.
 

This is where one might potentially have a use for stable coins  ;D

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Re: BitCoin Master Thread
« Reply #1363 on: January 11, 2021, 03:48:28 PM »
Is now a good time to jump in?
I'm waiting if it'll go down more. Meanwhile I did buy a little bit (less than 20% of $, of what I'm ready to put in).

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Re: BitCoin Master Thread
« Reply #1366 on: January 13, 2021, 01:26:24 AM »
He needs to hire @TimT to find it for him.
Lol, I'm sure they'll be glad to have him help put and even offer one or two bitcoins in return.

 That's insane to loose such money like that.
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Re: BitCoin Master Thread
« Reply #1367 on: January 13, 2021, 08:12:25 AM »
How hard would it be to change the 10 tries & lost forever setting ?

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Re: BitCoin Master Thread
« Reply #1368 on: January 13, 2021, 01:05:05 PM »
How hard would it be to change the 10 tries & lost forever setting ?

I have an IronKey from work and there doesn't seem to be a setting that disables the self-destruct security. Even if it's possible, it's not going to be an option while you're locked out of the drive.

Every time BTC spikes we get another story like this. Last time it was the guy who threw away his old hard drive and was sifting through the city dump for his $100M+. I'm too cynical but a lot of this is just attention seeking people making up a story about a large account that hasn't had transactions.

Offline AsherO

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Re: BitCoin Master Thread
« Reply #1369 on: January 13, 2021, 02:32:36 PM »
I have an IronKey from work and there doesn't seem to be a setting that disables the self-destruct security. Even if it's possible, it's not going to be an option while you're locked out of the drive.

For $220m the guy can afford to buy the company that makes these things.
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Re: BitCoin Master Thread
« Reply #1370 on: January 13, 2021, 02:40:56 PM »
For $220m the guy can afford to buy the company that makes these things.

Except that he doesn't have the password to access the $220MM
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Re: BitCoin Master Thread
« Reply #1371 on: January 13, 2021, 03:00:11 PM »
Except that he doesn't have the password to access the $220MM
He’s wealthy enough

Offline yos9694

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Re: BitCoin Master Thread
« Reply #1372 on: January 13, 2021, 06:54:40 PM »
Egg and the chicken or something like that. If it was true.

Also not sure that IronKey can help because if they have built in backdoors pretty sure the military would be upset.

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Re: BitCoin Master Thread
« Reply #1373 on: January 14, 2021, 11:08:42 AM »
Egg and the chicken or something like that. If it was true.

Also not sure that IronKey can help because if they have built in backdoors pretty sure the military would be upset.

Who said back doors. With complete access to and full knowledge of how it works, it’s easier to find flaws you can exploit to work around the 10 password limit.
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Re: BitCoin Master Thread
« Reply #1374 on: January 14, 2021, 11:12:36 AM »
Except that he doesn't have the password to access the $220MM
He can offer them 25% of wallet on contingency.

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Re: BitCoin Master Thread
« Reply #1375 on: January 14, 2021, 01:25:43 PM »
He can offer them 25% of wallet on contingency.

Which kind of points to the story being fiction

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״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר – יוסיף אהבה לתורה.״ - אורחות צדיקים

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Re: BitCoin Master Thread
« Reply #1377 on: January 15, 2021, 10:35:57 AM »
https://twitter.com/dimartinobooth/status/1349960367884161025?s=21

From the actual article:

Quote
It’s understandable that alternative assets would come into vogue in the current macro environment, where central banks, and the U.S. Federal Reserve in particular, have probed the outer limits of monetary policy and expanded their balance sheets more so than at any other time, including in the aftermath of the Global Financial Crisis.

And with trust in the U.S. government deteriorating at the same time that gobs of stimulus are being released into the economy, investors are wise to be looking for a store of value as a hedge against uncertainty, currency depreciation and inflation risks (though we don’t see meaningful inflation emerging any time soon).

But in our estimation, these are arguments for holding a diversified portfolio that includes hard assets such as gold, things that will keep their value in the face of these ongoing risks. But bitcoin is not guaranteed to hold value.

So he's definitely right that Bitcoin is based on "faith of its holders that it is worth more than nothing and that the technology is sound", and all fiat currencies are equally based on the faith of its holder that the backer/issuer of said currency is sound (which publicly available evidence indicates otherwise).
I've been waiting over 5 years with bated breath for someone to say that!
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Re: BitCoin Master Thread
« Reply #1378 on: January 15, 2021, 11:18:02 AM »
From the actual article:

So he's definitely right that Bitcoin is based on "faith of its holders that it is worth more than nothing and that the technology is sound", and all fiat currencies are equally based on the faith of its holder that the backer/issuer of said currency is sound (which publicly available evidence indicates otherwise).

The difference is that stakes are much higher for a US government collapse than for an implosion of BTC.
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Re: BitCoin Master Thread
« Reply #1379 on: January 15, 2021, 12:33:30 PM »
https://twitter.com/dimartinobooth/status/1349960367884161025?s=21
Comes down to this quote from the article:
Quote
Comparisons to gold in this regard are baseless. No one ever talks about the risk that gold could go to zero because it simply can’t — there is a floor in its price, because it has physical properties that make it useful even outside of its primary function as a safe-haven asset.
Although, I don't think for most people investing in Gold, it going to $10 (or whatever amount of value you want to ascribe to its physical properties (strictly physical properties. value as Jewelry can be argued is only there since Gold has been considered an asset)) isn't going to help them much more than BTC going to zero.