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 347475 times)

Offline ExGingi

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Re: BitCoin Master Thread
« Reply #1560 on: February 25, 2021, 12:58:36 AM »
https://twitter.com/documentingbtc/status/1364608716444737540

@henche do you have any potato futures from back then?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

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Re: BitCoin Master Thread
« Reply #1561 on: February 25, 2021, 02:48:20 AM »
I have some coins on Binance I left there since a couple years ago. I heard about all sorts of changes to Binance but haven't been following. If I want to sell do I need to transfer my coins off of Binance or go through some special verification?
use a vpn to login and liquidate or transfer. No verification needed.

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Re: BitCoin Master Thread
« Reply #1562 on: March 01, 2021, 01:23:14 PM »
You can file for free on Credit Karma.

Doesn't work because I have to pay SE taxes on my parsonage, and they don't support the necessary forms.

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Re: BitCoin Master Thread
« Reply #1563 on: March 01, 2021, 09:20:07 PM »
I have some coins on Binance I left there since a couple years ago. I heard about all sorts of changes to Binance but haven't been following. If I want to sell do I need to transfer my coins off of Binance or go through some special verification?
why not transfer them elsewhere? I dont think it will let you sell, and wouldnt risk selling there without ability to transfer out the USD.

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Re: BitCoin Master Thread
« Reply #1564 on: March 01, 2021, 09:22:27 PM »
I have some coins on Binance I left there since a couple years ago. I heard about all sorts of changes to Binance but haven't been following. If I want to sell do I need to transfer my coins off of Binance or go through some special verification?
use a vpn to login and transfer.
wouldnt risk selling there without ability to transfer out the USD.
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Re: BitCoin Master Thread
« Reply #1565 on: March 01, 2021, 10:16:04 PM »
A few people mentioned cardano here so I thought I'd share. Coinbase is about to go public and I fully expect them to launch a coinbase token (like other successful exchanges have done) before that happens. As of today cardano blockchain allows for token creation and it's very compelling to speculate that coinbase would use it to issue their token.

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Re: BitCoin Master Thread
« Reply #1566 on: March 02, 2021, 02:41:24 AM »
Elon Musk invests in the Dogecoin What do you think about this?

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Re: BitCoin Master Thread
« Reply #1567 on: March 02, 2021, 12:17:18 PM »
Elon Musk invests in the Dogecoin What do you think about this?

Elon Musk is a troll

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Re: BitCoin Master Thread
« Reply #1568 on: March 02, 2021, 02:53:05 PM »
A few people mentioned cardano here so I thought I'd share. Coinbase is about to go public and I fully expect them to launch a coinbase token (like other successful exchanges have done) before that happens. As of today cardano blockchain allows for token creation and it's very compelling to speculate that coinbase would use it to issue their token.

Interesting point about Cardano which has been one if the best performing coins for the past year. I've wondered why they have not created their own coin yet. Perhaps, they are not able to have their own coin if they go public (pure speculation). I wonder if after going public they will reduce their fees which are higher than both Binance U.S and FTX U.S or use their own coin to offset some fees for their coin owners. I would also like to see them use their incoming capital to improve their app, site and trade functionality when volume picks up. No more excuses.

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Re: BitCoin Master Thread
« Reply #1569 on: March 02, 2021, 02:55:17 PM »
Does anyone have any experience with Kraken? Binance US is giving me verification issues, and a little research tells me that's their MO these days.
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Re: BitCoin Master Thread
« Reply #1570 on: March 02, 2021, 02:59:08 PM »
A few people mentioned cardano here so I thought I'd share. Coinbase is about to go public and I fully expect them to launch a coinbase token (like other successful exchanges have done) before that happens. As of today cardano blockchain allows for token creation and it's very compelling to speculate that coinbase would use it to issue their token.

Interesting counter-analysis: https://cryptobriefing.com/will-coinbase-introduce-its-own-exchange-token/
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Re: BitCoin Master Thread
« Reply #1571 on: March 02, 2021, 03:13:31 PM »
Does anyone have any experience with Kraken? Binance US is giving me verification issues, and a little research tells me that's their MO these days.

I'm curious, what issues did they give you? Isn't a license and bank statement or Utility bill good enough?

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Re: BitCoin Master Thread
« Reply #1572 on: March 02, 2021, 03:28:56 PM »
I'm curious, what issues did they give you? Isn't a license and bank statement or Utility bill good enough?

It seems they need a picture of me though their app, and that keeps glitching out. Also, they are taking over a month to verify accounts these days, which doesn't accommodate what I'd like to do.
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Re: BitCoin Master Thread
« Reply #1573 on: March 02, 2021, 03:56:15 PM »
CARES Act mortgage deferments end soon. Gonna be a different world when the bills start coming in.
I would be very careful making any predictions.
100%. This is just my personal experience, as well as what I'm hearing from others in the same boat. Those looming mortgage payments are a game changer for a lot of people.
Never under estimate the ability to kick the can further down the road.

Interesting to see how this gets dealt with: https://www.foxnews.com/lifestyle/10-families-risk-eviction-foreclosures-pandemic
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Re: BitCoin Master Thread
« Reply #1575 on: March 02, 2021, 05:38:14 PM »
Interesting counter-analysis: https://cryptobriefing.com/will-coinbase-introduce-its-own-exchange-token/

I don't think it's much of a counter argument though. It's true that Coinbase helped make USDC but that's not a profit vehicle and doesn't really offer any advantages to people with access to USD. A Coinbase exchange token, on the other hand, would be a means to generate capital through selling/generating coins when adoption/price is high, and would create a loyalty program to help hold onto customers. As @Yitzshpitz mentioned, their fees are higher (at least 5x higher in fact) than Binance and other leading Asian exchanges, and while Coinbase is a great gateway exchange I'm sure as their users become more sophisticated they start to migrate away.

I'm envisioning that they would straight up copy Binance, KuCoin, et al and offer 50% discount of trading fees for using their native coin. Customer loyalty is a great way to keep profits steady and shareholders happy

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Re: BitCoin Master Thread
« Reply #1576 on: March 02, 2021, 05:50:23 PM »
...
I'm envisioning that they would straight up copy Binance, KuCoin, et al and offer 50% discount of trading fees for using their native coin. Customer loyalty is a great way to keep profits steady and shareholders happy

Have you read their S1? I tried glancing through it to see where they discuss a potential native coin, but my eyes started swimming.
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Re: BitCoin Master Thread
« Reply #1577 on: March 02, 2021, 06:23:22 PM »
I haven't.  The whole idea is pure speculation with no supporting evidence. But I've wondered why cardano was never listed by Coinbase despite its popularity. Its runup over the past month (in excess of the general hysteria) is likely connected with the fork but we're still missing an explanation as to why the fork makes the coin so much more valuable.

IIRC, the run-up to every fork of every coin has created a spike in price.
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Re: BitCoin Master Thread
« Reply #1578 on: March 02, 2021, 06:49:53 PM »
IIRC, the run-up to every fork of every coin has created a spike in price.

Wish I could respond with specific examples but can't do it off the top of my head and dont have time to pull up charts. But its definitely untrue that anticipating a fork alway leads to a runup. Not all forks are good, especially not hard ones where the community can be split into 2.

I think best example in your favor was btc/bch because both coins had ample communities and your tokens were doubled. But the opposite was true with eth/eclassic because the latter branch was literally to preserve stolen assets for the thieves. Also, not every fork results in multiple coins, many are just software protocol changes and have nothing to do with value

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Re: BitCoin Master Thread
« Reply #1579 on: March 02, 2021, 06:54:41 PM »
Wish I could respond with specific examples but can't do it off the top of my head and dont have time to pull up charts. But its definitely untrue that anticipating a fork alway leads to a runup. Not all forks are good, especially not hard ones where the community can be split into 2.

I think best example in your favor was btc/bch because both coins had ample communities and your tokens were doubled. But the opposite was true with eth/eclassic because the latter branch was literally to preserve stolen assets for the thieves. Also, not every fork results in multiple coins, many are just software protocol changes and have nothing to do with value

I'm far from an expert on the tech. My comment was more that, to my memory, the word "fork" has always caused prices to go up, justified or not. A large percentage of the players in crypto have no idea what's flying.
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