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 347484 times)

Offline Lurker

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Re: BitCoin Master Thread
« Reply #1680 on: May 04, 2021, 08:22:37 AM »
Re Doge, Musk is hosting SNL this week. Personal opinion, see where the price is on Friday and set up stop losses.
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Re: BitCoin Master Thread
« Reply #1681 on: May 04, 2021, 09:10:47 AM »
Will DOGE hit $1 this week?

Offline jackst

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Re: BitCoin Master Thread
« Reply #1682 on: May 04, 2021, 10:08:37 PM »
what's the next new dodge to put into now

Offline chayal101

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Re: BitCoin Master Thread
« Reply #1683 on: May 04, 2021, 10:16:40 PM »
what's the next new dodge to put into now
Ummmmmm Doge? U shldn't dodge doge yet....
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Re: BitCoin Master Thread
« Reply #1684 on: May 04, 2021, 10:29:51 PM »
I don't know it worries me to put more into dodge at this point quite risky as I think it really has no value (because they keep producing new ones there is no cap) it's just a hyp of everybody buying....

Offline Yitzshpitz

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Re: BitCoin Master Thread
« Reply #1685 on: May 05, 2021, 03:24:25 PM »
Have fun, make money but dont be the last one holding a bag of DOGE. XRP was DOGE before DOGE was and it eventually went down 95%...

Re Doge, Musk is hosting SNL this week. Personal opinion, see where the price is on Friday and set up stop losses.

+1  It can crash so fast that you wont have time to sell (or it can happen on Shabbos)

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Re: BitCoin Master Thread
« Reply #1686 on: May 09, 2021, 05:40:50 PM »
what's the next new dodge to put into now

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Re: BitCoin Master Thread
« Reply #1689 on: May 09, 2021, 06:36:06 PM »
& if it crashes??

Finally gives understandable and rational context to verbiage like "crash" and "to the moon."
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Re: BitCoin Master Thread
« Reply #1691 on: May 12, 2021, 09:21:34 PM »
Chaya L.

Offline Mikeoracle

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Re: BitCoin Master Thread
« Reply #1692 on: May 12, 2021, 09:25:42 PM »
& dogecoin or ethereum are environmental friendly mining??


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Re: BitCoin Master Thread
« Reply #1693 on: May 12, 2021, 11:10:29 PM »
No. Dogecoin and BTC are identical. The only reason bitcoin uses more energy now is because it is relatively more popular. If dogecoin usurped bitcoin's popularity it would consume just as much energy.

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Re: BitCoin Master Thread
« Reply #1694 on: May 12, 2021, 11:53:40 PM »
No. Dogecoin and BTC are identical. The only reason bitcoin uses more energy now is because it is relatively more popular. If dogecoin usurped bitcoin's popularity it would consume just as much energy.
Then why would Elon musk/tesla  pull out of bitcoin & promote dogecoin if it's technically the same like you say?
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Re: BitCoin Master Thread
« Reply #1695 on: May 13, 2021, 12:14:48 AM »
Then why would Elon musk/tesla  pull out of bitcoin & promote dogecoin if it's technically the same like you say?

The same reason he's not getting rid of the BTC he has. He also didn't say anything about not buying more. It has nothing to do with energy consumption.
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Re: BitCoin Master Thread
« Reply #1696 on: May 13, 2021, 12:39:21 AM »
The same reason he's not getting rid of the BTC he has. He also didn't say anything about not buying more. It has nothing to do with energy consumption.
Whatever, I'm not going to try & makes sense of this cuz honestly speaking crypto makes ZERO sense. It's just a balloon of hype that can pop at any given moment.
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Re: BitCoin Master Thread
« Reply #1697 on: May 13, 2021, 12:53:29 AM »
No. Dogecoin and BTC are identical. The only reason bitcoin uses more energy now is because it is relatively more popular. If dogecoin usurped bitcoin's popularity it would consume just as much energy.

True somewhat, though while doge is a clone of Bitcoin, it was cloned 7 years ago and the development has changed over time. Also doge implemented merge mining, where it can be mined simultaneously with LTC making that aspect way more efficient as well. And while it may have the same underlying tech, it’s not nearly as inefficient as BTC, the devs may make changes to keep it that way.
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Offline yuneeq

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Re: BitCoin Master Thread
« Reply #1698 on: May 13, 2021, 01:41:54 AM »
Whatever, I'm not going to try & makes sense of this cuz honestly speaking crypto makes ZERO sense. It's just a balloon of hype that can pop at any given moment.

You’re not really saying much. Of course there’s a lot of hype in crypto and it may drop in price, but don’t think that crypto will ever go away. I was originally a big fan of Bitcoin, but eventually realizing that it lost all its utility except as a store of value, aka digital gold. The thought was that Bitcoin couldn’t succeed as a store of value if it didn’t have any other utility. Well, 12 years and 3 gigantic crashes later, we’re at $50k and it has less utility than ever. It has caught on with everyone - from crypto investors, to retail traders, and even institutional investors. Its popularity as a finite store of value is here to stay, and that became its real utility. So while it may lose significant value, don’t think that it will ever go to zero.

Other cryptos provide more utility than Bitcoin but don’t have the brand name, some will go bust, some of the bigger ones will likely last as well, such as ETH.
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Re: BitCoin Master Thread
« Reply #1699 on: May 13, 2021, 03:02:50 AM »
You’re not really saying much. Of course there’s a lot of hype in crypto and it may drop in price, but don’t think that crypto will ever go away. I was originally a big fan of Bitcoin, but eventually realizing that it lost all its utility except as a store of value, aka digital gold. The thought was that Bitcoin couldn’t succeed as a store of value if it didn’t have any other utility. Well, 12 years and 3 gigantic crashes later, we’re at $50k and it has less utility than ever. It has caught on with everyone - from crypto investors, to retail traders, and even institutional investors. Its popularity as a finite store of value is here to stay, and that became its real utility. So while it may lose significant value, don’t think that it will ever go to zero.

Other cryptos provide more utility than Bitcoin but don’t have the brand name, some will go bust, some of the bigger ones will likely last as well, such as ETH.
To rely on a digital currency that is so vulnerable- I can't see how that can do any good in the world. To me, it makes no sense, I probably need to learn more about it to understand the concept better.
Chaya L.