Bitcoin -What do you know?

[imoldernu]

Like them or not, buy them or not, Bitcoin is with us for a while, so it might be well to understand some of the whats. whys, hows and what if's.

This might be an opportunity to share with others what you know or what you've heard about the phenomenom.

I listened to a National Public Radio program that discussed the electricity cost of bitmining that was an eyeopener to me... As I recall, one year of mining bitcoins costs more than the total energy output/consumption of 139 countries for the same period.

So... for starters, this seven minute audio is just on the cost of energy, and the time required to "mine" bitcoins.

https://www.loe.org/shows/segments.html?programID=18-P13-00034&segmentID=4

Please add anything that might be helpful in understanding bitcoin. Some of the tech sites were so obscure i didn't get past the first few paragraphs. any simplification would be helpful. "Knowing, even if not using is usually helpful in the long run..." (quote from my aunt Grace)

 

[pb4uski]

All I know is that I am not in the least interested until they are a proven thing and more mainstream.

 

[Teacher Terry]

My son and husband mined for the past 4 years. About 4 months ago they turned off the machines because there wasn’t enough profit. My son mines other coins as well and sells and buys coins depending on value. During this time minus expenses we have cashed out 40k and them 150k. We have 7 coins left and will probably sell when they go up to 20k/coin. My son spends a lot of time keeping up on the coins , etc and really knows what he is doing.

 

[flintnational]

I am still holding my investment in tulip bulbs left to me by my Dutch ancestors. As soon as they sell, I am all in on bitcoin.


PS The DW thinks we should just plant the bulbs.

 

[aja8888]

Beanie Babies are set to make a comeback followed by olympic pins. I'm hoarding cash for the right moment.

 

[FUEGO]

Y'all aren't even focusing on the right things here. 2 words. Beanie Babies.

Edit: I went and ate a hamburger and then commented without seeing aja8888's response. Well played

 

[jazz4cash]

I am more interested in adoption of block chain technology in other areas besides crypto currency.

 

[sengsational]

One bit of trivia that I find fascinating was that the original idea was supposed to thwart the bad guys, and it turned out to be an enabler for the bad guys.

"Proof of Work" is the concept that you give someone a hard to solve "thing" and you can know for sure, very quickly, whether the thing they presented is "the answer". If it IS the answer, they have proven they've done work.

We all hate spam, so the idea came about: "Why don't make email senders prove they've done work". This way, a spammer can't send out millions of emails that all have proof of work. Unfortunately, it never got traction from companies with legit reasons to send email. I guess they didn't mind having their message have equal weight with pleas from Nigerian princes.

Then, the bad guys, that clever lot, used that same technology in order to get paid in a way that's untraceable. So now they encrypt the photos of your grand kids and make you pay in bitcoin to see that little smiling face again, lol!

 

[HI Bill]

I've read a few articles. Digital currencies are not fiat currencies (backed by any government), and are not commodity-based (like silver or gold). They hold no intrinsic value. So, what value to they hold? They are speculative, and are worth exactly one value: their current trading value. My understanding is that Bitcoin has capped the number of coins that can be mined, so this way of making money with that coin is essentially over. Their acceptance rate as a real currency is low, and slow, and if you ever lose the device holding the coins, you've lost the coins.

If you enjoy gambling, go for it! I'm sure I'll get some interesting feedback on my thoughts, and will correct any mis-statements I've made.

 

[Teacher Terry]

I don’t know why I even bother to reapply to this topic because everyone just wants to make fun of Bitcoin. Ugh!

 

[yakers]

I am more interested in adoption of block chain technology in other areas besides crypto currency.

This


The impact of block chain will be substantial

 

[donheff]

I am not interested in Bitcoin as an investment but it relies on blockchain technology which I am interested in. I read a few books and took an online college course on blockchain just to get a vague grip on it's potential. It is essentially an open, distributed ledger that can record and verify transactions (e.g. bitcoin transactions) between two or more parties. The transactions are recorded in "blocks" and once the distributed system accepts a block as legitimate it is sealed with a cryptographic hash and cannot be changed. Future blocks build on the previous blocks. The concept is getting a lot of attention and Federal agencies, financial institutions, and others are experimenting with blockchain technologies. There are other similar approaches that are competing with blockchain for mind-share. For example, the IOTA crypto-currency runs on a peer-to-peer open network called the "tangle' that also relies on cryptography but in a different, possibly more scalable approach. IOTA and it's tangle are trying to position themselves to serve as the micro-payment foundation of the Internet-of-things.

If you have heard of Gartner's Hype Cycle. this stuff is currently sliding down the slope from the hype peak toward the trough of disillusion after which it may climb back into broad use. There may be opportunities to get in on the ground floor in some startups that will cash in big on these technologies but guessing which will succeed is a huge crap-shoot for the likes of us.

 

[jazz4cash]

CNBC has a Bitcoin documentary airing today at 6PM Eastern.

 

[joeea]

Please add anything that might be helpful in understanding bitcoin.

Yada, yada, speculation on technology most of the bettors don't understand at all, yada, yada, unregulated haven for laundering money, yada, yada, do you feel lucky?

 

[mrfeh]

There is so much info available online, I think google is a much better option than asking a few people on an ER board.

 

[JoeWras]

Wow. Seems to be a common theme lately to complain about threads on ER.

One of the charms of ER is the open discussion on threads, even when they go off kilter. As someone on another thread said in a response to "Your answer needs to be actionable", they said, "We're just talkin'."

As far as OP's question... I agree with other posters saying to watch blockchain. Read up on it a bit.

One of my co-w*rkers recently quit to work for a blockchain startup.

 

[Texas Proud]

I don’t know why I even bother to reapply to this topic because everyone just wants to make fun of Bitcoin. Ugh!

If everyone is making fun of Bitcoin then is it a viable option?


I still think it is a fad... at least for people here in the US... someone today on TV said it might not be in other countries like Venezuela etc... they do have a point there..


Why a fad IMO? Because it is touted as a currency... but a currency to be valuable to a holder it has to be stable... bitcoin is very far from stable... down like 60% or so from its high... I would hate to think of my dollars going down that much...


SO, that means it is an investment... but as an investment it also fails IMO... it produces nothing... it can be used to produce nothing... the only value it has is what someone else is willing to pay you for it... at least with gold you have something in hand that can be used for productive purposes... and even if the above were not the case I still think it is too volatile to invest...

 

[corn18]

Apparently 1% of the people who own bitcoins control 99% of the value of all bitcoins. Not something I want to participate in.

 

[imoldernu]

OP thought:

Despite some serious searching, no true "beginners guide to bitcoin:.
The closest marginally understandable website so far is on Forbes.

Caveat... this can be a serious read, but in order to understand the basic article, and to go from one part to another, I feel it's almost a necessity to click on and read the links within the explanations. Not a simple thing to do, as some of the links are longer than the article itself.

Recommendation: If you decide to go ahead, consider using a more sophisticated free ad blocker such as Mercury Reader. (Guaranteed you be glad you did. Use it for all websites.) It not only blocks the ads, but restructures the entire page for easy reading.

Obviously bitcoin is more substantial that most realize. With a finite "CAP", there is some concern as to what this can do to the economy, all apart from what seems to be a risky investment. At this point, my concern is what effect this might have on the National economy... if not today, then within the next several years.

I hope I'm wrong, and just another crazy person running around predicting the end of the world. In the meantime, am hoping to understand a little bit more than it just being yada yada yada.

FWIW, here's a link to the Forbes article...

https://www.forbes.com/sites/bernardmarr/2018/01/17/a-complete-beginners-guide-to-bitcoin-in-2018/#7dea4cea4418
note... it dates back to January, so I expect there are updates.

 

[sengsational]

The purpose of a currency is so we don't have to trade sheep for ore (to use a settlers of catan reference).

I wouldn't be the least bit concerned about the demise of any currency causing much of a ripple in the world economy, except for maybe USD. Even then, the next "strongest" currency would step in, not by any coordinated plan, just because market forces would make that the natural result.

The usual problem with all these fiat currencies (government issued and block chain currencies) is getting a stable base of people and organizations to believe in them and use them. They all depend upon the masses believing that they are now and will be worth something in the future.

 

[gayl]

Apparently 1% of the people who own bitcoins control 99% of the value of all bitcoins. Not something I want to participate in.

Kinda like the top 1% in other currencies?

 

[kgtest]

I have a buddy who built a mine in his house. Spent a $hit ton of money building like 20 computers or something. I see him recently on FB cursing bit coin, but when he was starting his endevour, all of my critique fell on deaf ears... mainly the idea of massive amounts of electrical consumption.



What happens when that static operation in Poorville USA raises their electricity rates of the highest tiered users...oh wait, that's already a thing.


Feds prob aren't happy, now they need to sort out the high electricity users of bitcoin from the high electricity users of grow ops. lol.

 

[EvrClrx311]

Quantum Computing (QC) will end bitcoin sometime in the next 1-15 years. There are plenty of articles claiming they have a fix coming for this to harden BitCoin to quantum computing, but the fact is the underlying architecture of BitCoin was constructed on 2010ish technology, the fixes won't work, or last... it was designed to scale to size, but not so much to speed of computing. And speed in computing will turn exponential when QC arrives. All keys, private/public, encryption today, will be naked to these new devices that can crack brute force mechanisms in fractions of a second due to the new way machine will handle data. As one person put it in simple terms: "Quantum computers are able to run Shor’s algorithm, a quantum algorithm that can find the 2 primes of a semiprime in quadratic time. Since this would break the private/public key encryption, it would be possible to reverse someone's private key from their address. This would destroy bitcoin in its current state."

To use an analogy... Sure the Apollos program was incredibly advanced for it's day, cutting edge technology... paving the way of the future. The fundamental processing power of the entire program, can today be dwarfed by that little device in your pocket.

When quantum computers come of age (it may already be here in the govt spaces, just not in the public yet)... it'll be as significant as taking someone from 1968, and plopping a cell phone in front of them (it'll be a 50 year step in technology that happens over night)... the whole fabric of BitCoin will be undone. The block chains will instantly become obsolete, along with everyone's wallet. When that times comes, every lost bitcoin will appear in the first wallet of the person who unleashes QC onto the market. Which creates an incredible incentive for someone (or some government) to get to this first, and secretly suck the value out of BitCoin just before it crashes. Lots of sales will happen just before the bottom falls out. People may never know why... it'll be a rush to the exit.

Another way of putting this... you know how you encrypt files, for safety? Then some of us send those up to the cloud, or e-mail them to ourselves, or our family. That's awesome, great, grand... and typical encryption mechanisms today will protect it such as AES-128, 192 or 256... they'll protect it for a time.

So ten years ago we used MD5... you may have heard of this. You don't use it anymore, because computers got fast enough that it became obsolete. Ten years prior to that we used something else, that MD5 took over for. Ten years from now the same will happen to AES and we'll have something new. Point being, anything you send in the open that someone else can grab onto... you can be sure for now it's secure... but if someone kept a copy of it for 10+ years... they'll be able to crack it in the future.

This is the fundamental problem with BitCoin... even if people decide it's good, and it grows in popularity... eventually it'll be obsolete and replaced with something else that is stronger... BitCoin will try to adapt, but it's current design, and peoples trust in it, and the way it requires a level of agreement between people in order to fork changes, will ensure it doesn't change fast enough to keep up with technology. Anyone who tries to convince you it'll grow with technology... is akin to someone trying to tell you the wiring and construct of the Apollo probe is of some computational relevance today. No, it'd be thrown out, because there are much cheaper, easier and better alternatives that are smaller than your fingernail

 

[DatumPoint5]

Vox has a good "explanation video" of the block chain using the CryptoKitties that came out in May of 2018.
cryptokitties-blockchain-explainer

It explains the block chain which can be applied to just about anything that you wish to make "unique" and "one of a kind".

 

[imoldernu]

The purpose of a currency is so we don't have to trade sheep for ore (to use a settlers of catan reference).

I wouldn't be the least bit concerned about the demise of any currency causing much of a ripple in the world economy, except for maybe USD. Even then, the next "strongest" currency would step in, not by any coordinated plan, just because market forces would make that the natural result.

The usual problem with all these fiat currencies (government issued and block chain currencies) is getting a stable base of people and organizations to believe in them and use them. They all depend upon the masses believing that they are now and will be worth something in the future.

This is getting closer.. my simple understanding is that a crypto currency is basically an idea/plan/program/ for accomplishing a feat. In most cases, for purposes of this discussion, as if a bitcoin was an advanced program for making money in the stock market, by some kind of advanced technical knowledge that the bitcoin developer has created.
So... in this scenario (not dealing with financial value of stocks)instead of a bitcoin associated with Money per se... an idea that could have future monetary value.

Maybe a creative analysis similar to Firecalc, which takes in to considerations many factors,and historical event. If it was just being created today, it could have future value... ie. maybe it would be sold and promoted to become a money making service, such as Quicken.

Next step... establish a Firecalc bitcoin. Offer it in the cryptocurrency market. One bitcoin. Investors see a value, and bitmine it to become a shareable value among investors. Just like a simple auction, the Firecalc bitcoin is now up for grabs to the highest bidder, who then owns it until other bidders increase the price of the share, increasing the value.

For anyone who may be following this thread... my current over simplified understanding. YMMV... or YMWDV (your mileage will definitely vary)

In any case... some random comments/headlines from the internet:
Bitcoin headed to one trillion dollars. (one thousand Billion)
Potential for a 90% loss to investors.
The next Bitcoin Rush is brewing
Japanese firm stops bitmining
Bitcoin high could be five years away