(Topic ID: 200502)

Somebody explain Bitcoin to me


By Pinballlew

2 years ago



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    There are 1720 posts in this topic. You are on page 4 of 35.
    #151 2 years ago
    Quoted from CaptainNeo:

    who is making the things bitcoin goes into? Do the programmers have bitcoin to insert into these equations? They have a stockpile of them? Why would you even take the time to insert these "prizes" into things for others to find? What's stopping them from just duplicating unlimited supply of said coins?

    This is what I don't get either, the algorithms being solved must have value to someone otherwise why would it have value. Is mining helping entities, maybe government or perhaps hackers or someone else generate value by 'outsourcing the computation' of something. As there's real money behind a Bitcoin generating it must be worth something to someone? Is playing with bitcoins just being a part of something else?

    #152 2 years ago
    Quoted from ExtremePinball:

    Start from post #1. Read all of the posts completely. All of your questions will be answered.

    I did, and I don't understand who creates the coins and how they are giving them value.

    It seems like it would be creating a crossword puzzle that people can solve, and when they solve it I give them a code for a fraction to a piece of stock. But I would have to have the stock to give in the first place.

    #153 2 years ago
    Quoted from CaptainNeo:

    I did, and I don't understand who creates the coins and how they are giving them value.
    It seems like it would be creating a crossword puzzle that people can solve, and when they solve it I give them a code for a fraction to a piece of stock. But I would have to have the stock to give in the first place.

    there are 21 million bitcoins and there will never be any more than that. approximately 16.7 million of those 21 million have been mined already. the remainder are still undiscovered.

    like gold, there is a finite supply. new bitcoins cannot be created without re-writing the bitcoin protocol, which due to its distributed nature, would in effect require a majority consensus of all bitcoin holders, which obviously would never happen, since you'd be asking people to voluntarily devalue their own assets.

    #154 2 years ago

    Which bubble will burst first? Pinball or Bitcoin?

    #155 2 years ago
    Quoted from pezpunk:

    there are 21 million bitcoins and there will never be any more than that. approximately 16.7 million of those 21 million have been mined already. the remainder are still undiscovered.
    like gold, there is a finite supply. new bitcoins cannot be created without re-writing the bitcoin protocol, which due to its distributed nature, would in effect require a majority consensus of all bitcoin holders, which obviously would never happen, since you'd be asking people to voluntarily devalue their own assets.

    So someone made a bunch of puzzles and created a bunch of millions of secrets hidden inside those. What made those pieces of code worth anything?

    -2
    #156 2 years ago
    Quoted from CaptainNeo:

    So someone made a bunch of puzzles and created a bunch of millions of secrets hidden inside those. What made those pieces of code worth anything?

    it's no more edible than gold or diamonds or dollars.

    #158 2 years ago

    I guess I just don't understand how someone goes from making this code and hiding what's basically xbox gold inside of it. THen have that xbox gold all of a sudden have some value to companies?

    #159 2 years ago
    Quoted from CaptainNeo:

    I guess I just don't understand how someone goes from making this code and hiding what's basically xbox gold inside of it. THen have that xbox gold all of a sudden have some value to companies?

    yeah i get that. all i can offer is that the only difference between bitcoin and traditional currencies in that regard is the number of people who agree it has value.

    in my opinion, there are two main advantages bitcoin has over, say, the U.S. dollar:
    - actual, enforced scarcity: unlike dollars, no person/government/bank can simply print a bunch of new ones when they want. there are 21 million and that's all there'll ever be.
    - the blockchain: a permanent, unalterable, distributed public ledger of every bitcoin transaction. it's a currency that comes with a practically infallible accounting / trust / clearinghouse / verification system built in. it eliminates the need for trusted third parties, intermediaries, or central authorities to approve transactions.

    #160 2 years ago
    Quoted from pezpunk:

    yeah i get that. all i can offer is that the only difference between bitcoin and traditional currencies in that regard is the number of people who agree it has value.
    in my opinion, there are two main advantages bitcoin has over, say, the U.S. dollar:
    - actual, enforced scarcity: unlike dollars, no person/government/bank can simply print a bunch of new ones when they want. there are 21 million and that's all there'll ever be.
    - the blockchain: a permanent, unalterable, distributed public ledger of every bitcoin transaction. it's a currency that comes with a practically infallible accounting / trust / clearinghouse / verification system built in. it eliminates the need for trusted third parties, intermediaries, or central authorities to approve transactions.

    You pretty much just described gold too. And it has been used since the dawn of civilization....and will continue to be used until the end.

    #161 2 years ago
    Quoted from CaptainNeo:

    So someone made a bunch of puzzles and created a bunch of millions of secrets hidden inside those. What made those pieces of code worth anything?

    Mass delusion.

    And when people start pointing out that the emperor has no clothes, it will snowball into most everyone pointing and laughing at the naked man.

    This is basically what happened with the tulip bulb trade. Some genius looked at his bulb, and thought "did I really just pay $5000 for a flower seed?"

    #162 2 years ago
    Quoted from CaptainNeo:

    So someone made a bunch of puzzles and created a bunch of millions of secrets hidden inside those. What made those pieces of code worth anything?

    Think of it as one puzzle of code that was created and released into the wild of the internet. The purpose of the code is to validate the transactions of the network. The more computational effort is applied to validating, the more resilient is the network against attacks. There's no secrets: it's public key cryptography and digital signatures...basic ideas that can be taught in freshman university mathematics or computer science class. The code is designed to dispense bitcoin currency as rewards among the miners to incentivize behavior that is beneficial to the network, and only becomes worth anything when people accept bitcoins in exchange for other valuable things.

    #163 2 years ago
    Quoted from CaptainNeo:

    who is making the things bitcoin goes into? Do the programmers have bitcoin to insert into these equations? They have a stockpile of them? Why would you even take the time to insert these "prizes" into things for others to find? What's stopping them from just duplicating unlimited supply of said coins?

    It's part of the Bitcoin protocol. Keep in mind that the goal of all this is to provide the valid hash first. When you do that, the protocol allows that miner to insert a transaction into the block that generates the new Bitcoin.

    Think of it this way. I can write whatever transaction I want into the blockchain, but for it to mean anything, it has to be verified. If all the other miners reject my transaction, it is never officially written into the blockchain.

    So the protocol allows whoever solved the equation first to create the new transaction that adds 50BTC to their wallet.

    It isn't like there is a big pile of bitcoin somewhere that gets handed out by someone when you solve the equation. The bitcoin you get hasn't even been created yet. You create it when you solve the equation and then it's validated by everyone else on the network.

    I think it's called a Generation Transaction, but I'm not 100% sure.

    #164 2 years ago
    Quoted from CaptainNeo:

    I did, and I don't understand who creates the coins and how they are giving them value.

    A "coin" is no more than a digital "address", a 160-bit number that represents a value of bitcoins. If you lose that number you lose your bitcoins, period. The only known hacks so far are people stealing bitcoin addresses; in the case of Mt.Gox, from the inside.

    There is a very good tutorial on BitCoin at Khan Academy, web search for "khan academy bitcoin". There are 5 parts but it's not that long.

    #165 2 years ago
    Quoted from TheHueManatee:

    You pretty much just described gold too. And it has been used since the dawn of civilization....and will continue to be used until the end.

    Agreed. But what's your point? There are many alternative forms of value. Gold, Silver, Platinum, Bitcoin, Real Estate...etc...

    #166 2 years ago
    Quoted from vicjw66:

    Mass delusion.
    And when people start pointing out that the emperor has no clothes, it will snowball into most everyone pointing and laughing at the naked man.
    This is basically what happened with the tulip bulb trade. Some genius looked at his bulb, and thought "did I really just pay $5000 for a flower seed?"

    Bitcoin has no relation to your precious "tulip bulb" analogy. Other than it might be a bubble. In that sense it would be more analogous to the famous "dot com" bubble.

    This (current valuation) might also just be the tip of the iceberg. If bitcoin actually catches on as an alternative form of currency then 6k per coin is just the beginning.

    If it doesn't then it's value could drop to zero. Or, it could even be supplanted by another form of cryptocurrency.

    #167 2 years ago
    Quoted from Astropin:

    Just as an F.Y.I. you can also own cryptocurrencies (and other assets like property / gold etc...) in a personally directed IRA account or through brokers which manage a personally directed IRA account for you. If, you want to direct retirement funds into these types of investments.

    Interesting. I didn't know that was possible.

    I've been throwing a little money every few weeks at OTB stocks related to cryptocurrencies. I figure if Bitcoin continues to skyrocket, one of the damn things has to catch on at some point. I picked up a chunk of MGTI awhile back that's doubled in the last month or so. I dumped half my investment and was able to cover the initial purchase.

    I'm thinking of grabbing some shares of SING. They are working on cryptocurrency payment solutions for the marijuana industry. Weed and Cryptocurrency.....what can possibly go wrong?

    #168 2 years ago
    Quoted from pezpunk:

    i can't believe i have to explain this to you a third time. bitcoin cannot be hacked. if you store your digital currency in an encrypted wallet, it is 100% safe unless you personally mess up and give your credentials away.

    This line of thinking is wrong. Just because the encryption used is believed to be secure, that does not make it unhackable. Just like this week's disclosure on wpa2... even when the encryption itself was not broken, flaws in the protocol were found. Flaws in bitcoin have been found in the past as well. Flaws in AES, RNGs, etc... all been exposed before.

    We talk about Stength in encryption - not as things as 'unhackable'.

    Quoted from pezpunk:

    an exchange is a store like any other. you don't keep your money in a store.

    But a safe at home holding worthless tokens is still worthless. Impenetrable wallets do not safeguard the currency. Major failures in how the currency is valued or traded would cripple your tokens even if they never left your wallet. Because all value is about a shared expectation- destroy that and value is hurt.

    #169 2 years ago
    Quoted from Astropin:

    Agreed. But what's your point? There are many alternative forms of value. Gold, Silver, Platinum, Bitcoin, Real Estate...etc...

    I'm just saying it's a sound investment (in my mind) that is reliable and versatile. Thats what I look for when investing for the long haul. It will always have value.....always. It also has too many uses besides currency exchange. And you physically own it outright.....no middle man. (No govt)

    Thats all I'm saying....

    ....but...

    ....with all that said. I'm kind of curious now after all this discussion. I'm now pondering just investing a small sum and giving it a 5 year life span in my portfolio to see how it does.

    Or should I just get some new decals for my SF2? Lol

    #170 2 years ago

    Like all Pump & Dump schemes, glowing excitement and encouragement from current "investors" helps their position. (You buy more and tell your friends, demand goes up, now their coins are worth more!)

    You'll only hear about the miracles and potential of "cryptocurrencies" and "blockchains", and they won't talk about the inadequacies of the backing network (transaction backlog, high transaction fees).

    If it costs $40 in transaction fees to pay for your lunch and you don't have a reliable estimate on when your transaction will be confirmed, I have high doubts about people using Bitcoin over cash/debit/credit.

    When a stock price rises, there's usually a reason for the rise (i.e. news about increase in expected revenue/profits/dividends). Do the savvy "investors" who are telling you to buy Bitcoin, know the reason for it's recent rise?

    Unconfirmed Blockchain Transactions
    https://blockchain.info/unconfirmed-transactions

    Bitcoin Transaction Fees: $40 to send 0.01 Bitcoin
    http://mashable.com/2017/08/28/bitcoin-transaction-fees/#4k2gSpl1Akq9

    #171 2 years ago

    For a supposed "distributed technology" the vast majority of "physical" mining (aka transaction verification) takes place on hardware sitting behind China's Great Firewall, where burning coal produces some of the cheapest electricity in the World.

    Maybe that's inconsequential, but you don't hear much talk about it?

    https://news.bitcoin.com/china-block-all-bitcoin-transactions/

    #172 2 years ago
    Quoted from Astropin:

    Bitcoin has no relation to your precious "tulip bulb" analogy. Other than it might be a bubble. In that sense it would be more analogous to the famous "dot com" bubble.

    Why are you fighting the tulip analogy here? Don't you like flowers?

    Tulips, dotcom market, 2000's housing bubble, bitcoin, and dozens of other examples are similar in one regard - the extraordinary price growth is greatly, if not completely, driven by speculation and investment, not from the underlying commerce generated.

    What about bitcoin has generated the $105,000,000,000 in virtual value? The belief, hope, speculation that it will survive as a currency, and people don't want to miss out on it.

    If it is truly worth that and is sustainable, then it is unique in all of history as the biggest, fastest economic engine ever invented.

    #173 2 years ago
    Quoted from guyincognito:

    Like all Pump & Dump schemes, glowing excitement and encouragement from current "investors" helps their position. (You buy more and tell your friends, demand goes up, now their coins are worth more!)
    You'll only hear about the miracles and potential of "cryptocurrencies" and "blockchains", and they won't talk about the inadequacies of the backing network (transaction backlog, high transaction fees).
    If it costs $40 in transaction fees to pay for your lunch and you don't have a reliable estimate on when your transaction will be confirmed, I have high doubts about people using Bitcoin over cash/debit/credit.
    When a stock price rises, there's usually a reason for the rise (i.e. news about increase in expected revenue/profits/dividends). Do the savvy "investors" who are telling you to buy Bitcoin, know the reason for it's recent rise?
    Unconfirmed Blockchain Transactions
    https://blockchain.info/unconfirmed-transactions
    Bitcoin Transaction Fees: $40 to send 0.01 Bitcoin
    http://mashable.com/2017/08/28/bitcoin-transaction-fees/#4k2gSpl1Akq9

    I sent $330 worth of Bitcoin last week and the transaction fee was $1.44, or 0.44%. Credit card fees are upwards of 3 - 3.5%. Sounds cheap to me.

    Of course there are unconfirmed transactions. Have you read anything in this thread? It takes time for the transactions to be processed the the entire network and until they are processed and validated, they are unconfirmed. It's a known limitation and is being worked on.

    The price is rising because people obviously see value in bitcoin as it becomes more recognized, easier to obtain and more widely accepted. Isn't the old saying "buy the rumor, sell the fact". Well, the rumor is that it's going to really catch on as a global payment alternative / solution. The fact is no one knows what the hell is going to happen.

    #174 2 years ago

    It's all speculative today.

    If it's a currency of the future... then it will be available in the future. there is no reason to own it today except to speculate on its appreciation.

    The system really can not move from where it is today to a global currency... so it will change, multiple times.

    There will always be people speculating on future shortages, and the digital media world we live in now only fuels their ability to promote and liquidate when needed. Everything is speculated now... even Lego sets.

    The only protection is educated buyers and self control. Unfortunately that is a tall order...

    #175 2 years ago
    Quoted from Spyderturbo007:

    I sent $330 worth of Bitcoin last week and the transaction fee was $1.44, or 0.44%. Credit card fees are upwards of 3 - 3.5%. Sounds cheap to me.

    How long did it take to confirm the transaction?

    Quoted from Spyderturbo007:

    The price is rising because people obviously see value in bitcoin as it becomes more recognized, easier to obtain and more widely accepted. Isn't the old saying "buy the rumor, sell the fact". Well, the rumor is that it's going to really catch on as a global payment alternative / solution. The fact is no one knows what the hell is going to happen.

    Why does it have to be Bitcoin? Could it be Ethereum, a faster and arguably more scalable implementation of a "block chain" (distributed ledger)? Could it be Monero, which is arguably a more "anonymous" and private cryptocoin? Or how about the many other hundreds of cryptocoins that have been created since Bitcoin?

    #176 2 years ago

    I like speculating.

    #177 2 years ago
    Quoted from guyincognito:

    You'll only hear about the miracles and potential of "cryptocurrencies" and "blockchains", and they won't talk about the inadequacies of the backing network (transaction backlog, high transaction fees).
    If it costs $40 in transaction fees to pay for your lunch and you don't have a reliable estimate on when your transaction will be confirmed, I have high doubts about people using Bitcoin over cash/debit/credit.

    Actually, these *are* the things I talk about when I discuss Bitcoin with people that are curious. My biggest cryptocurrency investment is in Bitcoin at the moment, but I don't believe that Bitcoin itself will be the de facto cryptocurrency of the future, at least not in its current form, for the two reasons you mentioned, as well as the mining hashrate centralization in China and energy expenditure issues which you mentioned in your next post.

    There are efforts to correct these problems though. Whether they are on the right or wrong track is another matter. First of all are the upcoming Bitcoin forks: Bitcoin Gold in a couple weeks that aims to fix the mining centralization problem by using an ASIC-resistant crypto algorithm, and Segwit2x in November which is supposed to alleviate the transaction speeds by making the blocks twice as big. There's also the upcoming Lightning Network that will attempt to address Bitcoin's scalability and fee problems by allowing off-chain transactions through some sort of smart contract system. I don't know the specifics of this system yet, but from what I understand, we're not going to see this go live for quite a while, so we'll likely see our transaction fees and backlog grow significantly before those problems are addressed.

    I'm of the opinion that Bitcoin as a first-generation blockchain technology is probably not going to be able to scale the way the world needs even with the various bandaid solutions that are created for it. I think newer concepts are going to be necessary for cryptocurrency to replace physical currency. For example, there's a cryptocurrency called IOTA that I think has this potential. Instead of a linear blockchain like Bitcoin or Ethereum, its ledger system is what is known as a directed acyclic graph that they call the Tangle. In the Tangle, to process a transaction, you must first verify two previous transactions already in the system. Since you are performing the transaction processing yourself, there are no miners and no fees, and because of this arrangement, scalability is not an issue. In fact, as more transactions are processed on the network, the faster the network becomes. IOTA is designed with the intention of acting as a secure yet trustless communications channel for machine-to-machine interactions (aka, Internet of Things), but if the system is proven viable (still in its pre-alpha stages and not truly decentralized yet), I see no reason why it couldn't take off as a currency system as well.

    Bitcoin may not be the future but I think cryptocurrency definitely will be.

    #178 2 years ago
    Quoted from XXVII:

    Actually, these *are* the things I talk about when I discuss Bitcoin with people that are curious.

    Thanks for your post and good for you. You seem cautiously excited about the future of the technology. Mostly what I hear about when Bitcoin is brought up is "don't be left out on our trip to the moon!" and it reminds me of junk bonds, dotcom stocks, and the real estate get-rich-quick schemes. Oh and Beanie Babies.

    #179 2 years ago
    Quoted from flynnibus:

    If it's a currency of the future... then it will be available in the future. there is no reason to own it today except to speculate on its appreciation.

    I remember reading a very similar quotes when some companies went public. If it's the company of the future.... blah, blah, blah.

    "There's no reason to own Tesla today at $15.00 when you can wait a few years and buy it for $352.00.

    "There's no reason to own gold today, except to speculate on its appreciation."
    "There's no reason to own Alibaba stock today, except to speculate on its appreciation."
    "There's no reason to own land today, except to speculate on its appreciation".

    Almost ANY investment fits this sentence. It's all speculation, and it all comes with risk. Albeit some riskier than others.

    Wait here while I check on the investment money I sent to Bernie Madoff for my Enron shares.

    #180 2 years ago
    Quoted from guyincognito:

    How long did it take to confirm the transaction?

    Why does it have to be Bitcoin? Could it be Ethereum, a faster and arguably more scalable implementation of a "block chain" (distributed ledger)? Could it be Monero, which is arguably a more "anonymous" and private cryptocoin? Or how about the many other hundreds of cryptocoins that have been created since Bitcoin?

    It doesn't have to be Bitcoin. That just happens to be the topic of this thread. It could be Ethereum, Litecoin, or any other crypto. When I was able to trade on Bitfinex, I was buying about a dozen different cryptos. Since they have abandoned the U.S. market, I'm down to Bit, Ether, & Lite on the Gdax platform. But I actively day/swing trade these.

    #181 2 years ago
    Quoted from guyincognito:

    Thanks for your post and good for you. You seem cautiously excited about the future of the technology. Mostly what I hear about when Bitcoin is brought up is "don't be left out on our trip to the moon!" and it reminds me of junk bonds, dotcom stocks, and the real estate get-rich-quick schemes. Oh and Beanie Babies.

    And with all of your examples, there was a time to get in, and a time to get out. I'm willing to risk a few G's for that trip to the moon, although I can always decide to reduce my risk at anytime during the trip.

    Nobody complains of a bubble when they buy the bottom & sell the top. And even fewer of us complain when we sell the top, and then buy the bottom.

    #182 2 years ago
    Quoted from guyincognito:

    Thanks for your post and good for you. You seem cautiously excited about the future of the technology. Mostly what I hear about when Bitcoin is brought up is "don't be left out on our trip to the moon!" and it reminds me of junk bonds, dotcom stocks, and the real estate get-rich-quick schemes. Oh and Beanie Babies.

    Sure. When people ask me if I think they should invest in Bitcoin, I tell them no, at least to not invest any money that they couldn't afford to lose completely. If Bitcoin's market cap eventually matches that of gold, I think I read that 1 BTC will be worth about $500,000, but if Bitcoin isn't redesigned to be capable of even scaling to the speed needs of a single city's daily transaction requirements, if the fees and energy expenditure can't be reduced, if the mining centralization (control and power over the Bitcoin network) isn't fixed, I think Bitcoin will only go back down in value. Maybe never $0 again, but a lot closer to it than it is now.

    Even setting these issues aside, there are more problems to consider. State-of-the-art quantum computers are currently allegedly around the 50-qubit range, but with the billions of dollars now being dumped into quantum research, how long before they are in the thousands or millions range? Maybe Shor's algorithm makes SHA256 obsolete and a post-quantum crypto fork is necessary to keep Bitcoin secure. But maybe the computational costs are too great with this new algorithm to let the blockchain be viable. I'm expecting within the next 12 months for a cryptocurrency crackdown to happen in the US, which should dramatically alter the market, at least in the short term. Maybe Bitcoin will be banned. I think many Ethereum-based tokens will be for violating SEC rules.

    #183 2 years ago
    Quoted from ExtremePinball:

    And with all of your examples, there was a time to get in, and a time to get out. I'm willing to risk a few G's for that trip to the moon, although I can always decide to reduce my risk at anytime during the trip.
    Nobody complains of a bubble when they buy the bottom & sell the top. And even fewer of us complain when we sell the top, and then buy the bottom.

    Well at least you're aware of the game you're playing and you're not someone looking to invest their retirement in something that has "a 1000% return every year indefinitely..."

    Of course when those people start buying, is when you really make your money!

    Right now you're just playing with the whales and their bots as they place spoofed/washed bids to manipulate the market. None of this really has anything to do with the fundamentals of Bitcoin, Blockchains or cryptocurrencies. It's just human greed in a largely unregulated market.

    #184 2 years ago
    Quoted from guyincognito:

    someone looking to invest their retirement in something that has "a 1000% return every year indefinitely..."

    I "hope" no one is doing that...although I'm sure there are some...always are. I've invested in Blockchain/Cryptocurrencies with eyes wide open. It wasn't a tiny sum but nothing that will affect my long term retirement plans if lost completely. Basically a "maximize my gains while containing my losses" approach. I also invested in gold at the same time as a hedge.

    #185 2 years ago
    Quoted from guyincognito:

    Thanks for your post and good for you. You seem cautiously excited about the future of the technology. Mostly what I hear about when Bitcoin is brought up is "don't be left out on our trip to the moon!" and it reminds me of junk bonds, dotcom stocks, and the real estate get-rich-quick schemes. Oh and Beanie Babies.

    All of those things you could have made a lot of money on...my sister in law made a fortune on beanie babies.

    #186 2 years ago
    Quoted from ExtremePinball:

    It doesn't have to be Bitcoin. That just happens to be the topic of this thread. It could be Ethereum, Litecoin, or any other crypto. When I was able to trade on Bitfinex, I was buying about a dozen different cryptos. Since they have abandoned the U.S. market, I'm down to Bit, Ether, & Lite on the Gdax platform. But I actively day/swing trade these.

    What are the fees when day trading these?

    #187 2 years ago
    Quoted from Pinballlew:

    What are the fees when day trading these?

    If you're a market maker, there aren't any fees. I can't tell you off the top of my head what they are if you're a taker.

    #188 2 years ago
    Quoted from Pinballlew:

    All of those things you could have made a lot of money on...my sister in law made a fortune on beanie babies.

    I've got a hookup on a few rummage sales that are selling them 4 for $1 if your sister is still interested?

    #189 2 years ago
    Quoted from ExtremePinball:

    I remember reading a very similar quotes when some companies went public. If it's the company of the future.... blah, blah, blah.
    "There's no reason to own Tesla today at $15.00 when you can wait a few years and buy it for $352.00.

    Those two things are nothing alike. One is an asset... one is a currency.

    If bitcoin is looked at as a currency.... and in the future I need to buy $1 worth of milk... there will be $1 worth of bitcoin available for me to buy that milk. If not, bitcoin is not viable for currency at that time.

    I do not need to buy bitcoin now to buy that milk in the future. I would only buy it now because I am trying to speculate on the future valuation of bitcoin.

    The arguments over "value" is because people confuse this with an actual commodity. People buy and sell commodities because they are actually needed. The market invests in commodity futures and inventories because they aim to speculate on the future prices of those commodities. At the end of the day, there is a market for the actual thing, and an investment market around the price of that "thing".

    Bitcoin has a limited supply, like a commodity might, but there is no actual market for bitcoin itself. All we have is the potential market for moving/exchanging it, and an investment market around the future prices of it.

    It is not like the future price of a stock. It's more like buying and selling seats at a table to buy/sell things that don't exist. It's a market of stock brokers who actually have no physical companies issuing stock. But you are buying and selling the access to this market... of nothing.

    It's pure speculation - and not a long haul one. For time is actually against it. The more time that goes by, the more risks of alternatives, flaws, etc that can devalue its future.

    There is zero reason to buy bitcoin except as a speculator. The days of viable investment to just mine are long gone. The money is in getting over people to buy in... or pay you to move or organize it... or speculating on future prices. All of those things rely on people promoting the value and interest in the token. That's why people make references to Ponzi schemes, etc... because the only value to be made is by getting others to participate more.

    If it was a pure currency with backing... one might argue you are shifting your today dollars into another form to protect it by moving into another form that has a better future. But we aren't facing a collapse of the US government backing of the dollar... or the number of governments that would rush in to stop that from happening.

    People don't buy gold because they think the usd is going to collapse... they buy gold to speculate on its appreciation vs the usd.

    Currency traders are just retrying to make money on fluctuations. None of it is about commodities or assets for the future.

    #190 2 years ago
    Quoted from guyincognito:

    How long did it take to confirm the transaction?

    To be honest, I have no clue. I sent it to my Trezor wallet and didn't watch the confirmations.

    Quoted from guyincognito:

    Why does it have to be Bitcoin? Could it be Ethereum, a faster and arguably more scalable implementation of a "block chain" (distributed ledger)? Could it be Monero, which is arguably a more "anonymous" and private cryptocoin? Or how about the many other hundreds of cryptocoins that have been created since Bitcoin?

    It doesn't, but the OP asked about Bitcoin. I own Bitcoin, Ether, Bitcoin Cash and have been really considering buying a chunk of Ripple (especially with the recent pull back) . A buddy of mine just dropped 10 large on Ripple. I hope he hits it out of the park.

    Anyway, any of them, all of them, or none of them could go crazy. Just like any other investment, I'm taking the available information and assigning a risk factor within my comfort zone. I'm not going to cash out my 401K or sell my Blue Chip stocks to buy crypto, but I've been throwing money at it to see what happens.

    #191 2 years ago
    Quoted from flynnibus:

    Just because the encryption used is believed to be secure, that does not make it unhackable. Just like this week's disclosure on wpa2... even when the encryption itself was not broken, flaws in the protocol were found. Flaws in bitcoin have been found in the past as well. Flaws in AES, RNGs, etc... all been exposed before.
    We talk about Stength in encryption - not as things as 'unhackable'.

    sure, i understand that. as with physical security, in digital security, the only way to make something 100% secure is to do without it. but we are not talking about bitcoin in a void. we are talking about it in relation to physical currency, and the security risks associated with that.

    Quoted from flynnibus:

    But a safe at home holding worthless tokens is still worthless. Impenetrable wallets do not safeguard the currency. Major failures in how the currency is valued or traded would cripple your tokens even if they never left your wallet. Because all value is about a shared expectation- destroy that and value is hurt.

    true. security itself is not enough to guarantee the coin itself will retain value. there are lots of other factors at work and nobody knows the future. my point about the wallets was just to point out that you don't keep all your money at Wal-Mart, you keep it somewhere relatively safe, and you bring it to the store when you're ready to buy something. i was trying to clarify wallets versus exchanges, because people were talking about exchanges getting hacked.

    #192 2 years ago
    Quoted from guyincognito:

    I've got a hookup on a few rummage sales that are selling them 4 for $1 if your sister is still interested?

    Oh no she is way out now...my point is she made a fortune and knew when to cash out and walk away...this was years ago.

    Same can be said for a lot of investments. The point is you can make a lot when it's hot and know when to get out. Don't get caught with the hot potatoe.

    #193 2 years ago
    Quoted from guyincognito:

    Well at least you're aware of the game you're playing and you're not someone looking to invest their retirement in something that has "a 1000% return every year indefinitely..."

    Yes, exactly! For a few grand, this IS a game to me. But it's not for everybody. Absolutely DO NOT invest any money you are not comfortable losing. I'm self employed in the family entertainment business. My entire life involves risk.

    I risk, on average, over $10,000 on each new arcade game I buy. I've bought 36 new arcade games YTD, with a couple more months left. Some games I can ROI in just a few months. Others haven't ROI'd after 4 years of operation. Risk.

    I'm currently working on a 10,000sf expansion of my arcade. Should set me back over $1 million to complete the project. Is this more, or less, risky than dropping $15k into Bitcoin, Ethereum & Litecoin?

    Quoted from Pinballlew:

    What are the fees when day trading these?

    Too minimal for me to care, or keep track of.

    Quoted from flynnibus:

    People buy and sell commodities because they are actually needed.

    Explain the "need" for art. You can't. And even if you tried, art has no intrinsic value aside from the cost of paint & canvas. So the overwhelming value in art, is in the agreement of it's value between at least two parties. If one of those parties decides it has no value, guess what, there is no market, and it has no value. Just because the seller is asking $10,000,000 means nothing.

    Quoted from flynnibus:

    I do not need to buy bitcoin now to buy that milk in the future. I would only buy it now because I am trying to speculate on the future valuation of bitcoin.

    Sure. "I do not need to buy "FILL IN THE BLANK" now to buy that milk in the future. I would only buy it now because I am trying to speculate on the future valuation of "FILL IN THE BLANK".

    Clear enough for you?

    Quoted from flynnibus:

    It's pure speculation - and not a long haul one. For time is actually against it. The more time that goes by, the more risks of alternatives, flaws, etc that can devalue its future.

    On this, I completely agree. Like all investments, have an exit strategy.

    Quoted from flynnibus:

    There is zero reason to buy bitcoin except as a spectator.

    I trust you meant speculator. So again: There is zero reason to buy "FILL IN THE BLANK" except as a speculator.

    #194 2 years ago

    A real world example in speculation and calculated risk:

    In my last career, I was a self-taught, self-employed numismatist specializing in rare die varieties of Morgan & Peace silver dollars.

    So I'm at a coin show and I was reviewing auction lots that day when I came across an 1878 Morgan that I attributed as an obscenely rare VAM 123. Not only was the variety rare, but it was certified by NGC as MS64 DMPL. The only other known example of the variety was an AU53 (almost uncirculated), and was firmly placed in a collection.

    At that time, a typical 1878 Morgan Silver Dollar graded NGC MS64DMPL traded at about $275. I, and I alone, estimated the value of this coin at $10,000-$15,000. I stood to make a tremendous amount of money…. If I was right. If I was wrong, I lost nothing because I would have paid $275 for a $275 coin…. Or so I thought.

    The auction begins. When the bidding on the coin exceeded $500, I confirmed my fear that at least ONE other numismatist also attributed this coin as a VAM 123 variety. As it turns out, it was just one other person.

    This is where I entered the pure "SPECULATION" aspect of this purchase. Remember, I was the only person on the planet who estimated that I could sell this coin, wait for it..... in the future, at $10-$15,000. I could have been completely delusional as there was no precedent. And without at least one other person in the world agreeing to MY value of this variety, its real world value remains at $275.

    The bidding on this $275 coin gets to about $6,500 when the other bidder bows out. With the juice, I owned this normally $275 coin, at $7,500. Fuck!!!!

    As expected, my attribution of the variety was completely correct. A couple of weeks later, I won my house in an auction. Then in an effort to quickly gather capital for the purchase, I immediately sold the coin to my best client for $10,000 without even shopping it around.

    #195 2 years ago

    Any speculators have an explanation for why Bitcoin is trading on the markets at nearly 10x what it was just a year ago after sitting stagnant for almost 2 years?

    #196 2 years ago
    Quoted from pezpunk:

    i was trying to clarify wallets versus exchanges, because people were talking about exchanges getting hacked.

    The exhanges being hacked are probably not the biggest worry. From what I have gleaned on the subject, it's actually the wallets and such storage methods that are more often hacked to steal cryptocurrency. Brute force hacking is especially easy when the owners set weak passwords, ransomware is common and even cell phone data theft - but even more sophisticated methods are being implemented by hackers as well. This also gives rise to one of the cons of cryptocurrency: You can reverse a credit card transaction - but you can't with crypto, similar to cash. Once it's stolen, you basically would have to find the thief and execute your own brand of personal justice.

    #197 2 years ago
    Quoted from guyincognito:

    Any speculators have an explanation for why Bitcoin is trading on the markets at nearly 10x what it was just a year ago after sitting stagnant for almost 2 years?

    fox news and other mainstream media giving it exposure.

    #198 2 years ago
    Quoted from wayout440:

    The exhanges being hacked are probably not the biggest worry. From what I have gleaned on the subject, it's actually the wallets and such storage methods that are more often hacked to steal cryptocurrency. Brute force hacking is especially easy when the owners set weak passwords, ransomware is common and even cell phone data theft - but even more sophisticated methods are being implemented by hackers as well. This also gives rise to one of the cons of cryptocurrency: You can reverse a credit card transaction - but you can't with crypto, similar to cash. Once it's stolen, you basically would have to find the thief and execute your own brand of personal justice.

    Hard to do if your using the "cold storage" method. If you're not...well you take your chances I guess. Your own personal coins will be as safe as you make them.

    #199 2 years ago
    Quoted from guyincognito:

    Any speculators have an explanation for why Bitcoin is trading on the markets at nearly 10x what it was just a year ago after sitting stagnant for almost 2 years?

    Sure:
    #1 Speculation of future value.
    #2 Greater understanding of what blockchain technology is and what cryptocurrencies are.
    #3 Greater acceptance of Bitcoin worldwide as an actual form of payment.
    #4 "Hedge investing" to offset other "traditional forms of investment"

    #200 2 years ago
    Quoted from ExtremePinball:

    Too minimal for me to care, or keep track of.

    And when do you conduct your "How to day trade crypto" classes?

    I really want to give it a shot, but I've been being a wus.

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