(Topic ID: 200502)

Somebody explain Bitcoin to me

By Pinballlew

2 years ago

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    #85 2 years ago
    Quoted from TRAMD:

    I don't understand the mining and some other aspects of Bitcoin and don't know the answers to the questions I posted. I do understand some things about investing, that Bitcoin has no intrinsic value and that if this type of digital currency can be created once, it can be done again, and again, and again. My "diatribe" related to those topics. I can tell if someone is a good teacher of something without being an expert myself because I learn easily from them. I can tell if they are a bad teacher because they can't explain it on a more basic level that I can understand. I consider myself to be intelligent (though doesn't everyone?) but I am no genius when it comes to computer programming.
    Maybe what I am most skeptical about is the defense/lauding of Bitcoin by people invested in it. If it is so great, be quiet, keep buying more, and let us fools that don't understand lose out on that fantastic investment.

    Thank you for what you did post. I would be interested in the longer response if you happened to save it. I will check out that link too.

    The problem is people talking past each other. Using similar words, but focusing on different contexts.

    Bitcoin itself has no intrinsic value - Correct, like most forms of currency, it's only value is as a token of an agreed upon trade value with another party.
    The "value" in it is only as a form of exchange between two parties. The existence of Monetary exchanges where people are willing to buy and sell bitcoin with other forms of currency is establish a market value in a metric comparable to Government issued money we are used to. The "value" is set by what you can get by exchanging the bitcoin with someone else. Just like Gold has no value to me as an individual consumer, but someone is willing to trade me government backed paper money in exchange for it. Government backed paper I can then use to trade with other people.

    What value do the equations actually solve in mining? The math is self-serving to Bitcoin. The math being computed is math related to Bitcoin's transaction system. Unlike a SETI or other distributed compute systems... it is not a system that has people 'mine' to solve problems for the rest of the world. The compute isn't being applied to some other problem solution, it's being applied to the block system behind Bitcoin's integrity. The "value" of the compute work is that it's actually a decentralized way to validate and strengthen the Bitcoin eco-system. People are rewarded to contribute to the compute power needed to validate the transactions themselves.

    Bitcoin has integrity that is validated and strengthened by math and peer sharing rather than regulated record keeping by governments and "tamper proof" physical tokens.

    Like all token currencies, it's only value is because of an assumed worth in exchange. A government currency is backed by an entity willing to trade a value for that token. A digital currency like bitcoin is not backed by anyone - it's monetary value is established by what the peers set it to be through their willingness to trade for it.

    In that sense, the idea that pumping Bitcoin is a self-serving process, because driving demand for it, drives up the value of the token you may already be holding (Diamonds anyone???). And yes, another system could spring up and compete with it... the same way bitcoin just 'appeared' without any value backing it. But it's the attributes that make Bitcoin secure and independent... that make it desirable to use as a form of exchange. It's not completely arbitrary - it's just not backed by an exchange that one might considered 'guaranteed' to exist.. like a strong government entity.

    #87 2 years ago
    Quoted from BrianBannon:

    I don't pretend to understand cryptocurrencies, or all the explanations offered here. My question or caution would be this, normally when something is wanted or needed there is a long line of people clamoring for it. In the case of these cryptocurrencies, I see this long line on the supply side of the equation with people offering a solution in the form of cryptocurrencies, but where are all the people on the other side? I think if we see a like demand for this type of currency, say acceptance by mainstream retailers, it will be here to stay, otherwise it looks like simple speculation to me.

    The demand is largely in the markets that wish to stay out of the way of government monitoring and intervention. They have tried to mainstream some of this, but reality is the STRENGTH of these systems all comes back to the truth of its something you can use, and trust, without having to trust or reveal yourself to the government.

    Mainstream retailers won't clamor for it unless it becomes a means to move or collect money cheaper.

    Alternate forms of payment will grow demand by offering tools the prior method did not - but these do not displace the CURRENCY itself - just how it is moved.

    #110 2 years ago
    Quoted from VacFink:

    It won't, because its lack of transparency is at its core and why then its primary, not sole purpose, is for nefarious uses.

    Two flaws in your thinking
    1 - It has complete transparency - every transaction is visible. What it doesn't require is tying a government known entity to a wallet and has anonymity - Very different from lacking transparency (that would be those closed door Fed sessions...)
    2 - The idea that you want something AWAY from the government doesn't just mean 'nefarious' use - it can mean you wanted a system away from the baboons in government. Governments manipulate currency as part of their economic programs - designing a trade system AWAY from the government means you remove their ability to manipulate it.

    #127 2 years ago
    Quoted from pezpunk:

    i suggest you learn about why it is unhackable. it uses a distributed accounting system that requires consensus from 10,000 distinct nodes across the globe. you'd have to orchestrate more than half of those nodes to conspire and cooperate with your attack without anyone noticing in order to be successful. It's not going to happen.
    now of course an individual can always be scammed -- but that's a universal truth that has nothing to do with cryptocurrency.

    Scenarios like Mt Gox tho can still happen... even without compromising the larger network. That's still an issue ... but one could argue the same risks exist in electronic funds handling at banks. Difference is banks are insured.

    #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.

    #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...

    #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.

    #210 2 years ago
    Quoted from pezpunk:

    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.

    Then I think we agree that the statement "unhackable" or "100% safe" isn't your best choice of words Especially in relation to physical currency. You can't take the physical currency out of my wallet. Electronic trading of that currency of course is riskier.. but if you are focusing on the digital wallet, its still inferior to physical assets in regard to remote risks. Of course, it adds extra access controls compared to other electronic formats... but as soon as we are talking about using bitcoin for convience transactions... all those layers of security will eventually be weakened in favor of access/speed. Like putting a wallet app on a smartphone, etc.

    Quoted from pezpunk:

    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.

    Yes, but unlike government backed currency, at least there is no regulation and backing in those exchanges. And much of the "value" of your coins is being determined by these non-regulated, unsecured agents. It's free market to the extreme... which isn't always good. While all the theory on the integrity of the bitcoin itself is all fine... people aren't actually buying/selling that. They are trading based on a market worth... a worth being established relative to other assets... by pseudo trusted entities. This is a benefit, but also a great risk. And given the entire model revolves around making money by moving almost imaginary things... the deck is stacked in favor of people ultimately trying to squeeze and maximize their personal gain.

    The math behind mining and tracking transactions itself do not set a market value relative to other currencies. This is the side of the equation that relies on 3rd parties.. which are not incorruptible.

    #211 2 years ago
    Quoted from ExtremePinball:

    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

    Art isn't a commodity in the context I was using. I was using commodities in the market context of Trading Commodities, Currencies, or Stocks.. since you brought up the analogy to buying a stock. Commodities as typically seen as Metals, Energy, and Agriculture.

    Quoted from ExtremePinball:

    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?

    Clear enough that you have zero interest in these things beyond something you wish to appreciate in value - zero interest in it as a crypto currency or anything else. Might as well be beanie-babies.

    Quoted from ExtremePinball:

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

    Yes, a typo - thank you. There are reasons to buy things besides speculation. This thread has been talking about "value" many times. But its clear your position and interest is purely one of a investment/speculation... and nothing about actually using it as a currency or its place in changing commerce.

    #214 2 years ago
    Quoted from Astropin:

    You say it has no value beyond pure speculation. I disagree. I has value as an alternative asset class. It has value due to the pure transparency of the public ledger upon which it's built. It has value by being completely decentralized from any government. It has value in the relatively quick transaction times and lower fees VS traditional banking or credit card transactions.
    And lastly it has a base value today of at least $1000 per coin since that is roughly the current cost in just electricity to mine one (which will continue to go up).

    What it cost you really has nothing to do with establishing value... just sets an expectation of what someone would expect as the minimum to recover. Value is set by BOTH parties, not one.

    You are confusing the term. It may have value as a TOOL/Technology.. that does not equate to value in terms of a intrinsic value as a tradable commodity.

    If it costs me $10 to make a pretty piece of paper... that doesn't mean it has a market value of at least $10 or some inherent value at all. Just that it had a cost to produce.

    #264 2 years ago
    Quoted from Spyderturbo007:

    I do like the one bullet point you left out from your link.
    Bitcoin's electricity consumption as a percentage of the world's electricity consumption = 0.10%
    Might want to jump on a different “this is bad for the planet” campaign.

    I LOL'd!!

    You're trying to argue that .1% of the GLOBAL energy consumption being spent on a SINGLE THING that all it does is validate itself... is trivial??

    Convert energy into something you think matters... That's like saying if you killed 7.6 MILLION people (0.1% of the world) it would be insigificant to look at.

    Anything that even registers at the GLOBAL level is not trivially small.

    #277 2 years ago
    Quoted from ExtremePinball:

    That's quite a diatribe there. I hope you didn't "invest" too much time into it.
    It's a shame that you failed to note the following, which is directly in your own quoted source.
    "Energy consumption model and key assumptions
    Even though the total network hashrate can easily be calculated, it is impossible to tell what this means in terms of energy consumption as there is no central register with all active machines (and their exact power consumption). "
    Now, I might be an idiot, and I'm certainly no genius, but when calculating the "IMPOSSIBLE" (energy consumption), with the only evidence being "ESTIMATIONS" and "ASSUMPTIONS", well, quite frankly, I just call that a flat out fucking lie.
    But thanks for your 2c. I've gone ahead and invested it into more Bitcoin.

    Ugh... you should be able to comprehend that this kind of estimate can be created mathematical without actually measuring the actual use - which is what the disclaimer was really saying. This is a math problem with a known methodology/solution with known computing capabilities. We know the basic consumption model for energy compute... hence the estimation.

    But I guess you think all those engineers who spec power and hvac in buildings are just fucking liars too...

    1 month later
    #385 2 years ago
    Quoted from rai:

    sorry didn't read the entire thread, but if someone created the bitcoins that can be mined, why did they do it? I mean it sounds like someone put them in a mine and you need to use a computer to solve (mine) a problem. But what is the point of the computer (is there any value to solving the problem?).

    The system is purely self-servicing. The calculations are used to validate the transactions in the bitcoin system - the compute power is not being applied to some external problem to solve like SETI, global warming, or general super computer needs. The compute is all focused on "itself" for a lack of a simplier definition.

    It is not a distributed computing system for solving general tasks or other interests.

    #388 2 years ago
    Quoted from pezpunk:

    Only one thing's certain - the skeptics have been wrong so far.

    Yeah, but that's like a Smoker saying "If smoking kills, why am I still alive right now?". The fact the incident hasn't happened yet does not nullify it's probability or impact.

    Bitcoin's value keeps going up because it seems the first rule of bitcoin is... you must hype bitcoin.

    The skeptics still have valid concerns because the value or popularity of bitcoin does not alter the root issues people have with this iteration of the technology. It also doesn't address that nearly all the value is in SPECULATION - without any real backing... which is why people have a hard time believing it will weather any disruptors well.

    Popularity and speculation can boost a value at a point of time - it does not make it more fundamentally sound.

    #391 2 years ago
    Quoted from Astropin:

    I think that's the part the "tulip" yellers are missing. Cryptocurrency could (could... might) have real future value (usefulness / longevity). It could end up eventually being the defacto world currency (maybe...someday). Will that be Bitcoin specifically? Who knows.

    But that's just it.... The future of Cryptocurency is not the same as the future of Bitcoin. Bitcoin is just one iteration... there is nothing locking it in place as 'the winner' or even a player!

    So saying "block chain is the future..." or "cryptocurrencies are the future..." may all be perfectly valid... but that doesn't mean anything about Bitcoin. The only thing holding bitcoin in place is the current bitcoin holders and the miner's willingness to participate.

    Quoted from Astropin:

    Again... yes the value has shot up... and that sets a lot of people's alarms off. MUST BE A BUBBLE... JUST LIKE TULIPS THAT NO ONE ELSE BUT ME KNOWS ABOUT... MUST WARN THEM.
    But if Bitcoin has a future use as real currency...or even if it has a future as a store of value...then 10k is still just the early begining of its long term value.

    Think about this... let's say you are a major player in a economic loop... a person holding goods of value or a policy driver.. like a government. You've decided that blockchains are the future... you are big enough to shape the landscape. Do you think that entity is going to pick bitcoin as the foundation when someone else has already created all the value you start with zero?? Hell no.

    A disruptor will start another system and lure people into buying into their model... not take an existing one completely controlled by other people... that itself is only anchored by history, not holding onto anything that intrinsically makes it hard to dislodge.

    Look at how quickly something like Pokemon Go propagated... in weeks you had tens of millions of downloads. That is the new world order... with purpose something can spread to millions of installations in days. "prior footprint" means almost nothing anymore.

    #416 2 years ago
    Quoted from Astropin:

    Maybe. Maybe if Bitcoin gets a strong enough following it can't be stopped. The only way to completely shut it down is to shut off everyone's computer. Outlawing Bitcoin in and of itself, might (might) not be enough to stop it. Certainly it would be a serious blow but it could eventually crawl its way back even from that.

    They don't need to 'stop it' - just have something else more interesting. Or what if a flaw comes out that erodes the credibility of the solution.. All it takes is for interest to move to something else... because the unit has no actual value of its own.

    Remember right now, bitcoin is a property people are speculating in. It's not really being used as currency... it's being hoarded because people think it will be a commodity worth something. But it's not a commodity, it's a virtual token... whose valuation is driven by 'exchanges' and people within the community itself.

    My point with the post was... if a major player were to move into the space, why would they adopt something where other people already hold most of the value? They'd start something new and try to push it's adoption. Now imagine if that player were the financials or a government... they have a lot bigger hammer to 'push adoption' with...

    #417 2 years ago
    Quoted from TRAMD:

    It is my understanding that it is solving/validating transactions of existing coins that allows new coins to be obtained. If that is correct, what would be the motivation to continue to mine them at the point that it becomes prohibitively expensive (it is also my understanding that each mined coin becomes more and more difficult) to do so or when there is nothing to be obtained after they are all mined? Doesn't the nature of Bitcoin mean that it could no longer be used as a "currency" at that time because the transactions wouldn't be processed?

    They can recover fees for processing the compute that validates the transactions. Today even the model functions in a market where miners can set rates on what they charge to validate transactions.

    But the problem of becoming prohibit-ally expensive to compute is a problem as are numerous scaling problems the current system has... which is why most don't see it as a viable global currency in its current form.

    #468 2 years ago
    Quoted from pezpunk:

    agreed ... but so what? why is it important that it be a widely-used direct currency? (honest question)

    Because if its not... it's purely a speculative investment whose only driving force is trading between speculators and without a future for the product, you kill the outlook of future escalation = the bubble pops.

    Quoted from pezpunk:

    transactions through Fidelity and other brokers can take days to settle, and have much higher transaction fees. plus, as long as the integrity and security of the transaction is assured (by the blockchain public ledger), then the delay isn't that big a deal.

    It is when you have no trust behind it. Do you hold all goods until settlement? We know how that stunts consumer transactions (holding till check clears, etc) and would make it virtually useless for real-time exchange of goods. Settlement time isn't a big deal because we are dealing with institutions that have backing.. through insurance, capital reserve requirements, fraud protections, etc.

    Quoted from pezpunk:

    i dunno, i think they are probably waiting for the price to stablize. that's probably more important to them than the potential upside of it continuing to inflate.

    A currency that isn't stable... is risk for a business. They don't want to take on that risk when there are safer options available.

    The speculative trading is great for the people collecting the fees and for the early adopters trying to time their sells... and is horrible for everyone else and the future of bitcoin actually having a practical use.

    Right now it reminds me of the Penny Bidding auction sites. The action is in the transactions, not the actual product being sold. I don't trust the trading indexes or exchanges at all... the conflict of interest and lack of oversight is pure combustibles waiting to go up...

    #539 2 years ago
    Quoted from acebathound:

    I'm left wondering what the heck is going on in the world when millionaires and billionaires can be created overnight with virtual currency that had been in-use for illegal activities for years. It has a potential impact (even at today's price per coin) to redistribute a large amount of the world's wealth to a HUGE number of illegal entities that were doing business in Bitcoin the last 8 years. And somehow that's allowed to happen by our governments? Fear and greed keep driving this because there's no intervention and it's seen as easy money. The average Joe doesn't understand it *at all* and they get talked into it by friends, family, relatives for the easy money or fear of losing all they worked hard for their entire life. People buying into it are apparently okay with an unknown person/group/country at the top holding a million bitcoins. Many don't know the illegal origins of the currency and yet are buying into it because of media. The more coverage, the more investors & the higher the price goes -- ultimately helping groups involved in illegal activities have more purchasing power or control when they inevitably cash out and use whatever currency nets them the most to purchase weapons. This gets feeling like the end of it all here. Short-term visions of making money quick & instant access to exchanges allow anyone to throw their net worth toward it to make a quick buck, but could very well fuel dramatic shifts of control in this world.\

    The dark web angle of bitcoin is interesting, but not really a significant component of if the thing should succeed or be legitimate.

    What is far more important is the players who stand to be able to manipulate the market... aren't necessarily people you trust.

    #546 2 years ago

    if you can't access your wallet... you're toast. Doesn't matter about Coinbase at all at this point. Transaction is done... its you who needs to recover your private key more than anything.

    Just that Coinbase knows what wallet they sent to... doesn't help you. You still need the private key. no key... no access.

    you gotta hope that your private key was stored somewhere where you can access it and if it was encrypted, that you know the passphrase.

    #562 2 years ago
    Quoted from vicjw66:

    I just read that some company lost a couple hundred million dollars worth of bitcoin because some employee accidentally deleted the key folder. Crazy that there isn't a good backup system

    There are easy backups... but just like digital photos, if you trust only a digital copy.. you are at that copy's mercy.

    All key pair systems are like this (even the keypair behind SSL certificates for everything on the web). You lose it, the certificate is useless. The delta there is a Certificate Authority will sell you a new one because they don't use the private key to identify who you are.. they use other vetting. For bitcoin, without your keypair... there is no way (or one) to validate you as the owner of those other keys.

    The same problem exists if you don't secure your keys properly.

    These are the tradeoffs PKI has... and most people simply aren't used to treating their private key so seriously... they think its like a password that some entity could just reset, or revoke access, etc.

    A key can be represented as text... just print it out and keep the copy safe. The wallet formats I'm less familar with, but I bet there is an offline version you could keep as well.

    #599 2 years ago
    Quoted from pezpunk:

    here's an article that kind of explains what i'm getting at. it points out that you COULD run bitcoin's transaction network on a dozen old PCs, and get bitcoin to a point where it consumed less energy per transaction than a Visa card. it's the mining that's consuming all the energy, not the transactions themselves (although the miners are also calculating the transactions).

    but Bitcoin mining IS verifying transactions - they are not separate things. Miners are rewarded for solving the block (group of transactions) in new BC (and potentially transaction fees).

    The point in the article is not that bitcoin transaction load is only a tiny portion of the mining activity - but that the energy used now doesn't HAVE to be that way if you didn't have the current mining situation. The self-correcting difficulty metric is what is driving up the cost of mining due to the influx of mining ability (the 'strength of the network')... and the bitcoin craze drives people into mining... so the complexity continues to balloon. The pace of generating new blocks is relatively constant... but the more people that try to get involved, the more effort needed, and hence we get into the massive compute needed now.

    The dozen PC example is if no one else was doing the work... not that a dozen PCs represent the work dedicated to transaction computing. It's kind of a stupid reference really.. because it represents a hypothetical that would only exist if bitcoin was dead

    #620 2 years ago
    Quoted from Spyderturbo007:

    It's broke again. The price is bouncing around like crazy and trades appear to be executing out of order. I've watched a trade for $17,000 get executed and then the next one is for $17,500. Then it goes back to $17,000.
    They definitely have issues.
    Edit -> I was able to grab a screenshot.
    This shouldn't happen. $17,260 -> $17,395 -> $17260.

    Trades happen when the buyer and seller criteria align... that doesn't necessarily result in a continuous line of prices.

    #631 2 years ago
    Quoted from S37VEN:

    With all these articles coming out about mining consumption, I would like to see comparisons made for the total global energy drain for classes of consumer electronics, such as refrigerators, TVs, etc. My guess is that those statistics would help provide some much needed context here.

    The piece you are missing is those things provide something in return for their energy...

    And let's be real... they are comparing the energy output of entire COUNTRIES..

    But to spitball for you... a refrigerator made post 2000 should consume about 600kWh. In 2016, there were approx 126 million households in the US. If you assume 1 for a reasonable average.. That's 75.6GWh... compared to the 32.3TWh estimate from the source article. So Bitcoin is consuming 427 TIMES the amount of energy of all the fridges in the US. I considering the US probably has one of the highest rates of penetration for that kind of consumer good.. and the US is about 4-5% of the global population.. that means even at US rates (upper limit), Bitcoin is about 20x more energy than the thing that keeps our food safe at home... globally.

    And Bitcoin does nothing.

    #632 2 years ago
    Quoted from Astropin:

    That being said Bitcoin does not actually EVER need to be utilized as a currency to become even more valuable. It looks like it's literally turning into the de facto "digital store of value". I know many of you hate this but...... "digital gold".

    Such a model always requires 3 separate parties to agree... The buyer, the seller, and the NEXT buyer. As such, the strength is only as good as the faith of the NEXT guy in the chain. Government backing works because the NEXT guy has faith in the government's willingness to trade him out... or if the thing traded itself has other uses, the buyer is confident they will be able to move it on again for value.

    That's why having something BEHIND the unit is the difference that makes something stable or not. Bitcoin does not and is driven almost entirely by speculation. That means, as soon as confidence flops... so will any potential for trade value.

    You don't need bitcoin to represent a verifiable token you can trade and pass along. Until someone with something of value is willing to stand behind bitcoin and garuntee its value to a commodity that makes sense outside of Bitcoin... it's value is only as good as the speculation that more people will get involved later.

    Meaning.. it's just a time game. And there will be technical hurdle or pivot before the clock runs out anyway that will cause the shock.

    #638 2 years ago
    Quoted from Astropin:

    True...but if "the next guy in line" involves the entire planet it could still serve that purpose for a long time (possibly).

    Such logic assumes you have an audience that hasn't heard the bad news 'yet'. Not a theory to bank on in the world where social buzz spreads faster than actual news.

    Quoted from Astropin:

    It does have other uses. In the future (possibly even the near future with successful lighting network transactions having already taken place) it may very well serve as a useful currency once the volatility eases up (and as long as it doesn't completely crash beforehand). It's ultimate value as a useful currency (maybe) could push its value even higher than its usefulness as a "digital gold".

    I might be banging a supermodel.. and get hit by a meteor at the same time. Maybe...

    'once volatility eases up' - this is a misnomer in itself when there is nothing to stabilize it and its all fueled by speculation. That's why the issue is getting WORSE, not better.
    The bigger the target it has... the more risk of government intervention or hacks or disruptors. The market isn't going to get better as it grows... it stands to get worse. Decentralized systems tend to get more chaotic/segmented as they grow... not settle down.

    It's very hard to gain stability later when the system lives on 'ifs' and 'when'.

    #683 2 years ago
    Quoted from Astropin:

    He makes some good points. Is he right? No one knows. How will it handle a recession? He thinks it will totally crash in one. .

    No. - he said he didn't know what it would do while he does have a track record on others. Uncertainty vs a probability based on past performance.

    #702 2 years ago
    Quoted from Astropin:

    Clearly there are two kinds of people in the world - Those who know Bitcoin is a shame/bubble with zero intrinsic value and will therefore eventually go to zero.
    - Those who believe that Bitcoin has a future as either a store of value or a usable currency or both. If either or both of those end up being true then the value is going to go a lot higher.
    Both scenarios would look and behave the same. So we won't know who's right for quite a while. Vs traditional investments Bitcoin will "bubble" and "crash" many times along the way (already has). So until to goes to actual zero or shoots up and then eventually starts to stabilize in value we still won't know who's right.

    You missed the most important group...

    - The people who have no interest in bitcoin's future as anything except something with lots of upside potential for appreciation in a short period - so it's a flipper's dream. The ones buying and pumping bitcoin as an investment purely because they see the potential to buy now, and sell much higher.

    This group doesn't need to see bitcoin be anything but something to sell higher than they bought it. They don't care if bitcoin goes to zero.. as long as the crash is after they sold. They don't care if the doom is near.. because they feel they have so little exposure that if it crashes 'no big deal'.

    This is the group that is pumping real money into exchanges... while the real manipulators are happy to see them and others keep coming in because they help validate their scheme.

    #767 2 years ago
    Quoted from pezpunk:

    it's going to be really annoying when bitcoin goes from $17000 to like $8000 or something, and some guy who's been shouting "SCAM" since it was $10 starts going "I TOLD YOU SO" even though the truth is he'd be a millionaire if he'd invested in it when he first started calling it a scam. i mean ... if you call something a scam and it increases in value 1000-fold and then loses half its value .. you were still wrong by a factor of 500.

    SCAM doesn't mean worthless - it means misrepresented.

    If you paid for your telsa and they delivered a chevy volt... you wouldn't argue "You still got 1/3 of what you were sold".

    Its real easy to avoid being called out in an investment when you say "theres no telling how high it will go!" - because you've made no real commitment. That's just avoiding commitment, not being right because you timed it properly.

    When people preach about "currency of the future" and why you should buy now.. that's gonna be scam territory.
    If you preach "timing market pricing to make a profit" and you don't really give a shit about what bitcoin is... you're just an honest flipper, not scam-y.

    The problem is, people who really are just flippers... but then use the scam-y points to try to justify their position as not just flipping for profit... or as reasoning to recruit others.

    #772 2 years ago
    Quoted from Astropin:

    Agreed. Has anyone in this thread done that?

    Yes, a ton. No people aren't recruiting in this thread, but they were using this argument to defend their buying/positions and why the future of prices is UP. Which is basically the same thing... creating an image of 'missing out' that creates pressure on others to get in for Fear of Missing out.

    #784 2 years ago

    Don't be naive. Just because someone doesn't say it outright doesn't mean it's not there. It's one of the oldest tricks in the book... generate sales indirectly by raising awareness and setup the audience to make them draw the conclusion that they should get in, and don't delay or you may miss out! It plays out in so many cons...

    All these stories and blogs about how great bitcoin is and how "the sky is the limit" are not historical pieces Running around boasting to strangers about how hot and success you are for investing in crypto is self-serving because all prior buyers benefit from new money and interest in the product.

    It's not people just defending their own speculative purchases against external scrutiny. If it were, all they'd do is say "Scoreboard..." and laugh while counting their money.

    #787 2 years ago
    Quoted from Astropin:

    You wouldn't give your bank account number to anyone. You hold your cryptocurrency...not the exchange and not a bank...you.

    And how many people do you think are really holding onto their own wallets vs people who are using online wallets? Still have to give (and maintain) identity information and banking details in those exchanges to realize any value.. and most now are doing that up front, because they aren't mining themselves... but buying.

    When sites promote 'make sure you keep your recovery phase' as the backup strategy.. that is not really the same as keeping the wallet (addresses, and keys) offline yourself.

    As usual, convenience will erode security and promote lax behaviors that will create liabilities. It just comes with the turf of dealing with the general population.

    #791 2 years ago
    Quoted from ExtremePinball:

    Listen snowflake, just because you have no self control, doesn't mean that the people here that support Bitcoin, and crypto in its entirety, also don't. Just because you are easily influenced into "fitting in", doesn't mean you can just project your personal character defects onto an entire community..

    Do you seriously not grasp the difference between understanding and articulating something vs describing your own feelings?

    Do you think every psychiatrist is really inflicted by the things they are able to describe?

    ... This kind of retort is just what people do when they have no real response. Just attack the messenger...

    #806 2 years ago
    Quoted from Astropin:

    Not my problem if people don't know how to protect themselves.

    It will be when the next mt gox situation happens and your portfolio gets pummeled because of the backlash... or the rash of "I lost my millions..." wallet stories gain too much press and it slow things down. The public perception of bitcoin IS your concern since that is the only thing driving it.

    The point is it really doesn't matter how far you can take security if the bulk of the pack isn't... and the ecosystem is promoting lax behaviors... it creates a tinderbox that is ripe to burn.

    #808 2 years ago
    Quoted from Spyderturbo007:

    I know 6 people that have Bitcoin (outside of this thread), 5 of which keep an offline wallet. The other person bought $250 worth last week, so purchasing a hardware wallet isn't worth it yet.
    On the other hand, I know about 1,000 people that do online banking and only about 10 know to look for the green lock and the httpS:// in their browser. Even less than that know that you should never click a link in an email from your bank and you should always manually navigate to their website.
    People will be as security conscience as they want to be when it comes to everything. Some people have a normal door lock, others have laser grids on their windows, security cameras, piles of guns, etc. Why should this be any different?

    That was kind of my point... you can't point at the most extreme example of secure and act like that is the Norm. So yes, your 10%-20% maybe doing the most secure thing... that doesn't mean the entire market behaves that way. That means the risk and exposure for the larger market and the consequences it would bring... are real and represent a significant risk. So citing "perfect behavior" is not really a retort to the concern over accountability and recovery - the perfect behavior is not necessarily representative of the norm.

    the center mass will move over the unstable ground... because the old but secure will be overtaken by the new, but less secure. This means the body as a whole is still at risk...

    Your banking example is valid... but there are additional protections in place that either help someone recover from such mistakes, help cover losses, or systems to prevent a major incident from being catastrophic to the system as a whole. In short... protections that would soften the blow to the larger mass.

    It's a simple fact that reliance entirely on key/pairs without the ability to re establish identity is a catastrophic risk to an individual. It's a security model that has tradeoffs that the general population has shown time and time again it can't handle. And the "convenience" features being put out there are making it more accessible- but aren't touching the basic tenant that the risk is based on.

    It's a consequence of the pure decentralized model... trust no one in particular. That means there is never one entity to ultimately trust as an override. And it's difficult to move to a consensus/majority model that doesn't compromise you... especially when the voting power is not equally distributed (as is the risk in what is happening now in mining)

    #809 2 years ago
    Quoted from ExtremePinball:

    Wrong answer. Fear mongering is not a message.
    If you have nothing to contribute to a thread entitled "Somebody explain Bitcoin to me", then I invite you to leave.
    Again, shit in another thread.

    If you want an echo chamber... you're in the wrong place.

    1 week later
    #906 2 years ago

    However, the vast majority of people in the world have never even heard of Bitcoin, much less crypto currencies. I personally ask every business that I enter if I can pay with Bitcoin.

    remember when some people said there aren't people pumping bitcoin here... well what do you call this? When you think bitcoin is all UP UP UP - why on earth would you want to pay in bitcoin today? This is all about trying to create buzz to keep the speculation pump full...

    #911 2 years ago
    Quoted from ExtremePinball:

    You do understand that your opinion in this matter means less than nothing to me, right?
    I ask if I can pay because I am trying to gauge the current depth and exposure to the general public. This is called due diligence. Nothing more.

    Then what does getting an uninformed response cause you to smile?

    Quoted from ExtremePinball:

    You are too small minded to understand that this cannot be pumped, by one man asking a question, with no further information being exchanged.


    As for suing... buy a dictionary first.

    #983 2 years ago
    Quoted from pezpunk:

    the point is the term "intrinsic value" is pointless, has no practical application, and merely serves as a fallback argument that doesn't actually mean anything.
    you can't eat gold.

    You can't eat rubber either... but it still has a purpose and value.

    The term is not pointless - not does it need to be limited to survival to have some value outside of a unit of trade

    #998 2 years ago
    Quoted from XXVII:

    It's irrelevant how many cryptocurrencies exist in regards to whether people value one over the other

    Yes and no. Yes in the pure sense of your argument, but no because many are valuing BTC for (ill-informed) reasons. The problem with your pure argument of 'people are valuing bitcoin... because its bitcoin, not zimbabwae-Coin" is "why bitcoin" is built on premises that can easily be surpassed by look-a-likes.. or BTC can crash from reasons unique to BTC and not other currencies (like a software flaw, etc).

    2 weeks later
    #1263 2 years ago
    Quoted from Spyderturbo007:

    Mine isn’t near as pretty as Pezpunks, but I’m still netting about $230/month in ETH. I just have a few RX480’s so the hash rate isn’t very high. My effective hash rate is getting killed by the ice age.
    Other than the GPUs, it’s just parts I had laying around. I just screwed everything to a piece of MDF left over from my basement build.

    Left in the open isn't as effective as a cooling housing that is forcing air in/out in specific ways.... because you aren't moving the ambient air or really getting the hot air 'away' when just left open.

    #1265 2 years ago
    Quoted from Spyderturbo007:

    You might want to tell these guys about the physics of cooling a crypto mining rig
    My 3 little GPUs running at 60% of their max fan speed while hashing at 65MH/s will be just fine.

    Doing something stupid at scale... doesn't make it any less stupid.

    A real DC uses hot and cool zones with forced air moving in specific directions to work with convection movement to ensure heat is moved out and cool is moved in. And for those who build custom hardware for their DC... like the googles of the world, etc... you build your heat exchangers on the hardware intended for that kind of setup. It's an integrated system.

    #1268 2 years ago
    Quoted from pezpunk:

    i keep the door to my office closed. it has two windows, both are slightly open. the rig sits below one of the windows, with its fans sucking air in from outside. the other window has a stand-up fan blowing air out the window. i can control the temperature in my office very precisely just by turning that fan between off/low/med/hi. on hi, it quickly turns frigid in here. when off, it gets pretty hot. the fan is usually on "low".

    That's frightening

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