Anyone on the Bitcoin train?

[1957Buck]

It sells snowflake, don't you worry.

 

WB I should worry 

[BenedictGomez]

$75M in Bitcoins hacked

 

http://money.cnn.com/2017/12/07/technology/nicehash-bitcoin-theft-hacking/index.html

[Rutting Buck]

Here’s the ultimate problem, Bitcoin isn’t back by gold or any real thing of value. Bitcoin is only worth what someone wants to pay for it. It is widely used in the sales of illegal drugs and by people trying to evade taxes

[newjerseyhunter]

Here’s the ultimate problem, Bitcoin isn’t back by gold or any real thing of value. Bitcoin is only worth what someone wants to pay for it. It is widely used in the sales of illegal drugs and by people trying to evade taxes

Name a currency backed by gold or anything of real value. 

 

And just for fun... what % of US paper currency has traces of cocaine on it? lol

[mfried]

i would be interested to see an explanation from a proponent of how it works, how its created and how it is monetized.

[Haskell_Hunter]

$75M in Bitcoins hacked

 

http://money.cnn.com/2017/12/07/technology/nicehash-bitcoin-theft-hacking/index.html

 

Yep, a wallet hack, not a blockchain hack.

[BenedictGomez]

i would be interested to see an explanation from a proponent of how it works, how its created and how it is monetized.

 

Funny you should mention this.   I've long known "what" Bitcoin is, but I didn't know how it "works" in terms of the mining, its' original genesis, and overall security etc..    I'm still reading and am not quite there yet, but so far I think it's bat**** crazy.

 

The reason I decided to learn is because I recently heard that Jamie Dimon said he would FIRE any employee who go involved with it, which surprised me, and I wanted to know whether he had a solid point in his reasoning or whether he was simply trying to protect Wall Street interests.   So far I'm coming down on the side of, "solid point".

[Mikelodeon]

I really believe there is not such easy money. The only way that works for sure is working hard, be smart money. Is just too good to be true. If everybody wins... Who loose? Usually the first ones in a scheme take advantage, people on the bottom (last ones) got all the risk. Good luck

[Axiom]

 

I'm still reading and am not quite there yet, but so far I think it's bat**** crazy.

 

 

 

Never mind all that.. Invest in something new... I have Bytecoin for sale!!!.. Normally I charge 8 bitcoin for them but I have a introductory offer running now.. So for only 7 bitcoin you can get one of my bytecoin..  But that's not it!!!.... Order my bytecoin today and you'll receive 2 free Nibblecoins....      

[Haskell_Hunter]

i would be interested to see an explanation from a proponent of how it works, how its created and how it is monetized.

Oh, boy, are you sure you want to hear the explanation.  This is somewhat complicated, but I'll give you a very high level of how value is ascribed to Bitcoin.

 

The value of gold comes from time.  Back in the day it took very little time to get more gold from the earth.  However, there is a finite amount of gold on the surface of the planet, and it takes more resources to find and collect this gold.  Today it takes a considerable amount of time to get gold form the ground.  Unlike the prospector days, you cannot find veins of gold like in all of those stories we grew up with.  Now miners find gold in highly probable locations, but strip everything out of the earth and collect fragments of gold to get a quantity of any value.  So more time and effort goes into getting an ounce of gold today than in the past.

 

Bitcoin is somewhat similar in how its value is created.  In the early days you could easily mine a few bitcoins from the ledger process.  There are two parts of bitcoin:  The blockchain and bitcoins.  They are two distinct things.

 

The blockchain is an accounting ledger.  Each transaction is "stacked" on top of one another similar to an accountant's notebook ledger.  However, every transaction in a blockchain is mathematically dependent on all previous transactions.  This means if a nefarious actor were to try and corrupt the blockchain by injecting false transactions, they would need to recalculate the entire ledger and recirculate it.  The size of the current ledger is so big that it would require more computing power than the entire planet currently has.  This is the "killer app" part of bitcoin--a ledger that cannot be corrupted and is used to validate all transactions.

 

To make the blockchain even more impervious to corruption, it is circulated in near real time across the Internet to other bitcoin users.  If you download a bitcoin wallet for the first time, it takes almost 24 hours for it to synch up before you can actually use it.  This is due to its size and the computing resources required to store it on your computer.  When a transaction is completed from a wallet, the blockchain is recalculated to add that transaction and circulated across the Internet.  The way it moves is known as exponential growth.  It is rapidly circulated to all of the nodes at incredible speed.  This prevents someone from corrupting a new transaction and sending it out to other nodes.  For example, if I paid you $5 in bitcoin and then modified the transaction to say that you paid me $5, and I tried to send that out to the Internet, the modified transaction would never be able to influence enough nodes to make it stick.  The blockchain would invalidate that transaction because more nodes would have the correct transaction versus my modified one.  That is the result of exponential growth.  There is no way to do that unless you had control of millions of blockchain nodes and the ability to recalculate and distribute the blockchain more rapidly.  Theoretically it's possible, but you'd spend billions of dollars trying to do it only to yield a few millions of dollars.

 

Bitcoin is the currency built on top of the blockchain.  It has no value, like gold (I'll get to this point in a moment).  When the blockchain ledger is recalculated, the computer that finishes the calculation "wins" a bitcoin.  Back in the day, as I mentioned, this was easy to do since the ledger was significantly smaller.  Now that the ledger is larger, it takes millions of computers a much longer time to finish the calculation.  So "mining" one bit coin take considerably more resources to do, very much like gold nowadays.

 

The last part is the "value" part.  Things only have value if someone else desires that.  It's that simple.  I have an original, first production run Macintosh computer.  To many people on these forums, it has no value to them.  To a hardcore Apple Computer fan, it may have tremendous value.  So I'd never sell it on these forums, but on one of my other nerd forums, I could get $20K for it.  That's what value is.  Gold has value because of its unique properties.  It does not corrode, it is the best conductor of electricity (better than copper), and it does not interact with other elements.  It will never lose its luster either.  It's that last part where it gets its historical value from.  It's "pretty" and a soft metal to work with.  Ancient humans could get it from a river bed, heat it up next to their fires and soften it up to mold it, and then adorn things with it.  Copper, on the other hand, is similar to gold in that it's a soft metal that's easy to work with, but it corrodes rather quickly (especially near the ocean).  Gold didn't do this.  So that's where it's value came from.  It was turned into coinage by the romans, and up until the middle of the 20th century, it was the element we used to give value to our currency.  That has all changed, and our currency is no longer backed by gold, but it's known as a "free float" currency.  It's value is based on something entirely different, and could be referred to as "made up" because of that.

 

Bitcoin has the same "made up" value, with the difference being that it shares a common attribute with gold--the challenge in getting more if it into circulation because of the effort required to do so.  It's a hybrid of sorts.  And bitcoin isn't the only virtual currency out there, there are many of them.  But it's the first one and the most popular one.  Ethereum is another one, and they have their own global marketplace that it works within.

 

That is the very high level description of how it all works.  I left a whole bunch of technical crap out to save you wading through acronym soup.  But I'd be happy to answer any question you may have.  I teach this stuff to my students, so I'm very familiar with it.  And I also would never invest in it, and never have.

[3Blade]

My brain just locked up half way through this explanation        

[Rutting Buck]

Name a currency backed by gold or anything of real value. 

 

And just for fun... what % of US paper currency has traces of cocaine on it? lol

 

The US Dollar is backed by gold in the US reserve

[rocky]

The US Dollar is backed by gold in the US reserve

 

 

It used to be.

[Haskell_Hunter]

My brain just locked up half way through this explanation      

 

I at least provided a courtesy warning at the beginning of it.  The details are far more mind-numbing.

[1957Buck]

My brain just locked up half way through this explanation