Eeeediots guide to bitcoins

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Dr Bunsen Honeydew
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Eeeediots guide to bitcoins

Unread post by Dr Bunsen Honeydew » Thu Jul 20, 2017 6:01 pm

Is it a scam.
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Lurcher300b
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Re: Eeeediots guide to bitcoins

Unread post by Lurcher300b » Thu Jul 20, 2017 8:37 pm

No. At least no more so than any currency.

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Re: Eeeediots guide to bitcoins

Unread post by Dr Bunsen Honeydew » Thu Jul 20, 2017 8:42 pm

Explain it then, in eeediot terms.

Please
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Re: Eeeediots guide to bitcoins

Unread post by Lurcher300b » Thu Jul 20, 2017 10:49 pm

To quite Wiki
Bitcoin is a cryptocurrency and a digital payment system[13]:3 invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. It was released as open-source software in 2009.[15]

The system is peer-to-peer, and transactions take place between users directly, without an intermediary. 4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency.

Besides being created as a reward for mining, bitcoin can be exchanged for other currencies,[17] products, and services in legal or black markets.

As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
Simple, for money to work you need a record of who has what. With physical money its was simple. If you bought something you exchanged the physical tokens, so one party had more than before and the other party had less.

Then Banks got involved, and kept a list of who had what money, so you didnt have to physically carry the money, you just used a bank to keep track of who has what, and after a transaction who has more and who has less. This makes the banks very powerful, without their ledger of who has what it all falls apart.

Bitcoin replaces the bank(s) with the blockchain, the blockchain is a distributed set of data, shared amongst every user of bitcoin such that no one (or many) can break the information held on it, or see it because its encrypted. But every time a transaction takes place just like a bank, the ledger is updated and one sides total goes up and the other down. Unlike the banks, no one knows where the money comes from, as the transaction is encrypted, so its possible to buy something from someone you have never met using currency that cant be traced, but both sides are secure in knowing the transaction happened.

Like any currency, bitcoins are created. Unlike other currency, the creation is not physical, it just appears in the blockchain. The process of maintaining the blockchain is done using a process called mining. By mining, new coins are created to reword those running the blockchain.

The main points are

1. Its secure
2. its anonymous
3. Its distributed
4. transactions are free or very low cost
5. there is no central control

Currently 1 bitcoin is worth £2086.79

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Re: Eeeediots guide to bitcoins

Unread post by Dr Bunsen Honeydew » Thu Jul 20, 2017 11:15 pm

So it started with nothing and now has billions, so who has that money now, isn't that a scam.
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Re: Eeeediots guide to bitcoins

Unread post by Lurcher300b » Fri Jul 21, 2017 12:41 am

Well, this may fall prey to your "it is because I say it is" form of logic, but no, its very much not a scam, the money is in the electronic wallets of the people who use bitcoin.

Remember all currency started with nothing and may now have billions, but the difference is those currencies are controlled by governments and all the money is in the hands of the banks who can use it to create more money for them self.

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Re: Eeeediots guide to bitcoins

Unread post by Dr Bunsen Honeydew » Fri Jul 21, 2017 1:04 am

Ad hominem Nick, pack it up, this thread is not about me !!! I am asking questions, not even stating opinions. I genuinely don't understand how nothing can become something without someone gaining from it. If they gain then it must be at someone elses expense from my basic understanding of economics.

I can understand how a monetry system can grow out of coin use, especially valuable metal coins, but these Bitcoins don't exist so how can they have value.

Modern capitalism started with the need to modernise the UK navy and the Bank of England was created to borrow money to do this. I understand how that works. I simply do not understand this, as there is no value in any of it unless someone says there is. Where as real economics is backed up by contracts, loans / borrowings / bonds, that create interest that increases wealth, at the expense of built in inflation for the system to work.

There is nothing with bitcoins, yet a coin has inflated to over $2000 dollars, who gained from that.
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Re: Eeeediots guide to bitcoins

Unread post by CycleCoach » Fri Jul 21, 2017 2:30 am

A paper note has practically zero physical worth. It's "value" derives from reserves salted away in the Bank of England (Or Fort Knox or wherever.) In theory, there is an equivalent value of sterling silver to balance the value of every English note issued, but the reality is that there is only a small fraction of the total currency value in the vaults. The rest is just imaginary.
Banks trade daily in amounts which bear no relation to any real measure - the solidity and value of precious metal coinage is a concept that belongs in history.
Even though there was "some" silver to start with, the reality is that "money" is just pieces of paper or numbers on a spreadsheet living on a bank's computer.
In the end, there is barely any difference between Bitcoin and any currency.
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Re: Eeeediots guide to bitcoins

Unread post by Dr Bunsen Honeydew » Fri Jul 21, 2017 3:02 am

Yes BUT we know who makes money from that, it is the state, and they print the money. Who creates new bitcoins at over $2k each. Who created the first ones, who made all the money. It didn't just suddenly appear. I read some are now multi millionaires through it, who are these people, are they subject to any rules, are they subject to tax, are they subject to anything that is real. OR do we wake up tomorrow and suddenly find they are worthless because most people have decided they are worthless, or that it has just been a big scam and stitch up and the bubble has burst - you see I don't know !
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Re: Eeeediots guide to bitcoins

Unread post by zebbo » Fri Jul 21, 2017 8:18 am

I just read through the Wiki page on Bitcoin and it does my head in. Ok, I can see that the physical reserves of precious stuff isn't enough to actually give us all our own personal amount if we all decided to take all of our "money" out, but there IS a big lump of actual "stuff" sitting somewhere that we are all moving bits of about virtually. I'm aware that I can buy things on my computer and that actual stuff never changes hands but if they wanted to they could cash-in and take a lump of gold. With Bitcoin there never was "stuff" to relate back to. How can someone just plop this funny-money into the system and suddenly attach that to the reserves of the precious stuff ???
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