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What are Bitcoins?

13

Posts

  • Donovan PuppyfuckerDonovan Puppyfucker A dagger in the dark is worth a thousand swords in the morningRegistered User regular
    A B# tone played at 87 dBa for four seconds is worth ten US cents.

  • acoindracoindr Registered User regular
    edited July 2012
    You should check some of the other threads. You think this is funny, but it is at best a half-hearted effort.

    Go into SE++, and wait until the Eat Poop You Cat thread reaches it's terrible climax. You'll either laugh your arse off, or require psychotherapy.

    Oh boy.
    acoindr wrote: »
    I might have to hang around here a little while longer. You guys are hilarious.

    You want comedy?

    At best Bitcoin is a techno-utopian fantasy fueled by the paranoid distrust of big government and fiat currency. A naive belief that because smart people have thought about the problems then they aren't problems.

    I don't think just thinking about problems solves them, and I don't know that Bitcoin solves any for certain. I've said earlier it's an experiment (of course Tim Berners Lee's HTTP was also experimental). I do believe Bitcoin is a step in the right direction and has lots of potential.
    Ignoring the vast history of humanity where smart people make terrible decisions again and again and again. Bitcoins proponents are fundamentally the digital equivalent of gold bugs.

    Humans make terrible decisions, mistakes, etc. period, whether smart or not. I agree many of Bitcoin's proponents share qualities with gold bugs. But whether or not Bitcoin is successful will be determined by the free market, and I trust the free market to be quite capable.
    At worst it's a scam where a large number of the scamees think they are the scamers. A large fraction of the Bitcoin community are positively wetting themselves at the purported future where the network is made up of a majority of dumb clients with a relatively few authenticator/miners who charge a 'reasonable' fee to verify transactions. Probably in the belief that they would be the people running the authentication nodes and earn money for doing "nothing".

    A future beyond the 21 million mined coins has also been discussed. It's true people believe miners will continue to mine with the incentive of prioritizing transactions based on associated fees.

    One idea I propose, though I'm not sure it has caught on, is that a majority of transactions won't even take place on the core Bitcoin network, but instead in-house at eWallets which would be the Bitcoin equivalent of PayPal. Using eWallets improves the user experience in ways the core network can't.

    The best description of Bitcoin's I've heard is this:

    "You have a set of bingo balls, and you pull one ball out at a time and write the result down on a piece of paper, making longer and longer numbers. You have a friend look at the number when it gets to a certain length, and based on what it looks like tells you that it's either 'bad', in which case you throw it out, or 'good' in which case you retain it because it's now worth five dollars."

    lol That's clever.
    For ten times the hilarity of this thread I suggest meandering over to the SomethingAwful thread that I got the quote from. There are some real gems there, like this real thing that real people really made:

    wSvjs.jpg

    Physical Bitcoin notes are becoming a hot topic at our forum. There is currently discussion underway to make a version freely available so people can "print their own money". The way physical notes work is you send a bitcoin amount to a wallet private key, then print that private key on the paper note, including in the form of a QR code making it easily scanned. As mentioned anyone that learns your private key can spend your bitcoins. So you would give the note to someone as payment, and they could scan it with a smartphone or POS and transfer the value to their own wallet. That allows people to carry paper "money" physically, like they do now.

    The notes could only be used once in that way of course. A variation is to have a trusted party like Casascius physical bitcoins where the owner publicly listed his identity and associated addresses he used for the project. Casacius coins hide a private key with the value under a tamper evident hologram. Anyone in possession of the coin can remove the hologram and use the private key to transfer the bitcoin value to their wallet. However, as long as the hologram is intact and people trust that the coin manufacturer destroyed any ability to access the original private keys the coin could be reused and retain its value. Of course that's how paper notes originally started since they represented a deposit of gold somewhere.

    This is what I mean about Bitcoin being experimental. There are different ways Bitcoin might evolve into use which in many ways reduce or eliminate currently perceived technical hurdles, like transaction scalability, for example.

    acoindr on
  • HewnHewn Registered User regular
    Hewn wrote: »
    The actual big boys, the power-men in that kind of a scenario? Dudes with secure warehouses full of clean water, food, wood, and building materials. They will be the guys who will get all the apocalypse supermodel whores.

    Booze. That would become your big trading chip. I know if the world was ending, and I had some extra beans, I'd gladly trade that shit from some Jim Bean.

    Not everybody is an alcoholic?

    It also serves as an antiseptic and weapon (fire bomb).

    That's right, I'm ready.

    Steam: hewn
    Warframe: TheBaconDwarf
  • bowenbowen How you doin'? Registered User regular
    edited July 2012
    Pretty good vasorestrictor and rudimentary anesthetic too.

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • HewnHewn Registered User regular
    Yeah! I'd like to see a bitcoin do that.

    Steam: hewn
    Warframe: TheBaconDwarf
  • BurtletoyBurtletoy Registered User regular
    edited July 2012
    What if you printed your bitcoin on alcohol?

    Burtletoy on
  • agoajagoaj Top Tier One FearRegistered User regular
    Then you can drink all your bitcoins
    which results in an overflow.

    ujav5b9gwj1s.png
  • Pi-r8Pi-r8 Registered User regular
    I'm starting to think that bitcoin might have been invented by the CIA as a way to bankrupt all the crazy libertarians who would otherwise be stocking up on guns.

  • acoindracoindr Registered User regular
    Pi-r8 wrote: »
    I'm starting to think that bitcoin might have been invented by the CIA as a way to bankrupt all the crazy libertarians who would otherwise be stocking up on guns.

    Actually, the Bitcoin community was already contacted by the CIA and a lead developer gave a presentation there.

    And Bitcoin has been mentioned in libertarian circles via Ron Paul discussion forums. The reception has been mixed but in many ways similar to here. They seem very skeptical and don't know if they can trust it. I don't think they understand it well. As I said there is much to Bitcoin, and it's easy to gain misconceptions.

    Anyway, I've got to get back to other things. I miss the days when I had time for gaming; hopefully I'll get that time back before too long and I can revisit. :)

    Another informational tidbit is Bitcoin capitalization which I've tried to use consistently here. Bitcoin is capitalized when referring to the open-source project, or the payment network it enables, whereas bitcoins or a bitcoin, lowercase when not beginning a sentence, refer to the currency of the network. A pedantic bit of information, but it can be useful. I learned that when our forum helped a Reuters journalist cover Bitcoin.

    People first hear of Bitcoin different ways, but we generally say the entrance to the proverbial rabbit hole is bitcoin.org. From there you can explore and learn on your own, but I warn you things are disorganized, perhaps a bit like a laboratory. As I said it's very early days for Bitcoin, but hopefully better information organization is forthcoming.

    You now know much of what I do about Bitcoin, the important things anyway. I've tried to filter and distill a lot of info. Hopefully it has been helpful in clearing up misconceptions.

    Thanks for listening.

  • SchrodingerSchrodinger Registered User regular
  • SynthesisSynthesis Honda Today! Registered User regular
    The best description of Bitcoin's I've heard is this:

    "You have a set of bingo balls, and you pull one ball out at a time and write the result down on a piece of paper, making longer and longer numbers. You have a friend look at the number when it gets to a certain length, and based on what it looks like tells you that it's either 'bad', in which case you throw it out, or 'good' in which case you retain it because it's now worth five dollars."

    For ten times the hilarity of this thread I suggest meandering over to the SomethingAwful thread that I got the quote from. There are some real gems there, like this real thing that real people really made:

    wSvjs.jpg

    I don't have access to SA forums, so, and I say this in complete seriousness: is this mockery, or is someone actually promoting these particular bills with Paul's smiling mug on them?

  • T4CTT4CT BAFTA-NOMINATED NAFTA-APPROVEDRegistered User regular
    What are Bitcoins?

    fuckin' dumb

  • bowenbowen How you doin'? Registered User regular
    Yes someone was actually using them. You can pretty much print your own money since the only important part is the bitcoin UUID, represented by that QR Code.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • bowenbowen How you doin'? Registered User regular
    And yes, fucking dumb.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • SynthesisSynthesis Honda Today! Registered User regular
    Jesus, they really need to stick to minting gold coins with his ugly mug on them. I mean, the US denominations aren't the smartest looking bunch (they're not the worse either) but those things are atrocious.

  • bowenbowen How you doin'? Registered User regular
    You're going to get them to come here and rant and rave about how awesome fake currency is!

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • StormwatcherStormwatcher Blegh BlughRegistered User regular
    I'll never forget the Simpsons episode about Brazil, how they called our money "gay".

    Steam: Stormwatcher | PSN: Stormwatcher33 | Switch: 5961-4777-3491
    camo_sig2.png
  • SchrodingerSchrodinger Registered User regular
    Synthesis wrote: »
    Jesus, they really need to stick to minting gold coins with his ugly mug on them. I mean, the US denominations aren't the smartest looking bunch (they're not the worse either) but those things are atrocious.

    Libertarians aren't really known for their sense of taste. Or their design sense. Or much of anything.
    I'll never forget the Simpsons episode about Brazil, how they called our money "gay".

    I once judged a debate round where they were arguing over the economy of Brazil. Before the round, they asked me for my paradigm. I told them that I would award extra points for anyone who could convincingly tie in the phrase, "Brazillions of dollars."

  • SynthesisSynthesis Honda Today! Registered User regular
    It's hard to fuck up gold coin, especially one that is worth only the metal it contains. Intentionally or otherwise.

    Now, piece of paper with QR tags and holograms and stickers, that's easier to fuck up.

  • bowenbowen How you doin'? Registered User regular
    edited March 2013
    The only reason gold has a worth is because it's a good metal for superconductors, and other uses.

    If it wasn't, it'd be useless. It is pretty, I guess. But gold has a perceived value, and that's why commodities tank in value occasionally (and why investing in them is stupid) and why commodity currencies are also shitty.

    Bitcoin is similar to the USD (fiat currency), but, without a whole government protecting it. So basically, "fuck you bitches" when shit goes wrong, and it does go wrong. Fiat currency only has value based on perceived value of the currency. It's artificially linked to a processing algorithm to fight inflation.

    I guess you could say commodity currency is pretty similar to fiat currency, in that if the thing it's tied to drops in demand, so does your currency. So if we invented a material better than gold, gold would tank, and so would our money.

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • Donovan PuppyfuckerDonovan Puppyfucker A dagger in the dark is worth a thousand swords in the morningRegistered User regular
    bowen wrote: »
    The only reason gold has a worth is because it's a good metal for superconductors, and other uses.

    If it wasn't, it'd be useless. It is pretty, I guess. But gold has a perceived value, and that's why commodities tank in value occasionally (and why investing in them is stupid) and why commodity currencies are also shitty.

    Bitcoin is similar to the USD (fiat currency), but, without a whole government protecting it. So basically, "fuck you bitches" when shit goes wrong, and it does go wrong. Fiat currency only has value based on perceived value of the currency. It's artificially linked to a processing algorithm to fight inflation.

    I guess you could say commodity currency is pretty similar to fiat currency, in that if the thing it's tied to drops in demand, so does your currency. So if we invented a material better than gold, gold would tank, and so would our money.

    Gold was valuable long before electricity was discovered, nevermind controlled...

  • bowenbowen How you doin'? Registered User regular
    It made pretty jewelry, and only the wealthy had it. Now-a-days it's still common, sure, but if you're rich, why use gold when you can use other rarer metals?

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • electricitylikesmeelectricitylikesme Registered User regular
    bowen wrote: »
    The only reason gold has a worth is because it's a good metal for superconductors, and other uses.

    If it wasn't, it'd be useless. It is pretty, I guess. But gold has a perceived value, and that's why commodities tank in value occasionally (and why investing in them is stupid) and why commodity currencies are also shitty.

    Bitcoin is similar to the USD (fiat currency), but, without a whole government protecting it. So basically, "fuck you bitches" when shit goes wrong, and it does go wrong. Fiat currency only has value based on perceived value of the currency. It's artificially linked to a processing algorithm to fight inflation.

    I guess you could say commodity currency is pretty similar to fiat currency, in that if the thing it's tied to drops in demand, so does your currency. So if we invented a material better than gold, gold would tank, and so would our money.

    Gold was valuable long before electricity was discovered, nevermind controlled...

    Because it was hard to get, and people didn't know what they were looking at. There were ancient tribes which hung up platinum they found on sticks in rivers, hoping it would "mature" into gold. Platinum is at least twice as valuable as gold (and a damn sight more useful scientifically and industrially too).

    But it's all worthless compared to money which is backed by the power and industrial output of a modern nation, which has the principle benefit of being worth the value of that nation and independent of exhaustible resources.

  • DjeetDjeet Registered User regular
    Yeah, I'm no gold bug but gold has value since everybody else values it. I'd say that's a fundamental determinant to value with respect to trade/commerce. It also does not degrade (like silver), and is not subject to artificial monopolies (like gemstones). I could probably organize a transaction with gold being the payment medium, whereas it would be mch harder to do so with another physical medium like palladium or uranium.

    I'm not going to shit all over bitcoins cause I think innovation (even in something like currency) is inherently worthwhile even if it fails. My problem with that image is "A system of capitalism presumes sound money, not fiat money manipulated by a central bank."

    If that's the case then what economic system have we all been operating under our entire lives (assuming most PA'ers were born after the US left the gold standard)? If it's not capitalism then WTF is it?

  • bowenbowen How you doin'? Registered User regular
    edited March 2013
    Bartering through the financial stability of the US (fiat currency). Basically the US guarantees the money's stability through it's economy (and ability to get and give loans).

    That's really watered down, though.

    Gold and bitcoins have value because they have perceived value. But as soon as someone doesn't need it, or it can't be used for anything, boom goes it's value, and boom goes your commodity currency linked to it. Basically a country needs to not pay its bills or cut way back on its spending to make currency devalue. Or print a lot more of it. Just think of fiat currency as a fancy barter system.

    And commodity currency (gold standard) as a barter system where you exchange things of physical value instead of just tokens of "you spent X time, and I paid you for it and acknowledge you can use my goods to buy the goods of someone else."

    bowen on
    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • bowenbowen How you doin'? Registered User regular
    So while the fish hatchery may need computer work, I may not have use for 400 fish. But, the local restaurant might, it's basically taking out that immediate step of me taking the 400 fish to use in another transaction and backing it with government tokens.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • SynthesisSynthesis Honda Today! Registered User regular
    bowen wrote: »
    It made pretty jewelry, and only the wealthy had it. Now-a-days it's still common, sure, but if you're rich, why use gold when you can use other rarer metals?

    For starters, not all rare metals are resistant to corrosion from exposure to air, moisture, and the most common corrosive chemicals. Gold is.

    Which means it tends to last longer in its useful form, which is obviously a very valuable trait. Not enough to warrant a currency though.

  • ArcSynArcSyn Registered User regular
    Ok, I tried Googling this, but got a couple different answers to slightly different questions.

    There are 21 million bitcoins total, it's a finite sum. If I lose my wallet ID, those coins are lost forever. So over time, as people lose their wallets and/or die and don't leave behind a way to discover them to their heirs, that 21 million sum will decrease further and further. What can bitcoin do with that? If we take enough time, and enough coins lost, there may only exist a few million coins. Granted, a lot of that can be dealt with since you can use fractions of coins and those fractions could just get smaller and smaller as necessary, but is that wise? Is that going to be user friendly at all?

    I've looked into bitcoin a few different times over the years, and it was just all gibberish. I would set up a wallet, but it was just indecipherable so I never ended up doing anything with it. Fortunately I don't think I actually have lost any coin in the process.

    4dm3dwuxq302.png
  • SchrodingerSchrodinger Registered User regular
    It's funny how when you talk about infrastructure investment and stimulating the economy, libertarians will accuse you of "broken window" fallacies and liken Keynesian economics to the act of paying people to dig up holes and then undig them.

    But what is the gold standard? It's the act of paying people to dig up holes (for mining gold) and to bury it again (in heavily secured vaults where it can't be used). It's essentially the same thing.

    Then you get to the bitcoin. The entire idea of the bitcoin is that you compensate people for wasting vast amounts of computer power on pointless computations with arbitrary levels in difficulty. Except in this case, you're essentially wasting $2 worth of computing power and energy in order to generate $1 in coinage.

    The entire libertarian concept of currency is built on a broken window fallacy. Only instead of spending the money on things like roads and education, they're pretty much just throwing it away.

  • DjeetDjeet Registered User regular
    @bowen Don't think we disagree much, but such a barter system is still capitalism in my eyes (vs feudalism) or perhaps statist mercantilism. Also, gold has basically always had popular appeal as a store of value which is why it remains germane in currency discussions. I don't fuck about with gold cause I'd much rather fuck around with oil if we're talking about commodities, but I respect that it's a player with respect to currency/investing. I sold my lost coin a couple years back when it first hit 1600 cause that's a new front deck for the house.

  • bowenbowen How you doin'? Registered User regular
    To each their own. Hopefully we can agree bitcoin as a currency is laughable. I mean, it works in concept and all that, but the people who keep circlejerking about it replacing any currency are silly.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DjeetDjeet Registered User regular
    I have high hopes for bitcoins or other alternative currency, cause I'm going to need a mechanism to move money around internationally when I embezzle/defraud the company of millions and need to skip the country to a place that has no extradition. If only there were a way to use bitcoins for pragmatic purchases: paying rent/mortgage, paying credit cards, buying groceries or gas, paying the electric/cable bill, etc. A lot of the same issues that are presented when you're trying to buy such with gold really (though I can get a little under spot at any local gun shop, so there's that for gold).

  • bowenbowen How you doin'? Registered User regular
    Pretty useful for those folks in the drug trade world I suppose!

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • EtheaEthea Registered User regular
    It's funny how when you talk about infrastructure investment and stimulating the economy, libertarians will accuse you of "broken window" fallacies and liken Keynesian economics to the act of paying people to dig up holes and then undig them.

    But what is the gold standard? It's the act of paying people to dig up holes (for mining gold) and to bury it again (in heavily secured vaults where it can't be used). It's essentially the same thing.

    Then you get to the bitcoin. The entire idea of the bitcoin is that you compensate people for wasting vast amounts of computer power on pointless computations with arbitrary levels in difficulty. Except in this case, you're essentially wasting $2 worth of computing power and energy in order to generate $1 in coinage.

    The entire libertarian concept of currency is built on a broken window fallacy. Only instead of spending the money on things like roads and education, they're pretty much just throwing it away.

    you forgot that they are burning coal / oil to power the computer to mine bitcoins, which in effect is digging another hole in the ground. Soon enough a PC / GPU won't produce enough bitcoins to offset the electrical costs of running it.

  • Jebus314Jebus314 Registered User regular
    edited March 2013
    What I don't understand is how you can have a currency that isn't backed by anything. Gold is backed by the fact that the gold will (supposedly) always have inherent value. Even after the gold bubble pops, I can still take my gold and sell it to jewelers/electronics people. So while you can inflate it's perceived value, it will (most likely) always have some value. It's extremely unlikely that it would suddenly become worthless. Similarly with US currency, it's backed by the US economy. There is a belief that the US government will always be able to back up it's currency with actual goods/resources produced by the US. Not directly (as in they wouldn't trade you this good for your US currency), but indirectly (as in they will take a cut of the profits from anyone in the US selling the good/resource). So it's again extremely unlikely that the US currency would suddenly become worthless. Bitcoins have nothing to fall back on. Which to me makes it highly unstable, and thus not a good currency. Like, it seems as though it is a fundamental flaw. Can you ever have a purely speculative based currency?

    Jebus314 on
    "The world is a mess, and I just need to rule it" - Dr Horrible
  • bowenbowen How you doin'? Registered User regular
    It's my understanding that bitcoins are some really fleshed out mathematical pyramid scheme. The ones who got in early generated the most wealth, and then, it dies once it reaches a threshold.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • DjeetDjeet Registered User regular
    The perceived value of Bitcoins is the value placed into it by Bitcoin traders. In that sense it's not unlike any other fiat currency. Except fiat currency has central bankers and politicians you can rake over the coals once in awhile.

  • bowenbowen How you doin'? Registered User regular
    That's the fun part.

    not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
  • SchrodingerSchrodinger Registered User regular
    edited March 2013
    Djeet wrote: »
    I have high hopes for bitcoins or other alternative currency, cause I'm going to need a mechanism to move money around internationally when I embezzle/defraud the company of millions and need to skip the country to a place that has no extradition. If only there were a way to use bitcoins for pragmatic purchases: paying rent/mortgage, paying credit cards, buying groceries or gas, paying the electric/cable bill, etc. A lot of the same issues that are presented when you're trying to buy such with gold really (though I can get a little under spot at any local gun shop, so there's that for gold).

    Bitcoins are pretty much the currency for kiddie porn and online drug deals.

    Schrodinger on
  • SchrodingerSchrodinger Registered User regular
    Ethea wrote: »
    It's funny how when you talk about infrastructure investment and stimulating the economy, libertarians will accuse you of "broken window" fallacies and liken Keynesian economics to the act of paying people to dig up holes and then undig them.

    But what is the gold standard? It's the act of paying people to dig up holes (for mining gold) and to bury it again (in heavily secured vaults where it can't be used). It's essentially the same thing.

    Then you get to the bitcoin. The entire idea of the bitcoin is that you compensate people for wasting vast amounts of computer power on pointless computations with arbitrary levels in difficulty. Except in this case, you're essentially wasting $2 worth of computing power and energy in order to generate $1 in coinage.

    The entire libertarian concept of currency is built on a broken window fallacy. Only instead of spending the money on things like roads and education, they're pretty much just throwing it away.

    you forgot that they are burning coal / oil to power the computer to mine bitcoins, which in effect is digging another hole in the ground. Soon enough a PC / GPU won't produce enough bitcoins to offset the electrical costs of running it.

    Most bitcoiners get electricity for "free," and by "free," I mean "from their parents."

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