I don’t understand cryptocurrency, bitcoin

[The Real timschochet 6,750]

I really don’t understand it at all. I’ve tried to read about it but I don’t understand what I read. Trump used to be against it, now he’s for it; that’s probably transactional, knowing him. I have no idea what the Democrats think. I’ve heard Trump talk about it recently and he called it a “great thing, the Chinese are all over it”. Does he understand it? 
 

I’ve heard investors talk about it but only in terms of can they make money buying shares of it. When that one dude got arrested they made it sound like a big pyramid scheme. But there seems to be a whole lot of people involved, and I assume that some of them are very very smart. I have a banker friend who warns me and everyone to stay away it’s way too volatile. But he’s a very conservative guy (in the general not political sense though I think he’s politically conservative too.) 

So- anyone here can explain this stuff in layman’s terms? For morons like me? Is this going to replace our currency? Is it a scam? What does it all mean? 

[purdygood 351]

It's a gambling/pyramid scheme.  You know how you know it's a gambling/pyramid scheme?  Bitcoin is supposed to "replace real currency".  But how do they value Bitcoin?  In "how many Actual Dollars it is worth."

 

its basically Beanie Babies and Pokemon cards for people who think they are "investors"

[The Real timschochet 6,750]

Here’s an explanation of Bitcoin on Wiki: 

https://en.m.wikipedia.org/wiki/Bitcoin

If you can make sense out of that first paragraph more power to you. I have no clue, it all sounds like gobbledygook.

The second paragraph goes on to say that it’s based on free market ideology. Well I like that; I generally believe in the free market. But then the gobbledygook starts again, and it mentions that it was created by a guy who apparently doesn’t exist? WTF? 

[The Real timschochet 6,750]

3 minutes ago, purdygood said:

It's a gambling/pyramid scheme.  You know how you know it's a gambling/pyramid scheme?  Bitcoin is supposed to "replace real currency".  But how do they value Bitcoin?  In "how many Actual Dollars it is worth."

 

its basically Beanie Babies and Pokemon cards for people who think they are "investors"

OK so let me go back to my old school understanding of economics- the reason that we use dollars as a standard is because the government of the United States guarantees their value as being based on the wealth of the United States: Every dollar, quarter, dime, etc. represents that wealth, by the solemn promise of our government. The dollar can fluctuate in value but never much because the entire world trusts that it won’t, that our production of goods will remain either relatively stable or increase. The rest of the world’s stable currencies are similarly guaranteed by their respective governments. 
 

Thats what I remember learning way back in Econ 101. But this appears to be something new? 

[seafoam1 3,015]

It's kind of like trying to understand the absolute stupidity of the liberal mind. 

How the fock can anyone experience what this country offers in the form of fair and equal constitutional republic yet desire it so badly to turn it into a autocratic liberal run communist shlthole? 

[purdygood 351]

7 minutes ago, The Real timschochet said:

OK so let me go back to my old school understanding of economics- the reason that we use dollars as a standard is because the government of the United States guarantees their value as being based on the wealth of the United States: Every dollar, quarter, dime, etc. represents that wealth, by the solemn promise of our government. The dollar can fluctuate in value but never much because the entire world trusts that it won’t, that our production of goods will remain either relatively stable or increase. The rest of the world’s stable currencies are similarly guaranteed by their respective governments. 
 

Thats what I remember learning way back in Econ 101. But this appears to be something new? 

Yeah. It started as a way to "pay for things outside of that system".  But it's basically a version of the same system on a dream.   Valued based on that same system they were trying to replace.   Then hella crypto versions jumped on board.   Some people pumped and dumped them. Made "actual money".  Hyped it up.  And idiots kept buying.  Rinse and repeat. You cant actually buy anything with crypto currency unless you find someone dumb enough to barter you for it.  Or you cash it out for actual normal cash. Which again. Why not just use your actual cash? Unless youre gambling that your "bitcoins" will go up in value if more people "buy in" to the fantasy. 

[purdygood 351]

9 minutes ago, seafoam1 said:

It's kind of like trying to understand the absolute stupidity of the liberal mind. 

How the fock can anyone experience what this country offers in the form of fair and equal constitutional republic yet desire it so badly to turn it into a autocratic liberal run communist shlthole? 

Again. I could repeat this word for word and substitute conservative every time you say liberal.    How about stop trying to put people into 2 buckets and talk to them as a free thinking autonomous person? 

[MLCKAA 573]

Mining what from where?  Zeros and ones from a bottomless digital ocean of zeros and ones?

[seafoam1 3,015]

2 minutes ago, purdygood said:

Again. I could repeat this word for word and substitute conservative every time you say liberal.    How about stop trying to put people into 2 buckets and talk to them as a free thinking autonomous person? 

And you would be wrong. I'm not wrong. There's your difference. 

[Strike 5,532]

Cool.  We can add another topic to the list of things Tim has no clue about.  Yay.

[The Real timschochet 6,750]

Just now, Strike said:

Cool.  We can add another topic to the list of things Tim has no clue about.  Yay.

1. Do you understand it? 
2. Are you ready to apologize for calling me a welcher yesterday? 

[IGotWorms 4,058]

It’s for scammers and criminals. You can make it more complicated than that but isn’t really necessary

[Cloaca du jour 2,149]

41 minutes ago, The Real timschochet said:

I really don’t understand it at all. I’ve tried to read about it but I don’t understand what I read. Trump used to be against it, now he’s for it; that’s probably transactional, knowing him. I have no idea what the Democrats think. I’ve heard Trump talk about it recently and he called it a “great thing, the Chinese are all over it”. Does he understand it? 
 

I’ve heard investors talk about it but only in terms of can they make money buying shares of it. When that one dude got arrested they made it sound like a big pyramid scheme. But there seems to be a whole lot of people involved, and I assume that some of them are very very smart. I have a banker friend who warns me and everyone to stay away it’s way too volatile. But he’s a very conservative guy (in the general not political sense though I think he’s politically conservative too.) 

So- anyone here can explain this stuff in layman’s terms? For morons like me? Is this going to replace our currency? Is it a scam? What does it all mean? 

Politics is a big one for you also.

[Strike 5,532]

Just now, The Real timschochet said:

1. Do you understand it? 
2. Are you ready to apologize for calling me a welcher yesterday? 

1)  Yes.  I work in Tech.  I'm not a crypto fan but I understand how it works and why some people are fans.  I am not.

2)  No.  You haven't paid everyone.  And you pretty much made friendly betting on this site no fun any more due to your idiotic attempt to get people to pay early on a bet that you ultimately lost.  And while EG was gracious enough to let you off of paying him, he SHOULD have gotten paid and would have had you not been such a d*ck about it.  The fact that you're being such a d*ck about paying everyone, as evidenced by how much you had to pushed to send your payment to charity yesterday for ONE of those people, is disgusting to me. 

[The Real timschochet 6,750]

10 minutes ago, Strike said:

 

2)  No.  You haven't paid everyone.  And you pretty much made friendly betting on this site no fun any more due to your idiotic attempt to get people to pay early on a bet that you ultimately lost.  And while EG was gracious enough to let you off of paying him, he SHOULD have gotten paid and would have had you not been such a d*ck about it.  The fact that you're being such a d*ck about paying everyone, as evidenced by how much you had to pushed to send your payment to charity yesterday for ONE of those people, is disgusting to me. 

Wow. You really have no idea how awful you sound do you? Yes I believe that after yesterday everyone has been paid. Yes if @Engorgeous George had wanted to be paid I would have done so immediately; I offered it to him on 3 separate occasions. Yes I resisted paying to a charity instead of the person in question because charities want all your info and bug you endlessly after you make one contribution. But ultimately I did it when the guy insisted. And that disgusts you?? How in the fock is any of this your business? You could have bet me too, I challenged you and you ran away like the pu$$y you are, just like your man Donald always runs away. You don’t disgust me, but that’s because I don’t think enough about you to register that kind of emotion. I certainly haven’t spent years following you from thread to thread, obsessing enough to read your old posts, trying to find “gotchas” along the way. You’re way too pathetic to be disgusting. 

[Strike 5,532]

1 minute ago, The Real timschochet said:

Wow. You really have no idea how awful you sound do you? Yes I believe that after yesterday everyone has been paid. Yes if @Engorgeous George had wanted to be paid I would have done so immediately; I offered it to him on 3 separate occasions. Yes I resisted paying to a charity instead of the person in question because charities want all your info and bug you endlessly after you make one contribution. But ultimately I did it when the guy insisted. And that disgusts you?? How in the fock is any of this your business? You could have bet me too, I challenged you and you ran away like the pu$$y you are, just like your man Donald always runs away. You don’t disgust me, but that’s because I don’t think enough about you to register that kind of emotion. I certainly haven’t spent years following you from thread to thread, obsessing enough to read your own posts, trying to find “gotchas” along the way. You’re way too pathetic to be disgusting. 

This is a lie.  I contribute to multiple charities all the time and they always have a check box on whether they should "bug" you.  Quit making excuses.

I've offered to bet you a bunch of times and EVERY TIME you refused.  So go fock yourself.  And I'd never bet you money because, as the person yesterday said, I would never want you to have my personal information. 

[The Real timschochet 6,750]

Just now, Strike said:

This is a lie.  I contribute to multiple charities all the time and they always have a check box on whether they should "bug" you.  Quit making excuses.

Yeah I check that box too. They still bug me. Also I don’t believe you contribute to multiple charities. You don’t seem like the type. 

[peenie 1,915]

Imo, it’s gambling and also a way for criminals to launder and transfer money. 

[Strike 5,532]

3 minutes ago, The Real timschochet said:

Yeah I check that box too. They still bug me. Also I don’t believe you contribute to multiple charities. You don’t seem like the type. 

As usual you're wrong again.   Here's a thread I started about a charity I found out about last year and donated to:

I guess I could have just been making it up knowing you'd question my charitable contributions 9 months later.  I am  that smart.  But I didn't.   That is just one of several I donate to.  Don't forget, us on the more conservative side of the equation are known to donate more to charity than people such as yourself. 

[The Real timschochet 6,750]

1 minute ago, Strike said:

As usual you're wrong again.   Here's a thread I started about a charity I found out about last year and donated to:

I guess I could have just been making it up knowing you'd question my charitable contributions 9 months later.  I am  that smart.  But I didn't.   That is just one of several I donate to.  Don't forget, us on the more conservative side of the equation are known to donate more to charity than people such as yourself. 

Oh conservatives donate plenty of money. You just didn’t seem like the type. But good for you for having done so. Looks like I am sometimes as wrong about you as you almost always are about me. 

[listen2me 23 1,873]

I dont underatand crypto.....right into politics.  

One of many hacks.  

Mm throw in some girly drama.  

Lol this place blows.  

[nobody 2,667]

Cryptocurrency is really just the medium of exchange used on a specific cryptographic block chain.  

Bitcoin for instance uses the Bitcoin blockchain as a means to exchange funds.  Now if the Bitcoin blockchain were able to process transactions faster and cheaper than let's say credit cards, then the natural outcome would be that most transactions would be done in Bitcoin.

So the value of a specific cryptocurrency is correlated to the underlying value of the Blockchain on which it operates... And of course the usual factors such as supply and demand of a particular token.

[nobody 2,667]

1 hour ago, The Real timschochet said:

Here’s an explanation of Bitcoin on Wiki: 

https://en.m.wikipedia.org/wiki/Bitcoin

If you can make sense out of that first paragraph more power to you. I have no clue, it all sounds like gobbledygook.

The second paragraph goes on to say that it’s based on free market ideology. Well I like that; I generally believe in the free market. But then the gobbledygook starts again, and it mentions that it was created by a guy who apparently doesn’t exist? WTF? 

That article kind of sucks, but I'll try to explain it.

"Bitcoin (abbreviation: BTC; sign: ₿) is the first decentralized cryptocurrency."

Two key things here.  Cryptocurrency and decentralized.  Cryptocurrency simply refers to a digital token that is used on a specific network that is governed by some sort of cryptographic algorithm.  Decentralized is important here because that is one of the things kids love about cryptocurrency.  There is a belief that the government manipulates currency through things like inflation in order to keep them poor.  I'd argue that we're trading one governing body for another since the mining conglomerates are going to basically set economic policy at some point.

"Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight."

It's just saying that individual users of the network process transactions and the transactions are recorded forever on the Blockchain.  That doesn't mean they have your name and address or anything just that x amount went from one wallet address to another.  

"Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that guarantees the security of the bitcoin blockchain." 

They're trying to say how they validate a transaction is legit.  And that is done when the individual computers (miners or nodes) solve cryptographic problems and those are confirmed by other independent computers.  Proof of work is an important concept in Bitcoin and would require it's own treatment, but the gist is a computer (or miner or node) proves that they solved the cryptographic problem allowing the transaction to be added to the never ending public ledger and then they get rewarded for it.  It essentially is how transactions are processed.  It's also a major drawback to Bitcoin in some ways since it's slow and energy intensive.  The time to do these problems are partially why companies like AMD and NVDA have been blowing up for the last few years.  They have the most powerful processors and the most powerful processors get the answer faster which gets the reward.  The energy thing is why you hear about mining farms sprouting up around cheap energy.

Other cryptos use different proof methods like etherium which uses proof of stake.

[The Real timschochet 6,750]

3 minutes ago, nobody said:

That article kind of sucks, but I'll try to explain it.

"Bitcoin (abbreviation: BTC; sign: ₿) is the first decentralized cryptocurrency."

Two key things here.  Cryptocurrency and decentralized.  Cryptocurrency simply refers to a digital token that is used on a specific network that is governed by some sort of cryptographic algorithm.  Decentralized is important here because that is one of the things kids love about cryptocurrency.  There is a belief that the government manipulates currency through things like inflation in order to keep them poor.  I'd argue that we're trading one governing body for another since the mining conglomerates are going to basically set economic policy at some point.

"Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight."

It's just saying that individual users of the network process transactions and the transactions are recorded forever on the Blockchain.  That doesn't mean they have your name and address or anything just that x amount went from one wallet address to another.  

"Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that guarantees the security of the bitcoin blockchain." 

They're trying to say how they validate a transaction is legit.  And that is done when the individual computers (miners or nodes) solve cryptographic problems and those are confirmed by other independent computers.  Proof of work is an important concept in Bitcoin and would require it's own treatment, but the gist is a computer (or miner or node) proves that they solved the cryptographic problem allowing the transaction to be added to the never ending public ledger and then they get rewarded for it.  It essentially is how transactions are processed.  It's also a major drawback to Bitcoin in some ways since it's slow and energy intensive.  The time to do these problems are partially why companies like AMD and NVDA have been blowing up for the last few years.  They have the most powerful processors and the most powerful processors get the answer faster which gets the reward.  The energy thing is why you hear about mining farms sprouting up around cheap energy.

Other cryptos use different proof methods like etherium which uses proof of stake.

I appreciate the explanation. I’m still pretty confused but you make things a little more clear. 

[easilyscan 924]

Is part of the attraction to crypto the fact that it maintains (0r appreciates) in value vs conventional currency like the US dollar ?

I'm not referring to currency printed in silver, paper dollars, or crypto as an investment, only how much they gain/lose in value over time, due to inflation, dilution, etc.

Someone posted an interesting comparison between silver coins the US used to mint as currency, & paper money/currency.

Gasoline was $.27 a gallon in 1950, & the average gas tank held 10 gallons.
You could fill up for $2.70. 
Franklin 1/2 dollars were minted from 1948 to 1963.
You could've paid with 6 of those, or 3 one dollar bills & you’d receive change of $.30 

Even in well circulated condition, those franklins are worth $12 today, meaning 6 of them = $72

https://www.ebay.com/itm/156331860513?itmmeta=01J4FM3Y9NHWJT6BM46DMV2JT0&hash=item24661ae221:g:~A0AAOSwQY5mqtL4&itmprp=enc%3AAQAJAAAA8KJeugUqkx2FJa0HqPkNbGX4kVDhex2W24ArLxlLxguKmGxxfNVbgZQrQeFqOf3rfaEUG9Kp4Jpj9FGkpt%2B8QEvRYtq--YoNMelrXzRKtZMDX05AG%2BNEO144kv5IaWj2zkvqfFyGqMUXV4PENfdKZ4phVX4om10splKOaO1LF7KDMreMiOEQe5NqlV47pHL0%2FXO8HqIEdOl25M6Fx8Xm3zxTajReIkGCU9jEt%2BOY%2BWAMhW%2FE9IU2F7oR7jWUVFoXeGS7LNhyEd8S8em9COrXPZDySavkVfxScOl%2FKQyJx91rqCi1%2BH%2BVYd8a0U%2Fqj4JLUw%3D%3D|tkp%3ABk9SR4Tlj_SjZA

The 3 $1 bills are still only worth $3. 

Gasoline is around $4 dollars today so $40 to fill up a car with a 10 gallon tank.
Pay with the six 50 cent pieces &, you'd have $32 in change. 
Pay with the three $1 bills, & you'd be $37 short. 

 

 

 

 

 

[nobody 2,667]

People do cite Bitcoin's potential as a hedge against inflation, but so far, it hasn't behaved as a hedge against inflation.  It's behaved more like a speculative tech stock.

[easilyscan 924]

7 minutes ago, nobody said:

People do cite Bitcoin's potential as a hedge against inflation, but so far, it hasn't behaved as a hedge against inflation.  It's behaved more like a speculative tech stock.

Your explanation 3 or 4 posts above, was the best I've seen.

In spite of that, I still don't have a great understanding of how it's used, or how to value it as an investment.

As for investing in it, I purchased 12 shares of MicroStrategy @ $714.30 on February 15, 2024 

Less than a month later, on March 6, it had reached $1250.00, so I sold 7 of the 12 shares, which was enough to recoup my original investment, plus a couple hundred dollars.

In spite of not understanding it, I'm going to let the remaining 5 shares ride, just in case it ever reaches the astronomical levels ($200,000+) some have predicted. 

[Cdub100 3,903]

[purdygood 351]

4 hours ago, nobody said:

People do cite Bitcoin's potential as a hedge against inflation, but so far, it hasn't behaved as a hedge against inflation.  It's behaved more like a speculative tech stock.

 They pretend like its a non correlated investment.  But its not.  Its a scam. 

[easilyscan 924]

44 minutes ago, Cdub100 said:

Was that intended for something in my post ?

If so, I'd be interested to know what it was. 

[IGotWorms 4,058]

10 minutes ago, easilyscan said:

Was that intended for something in my post ?

If so, I'd be interested to know what it was. 

CDub can’t believe someone doesn’t know about crypto because a Jew stole all of his 

[Cdub100 3,903]

12 minutes ago, IGotWorms said:

CDub can’t believe someone doesn’t know about crypto because a Jew stole all of his 

The Jew stole 70% and will soon be in jail for it. 

[TimHauck 2,850]

16 hours ago, IGotWorms said:

It’s for scammers and criminals. You can make it more complicated than that but isn’t really necessary

Pretty much this, although I’d add speculators as well.  And even many crypto fans think most or maybe all of the ones except Bitcoin are scams.

One reason people like bitcoin as an actual currency is because all transactions are tracked, but it’s also anonymous (which is of course why criminals like it).

[Cdub100 3,903]

 

[The Real timschochet 6,750]

Just now, Cdub100 said:

 

It certainly does help to sway my opinion when a lot of people I respect around here call the whole thing a scam and then it turns out that you’re a serious investor. It’s quite reasonable to me to assume that almost anything you come out in favor of I’m probably opposed to. 

But I’m still having trouble making sense of it all. 

[Cdub100 3,903]

1 hour ago, The Real timschochet said:

It certainly does help to sway my opinion when a lot of people I respect around here call the whole thing a scam and then it turns out that you’re a serious investor. It’s quite reasonable to me to assume that almost anything you come out in favor of I’m probably opposed to. 

But I’m still having trouble making sense of it all. 

Good.

[HellToupee 1,772]

CIA long con

[TimHauck 2,850]

@Cdub100, do you think crypto should be regulated?

[supermike80 1,904]

I just watched "bitconned" on netflix.  An their final text was eye opening.  I forget the exact dollars invested, but it was in the billions.  And they said it is estimated that 76% of bitcoin ICO's and other entities are scams.   Wow.

[Cdub100 3,903]

On 8/5/2024 at 1:54 PM, TimHauck said:

@Cdub100, do you think crypto should be regulated?

When you say Crypto what do you mean? My answer changes depending on what you're talking about.