Explain Bitcoin Please

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Mtnmun

Trad climber
Top of the Mountain Mun
Topic Author's Original Post - Nov 6, 2017 - 01:03pm PT
Please explain Bitcoin to us. I have been researching it today and I need a layman's explanation.
kunlun_shan

Mountain climber
SF, CA
Nov 6, 2017 - 01:09pm PT
Reilly

Mountain climber
The Other Monrovia- CA
Nov 6, 2017 - 01:37pm PT
I direct you to Wikipedia re: Dutch tulip mania.
Bitcoin does have some utility for drug dealers and other money launderers.
Mtnmun

Trad climber
Top of the Mountain Mun
Topic Author's Reply - Nov 6, 2017 - 01:38pm PT
https://www.youtube.com/watch?v=cFj72hrUZt4

Even after watching these two videos I am lost. You seem to make the most sense Reilly.
kunlun_shan

Mountain climber
SF, CA
Nov 6, 2017 - 01:48pm PT
Its the underlying distributed blockchain platform that is going to be widely adopted for a myriad of applications.

https://datafloq.com/read/what-is-the-blockchain-and-why-is-it-so-important/2270
Mtnmun

Trad climber
Top of the Mountain Mun
Topic Author's Reply - Nov 6, 2017 - 01:54pm PT
This I understand and it is life changing. ^^^^^^
Reilly

Mountain climber
The Other Monrovia- CA
Nov 6, 2017 - 02:00pm PT
mun, had a couple of internationally known economists over for dinner Saturday. Ask them about Bitcoin and you’ll get double eye rolls, if they’re feeling polite! In theory Bitcoin looks OK but in reality it has more downside than upside, chief of which is adequate liquidity which is a fundamental, if not most important, attribute of an efficient market. In economic terms efficiency also means openness and fairness.
stevep

Boulder climber
Salt Lake, UT
Nov 6, 2017 - 02:20pm PT
What Reilly said.

Blockchain technology does have legit uses. But at this point, Bitcoin is mostly about people who want to hide transactions, and speculators.
Matt's

climber
Nov 6, 2017 - 02:53pm PT
simple-- its an entity that you can speculate on.

WBraun

climber
Nov 6, 2017 - 02:56pm PT
Bitcoin is an attempt to get away from the criminal world Bankers people like the Federal Reserve in the US.

These criminal Bankers create artificial money (paper) and debt.
Norton

climber
The Wastelands
Nov 6, 2017 - 03:00pm PT
there are people who have made a tremendous amount of money buying bitcoin

the shares are gone through the roof

however, no less than the CEO of Morgan Stanley, Jamie Dimon, recently said that
bitcoin is a bubble because of lack of liquidity, but that is changing, becoming more liquid as more around the world hear of it and use it

go to wiki and put in bitcoin and read about it
Matt's

climber
Nov 6, 2017 - 03:01pm PT
i was climbing at donner summit a few weeks ago-- a climber was telling another climber how they had paid for something in bitcoin, but then felt stupid because the price of bitcoin rose $1000 over the week.

wild fluctuations in value is not a particularly good/useful characteristic of a currency...

i'm inclined to believe matt levine over at bloomberg, who said that "cryptocurrency is about re-learning all of the lessons of modern finance in a sped-up way"

best,
matt
Reilly

Mountain climber
The Other Monrovia- CA
Nov 6, 2017 - 03:03pm PT
Norton, wrong. I read that only 21 million bitcoins can be ‘made’.
That is not liquidity. Do correct me if I’m wrong. ;-)
Sula

Trad climber
Pennsylvania
Nov 6, 2017 - 04:00pm PT
Norton posted:
the shares are gone through the roof

Note that the bitcoins themselves are the only "shares".
ruppell

climber
Nov 6, 2017 - 04:27pm PT
Reilly

Only 21 Million BC will ever be produced. The whole concept is to stop monetary inflation. Once 21M coins are produced mining stops and that's a fixed point. Unlike the Fed printing money whenever the need arises. In theory I like bitcoin. Whether it makes it as a common currency remains to be seen. I'm still kicking myself in the ass for not getting a few when they where at 1000ish a coin though.
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 04:34pm PT
Bitcoin is an attempt to get away from the criminal world Bankers people like the Federal Reserve in the US.

These criminal Bankers create artificial money (paper) and debt.

Bitcoin is a money laundering system and ultimately a ponzi scheme. Paying for a cup of coffee is one thing but if any of you transact large volumes using it you are basically letting your laundry fly in the wind... money laundering that is.

You pretty much need to be a crook to use it.

So Werner's comments above made me LOL. Maybe his crooks are better than my crooks.

DMT
Winemaker

Sport climber
Yakima, WA
Nov 6, 2017 - 04:56pm PT
And of course, once your bitcoins are stolen you have no recourse 'cause there's no bank, no nothing.

https://www.cryptocoinsnews.com/kaspersky-lab-discovers-new-malware-that-stole-140000-worth-of-bitcoin/

Then there was the failure of the bitcoin site Mt. Gox where 800,000 bitcoins, worth something like $400 million at the time, vanished.

https://www.theverge.com/2017/7/29/16060344/btce-bitcoin-exchange-takedown-mt-gox-theft-law-enforcement

Anonymous 'currency'. Ain't no proof of ownership so you're out of luck.
Norton

climber
The Wastelands
Nov 6, 2017 - 04:58pm PT
Liquidity is not necessarily defined as the finite number of shares

when talking about trading, or bubbles, it is the volume of buyers and sellers that make a market

while there is a finite number of bit coins, now, price is largely determined by the ease, the liquidity that facilitates sales and price
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 04:58pm PT
where 800,000 bitcoins worth something like $400 million vanished.

Supposedly.

Supposedly there were 800,000 bitcoins.

And supposedly they were worth, however briefly in time, $400m.

Supposedly.

There is simply no way to tell, no governing authority, no rules at all, other than the Prime Directive"

Caveat Emptor

DMT
nah000

climber
now/here
Nov 6, 2017 - 05:37pm PT
a few points:

re: tulipmania... as i understand it, the most recent theory based on direct archival research, of which i have admittedly not read from the horse's mouth here, says most of our common ideas of what happened during that time is a convenient but almost completely exaggerated myth.

re: liquidity... two points. 1. yes, it's an emergent mode of exchange so if you're looking to move your billions of u.s. dollars around, it is going to be tricky selling off that much in bitcoin. not because you can't sell it, but because relative to the market cap [currently at about 120 billion u.s. dollars] you are likely going to significantly push the price around with a sell off of that size. as of the last 24 hours the total volume of bitcoin to u.s. dollars moved around on just the largest exchange was about $1.6 billion worth. in total over the last 24 hours over $2 billion worth in u.s. dollars was moved around. to put this in perspective, just one year ago the total traded volume in 24 hours averaged in the low tens of millions of u.s. bucks... ie. Q: is it possible that bitcoin's use could become widespread enough in the near future that it'd become stable for billions of dollars to be pushed around without significantly affecting the sell price? A: it is certainly possible even at the same time that it is certainly not certain that this will happen... :) in short: for we plebs [or at least, those with less than a million dollars of u.s. cash to move around] liquidity is, in the most direct definition, currently not an issue.
2. Reilly are you seriously arguing liquidity has anything to do with "how many bitcoins there are"? cause if you are, as you seem to be to me, then no, you're mistaken on this point. [as others have pointed out while i was typing,] yes, there is a cap in the number of bitcoins. but that is kind of the whole point of bitcoin [ie. . it is a mode of exchange that by definition has a capped number of units of exchange] if/as this mode of exchange [bitcoin] becomes more in demand relative to other modes of exchange [the u.s. dollar for example], bitcoin's value will rise relative to the u.s. dollar [as it has done for the eight years that it has been in existence]. and in that way you just start moving smaller amounts of bitcoin around to move the same amount of say u.s. dollars around. ie. once upon a time it cost hundreds of bitcoin to buy a pizza, whereas currently it'd cost a hundredth of a bitcoin to buy a pizza. from the way i conceive of it, liquidity has to do with a. the ability to exchange an amount at will combined with b. price stability. with regards to the former a., as discussed in point one it depends on the size of the amount being moved: with no issue for the multithousandaires, or even millionaires in the room. with regards to the latter [b. price stability] bitcoin, as an emergent and still relatively small market is not by any definition stable. that said it has continued to become more stable over time. so as far as is bitcoin liquid? it depends on what "is" is.

re: an attempt at a plain english explanation of bitcoin. 1. bitcoin is a decentralized public ledger. 2. the recording of exchanges made on that public ledger are backed up by impossibly large to compute, math based encryption.

re: what, i suspect people are really looking for with regards to a plain english explanation: is bitcoin worth investing in? and this is an, imo, impossible to answer question. that's because at its heart we currently live in a world based in violence. as i understand braun to be alluding to, the idea that the current u.s. petrobuck is anything more than a collective hallucination backed up globally by, at its heart, u.s. nukes, is imesho, simply pleasant myth. as a fiat currency for the last 46 years, whose creation is both out of thin air and in the hands of private interests, to think the u.s. buck will be sacrosanct for ever and ever amen, is to not pay attention to history. will bitcoin be a/the replacement? it's impossible to know. at this point, the nukes back up the u.s. buck so i wouldn't bet on it being replaced anyday soon. but that's an end game answer. in the more short term, with regards to bitcoin as just an investment? again hard to say. because of the chaotic [by scientific definitions] interface between traditional currencies, governments, etc. it's hard to know exactly what will or won't become of bitcoin. not to mention all of the growing pains that new technology must go through. that said will a blockchain based currency prove useful and the value of its units of exchange continue to grow relative to nationalized fiat currencies? i wouldn't bet against it. i just wouldn't necessarily bet that bitcoin is necessarily going to be the long term winner. although a small bet can't hurt at this point given the last eight years.

re: There is simply no way to tell, no governing authority, no rules at all, other than the Prime Directive. this, in some regards, is true. except it's even more true of the current paper u.s. bucks. the prime directive with fiat paper bucks has, at its heart, always been who controls the making and enforcing of the rules. the prime directive for bitcoin is ultimately a publicly available to read bit of math. we humans are an ogreish bunch though, and so despite our outward niceties, i wouldn't necessarily bet on math, in this case.



as always, this is mostly off the cuff... so if i've made a mistake, please point it out, so i learn as well.
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