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Teallaura
01-26-2015, 02:01 PM
I don't think I get this - anyone care to explain the basics or just post a link that does? I'd appreciate the help! :smile:

Truthseeker
01-26-2015, 02:47 PM
I think we should start with an economy that does not use money. All trading is done by bartering. A typical trade would involve Teal and Red. Say Teal has a bushel of apples. Red has some cheese. It so happens that Teal feels like having some of the cheese even if she gives up some of her apples to Red. Lo and behold, Red wants some apples even if he gives up some of the cheese to her.

You follow so far?

Irate Canadian
01-26-2015, 04:07 PM
I think we should start with an economy that does not use money. All trading is done by bartering. A typical trade would involve Teal and Red. Say Teal has a bushel of apples. Red has some cheese. It so happens that Teal feels like having some of the cheese even if she gives up some of her apples to Red. Lo and behold, Red wants some apples even if he gives up some of the cheese to her.

You follow so far?
No.
This does not explain anything about how cryptocurrencies work...
I will do so in a explaination that I will write soon.

Manwë Súlimo
01-26-2015, 04:07 PM
....everyone knows what bartering is, you patronizing git.

Irate Canadian
01-26-2015, 04:21 PM
The idea of having digital money on the internet has floated around for around a good 10 years before it got a proper implementation. This first implementation was called Bitcoin. It was developed by an anyonymous person who took the name Satoshi Nakamoto. He developed the main software for trading and creating this currency. Cryptocurriences are created through a process called Mining. Mining is a process that involves your computer calculating hard equations. The difficulty level of these questions scaled as more miners joined. All transactions are recorded in a public ledger called the Blockchain. Instead of having a account system, you have an address system. Want to transfer money without someone looking at your main address, just make a new one. When you make a transaction, a small amount is subtracted out to make it a legitimate transfer. Due to its anonymity level being quite high, many criminals started using it, which hurt Bitcoin's reputation quite a bit. However, more and more sites begin to accept these currencies as valid, and IIRC the U.S goverment has made it a taxable "investment". Since the Bitcoin source code is open source, it has allowed other coins to join the crypocurrency movement. Some of these make the code more secure, or make the mining process easier for computers. Some (other) popular coins are : Dogecoin( named after a meme), Litecoin, and Feathercoin.

Irate Canadian
01-26-2015, 04:22 PM
....everyone knows what bartering is, you patronizing git.
It's still fiat currency to me... I don't see how that's bartering.

lilpixieofterror
01-26-2015, 04:30 PM
....everyone knows what bartering is, you patronizing git.

Besides, bartering will not work, on a large scale anyway.

Jedidiah
01-26-2015, 04:47 PM
Digital currency is superior because it puts the money where others can control it. Others being government.

Raphael
01-26-2015, 04:49 PM
The idea of having digital money on the internet has floated around for around a good 10 years before it got a proper implementation. This first implementation was called Bitcoin. It was developed by an anyonymous person who took the name Satoshi Nakamoto. He developed the main software for trading and creating this currency. Cryptocurriences are created through a process called Mining. Mining is a process that involves your computer calculating hard equations. The difficulty level of these questions scaled as more miners joined. All transactions are recorded in a public ledger called the Blockchain. Instead of having a account system, you have an address system. Want to transfer money without someone looking at your main address, just make a new one. When you make a transaction, a small amount is subtracted out to make it a legitimate transfer. Due to its anonymity level being quite high, many criminals started using it, which hurt Bitcoin's reputation quite a bit. However, more and more sites begin to accept these currencies as valid, and IIRC the U.S goverment has made it a taxable "investment". Since the Bitcoin source code is open source, it has allowed other coins to join the crypocurrency movement. Some of these make the code more secure, or make the mining process easier for computers. Some (other) popular coins are : Dogecoin( named after a meme), Litecoin, and Feathercoin.

adding to the fact that at the current exchange rate, mining for bit coins isn't really economically viable right now (i.e. the electricity used to do the mining costs more than the bitcoins are worth)

Truthseeker
01-26-2015, 04:56 PM
....everyone knows what bartering is, you patronizing git.I thought I should start with the basics. That was meant to lead up to an answer to the question of why do we use money so often.

Truthseeker
01-26-2015, 04:57 PM
Besides, bartering will not work, on a large scale anyway.Yes; I am trying to explain why we use money so often.

Chrawnus
01-26-2015, 04:57 PM
I thought I should start with the basics. That was meant to lead up to an answer to the question of why do we use money so often.

:doh:

Truthseeker
01-26-2015, 05:01 PM
The idea of having digital money on the internet has floated around for around a good 10 years before it got a proper implementation. This first implementation was called Bitcoin. It was developed by an anyonymous person who took the name Satoshi Nakamoto. He developed the main software for trading and creating this currency. Cryptocurriences are created through a process called Mining. Mining is a process that involves your computer calculating hard equations. The difficulty level of these questions scaled as more miners joined. All transactions are recorded in a public ledger called the Blockchain. Instead of having a account system, you have an address system. Want to transfer money without someone looking at your main address, just make a new one. When you make a transaction, a small amount is subtracted out to make it a legitimate transfer. Due to its anonymity level being quite high, many criminals started using it, which hurt Bitcoin's reputation quite a bit. However, more and more sites begin to accept these currencies as valid, and IIRC the U.S goverment has made it a taxable "investment". Since the Bitcoin source code is open source, it has allowed other coins to join the crypocurrency movement. Some of these make the code more secure, or make the mining process easier for computers. Some (other) popular coins are : Dogecoin( named after a meme), Litecoin, and Feathercoin.I don't see that you have answered the question of why we use money so often and what exactly is money (or, how to define it). Also, the trade (with or without money) is a basic event of economics.

Raphael
01-26-2015, 05:08 PM
I don't see that you have answered the question of why we use money so often and what exactly is money (or, how to define it). Also, the trade (with or without money) is a basic event of economics.

That wasn't the question. Teal was wanting to know about cryptocurrencies (which she called digital currency). having lived on this planet for a reasonable length of time, she already knows what money is and why we use it so often.

Chrawnus
01-26-2015, 05:09 PM
I don't see that you have answered the question of why we use money so often and what exactly is money (or, how to define it). Also, the trade (with or without money) is a basic event of economics.

:doh::doh::doh::doh::doh::doh::doh::doh::doh::doh: :doh::doh::doh::doh::doh::doh::doh::doh::doh::doh: :doh::doh::doh::doh::doh::doh::doh::doh::doh::doh: :doh::doh::doh::doh::doh::doh::doh::doh::doh::doh: :doh::doh::doh::doh::doh:

Truthseeker
01-26-2015, 05:10 PM
:doh:So, you do know what money is? Define it, please. There is a debate going on (at least, recently) that digital money is not really money. Should I ignore it?

lilpixieofterror
01-26-2015, 05:10 PM
Yes; I am trying to explain why we use money so often.

I'm pretty sure Teal knows why we use money. She was asking about digital currency and how it works.

Truthseeker
01-26-2015, 05:11 PM
That wasn't the question. Teal was wanting to know about cryptocurrencies (which she called digital currency). having lived on this planet for a reasonable length of time, she already knows what money is and why we use it so often.You see that I am doing wrong with trying to lay a foundation for my lectures. OK.

Chrawnus
01-26-2015, 05:12 PM
So, you do know what money is? Define it, please. There is a debate going on (at least, recently) that digital money is not really money. Should I ignore it?

Yes, I can define money. It's what my employer transfers into my bank account at the beginning of each month. :smug:

Truthseeker
01-26-2015, 05:13 PM
I am sorry I seemed to regard you as naifs. But try to define money!

Sam
01-26-2015, 06:11 PM
I don't think I get this - anyone care to explain the basics or just post a link that does? I'd appreciate the help! :smile:

The fundamental draws, from my understanding is:

1) Inflation — crypto-currency like Bitcoin is theoretically immune to inflation (like digital gold or something). Whether or not this is a draw depends on whether you think inflation is necessarily a bad thing. I believe that the vast majority of economists do not regard inflation as necessarily bad (most think it's a necessary good).

2) Decentralization/Free — since the "ledger" of Bitcoin, at least, is computed democratically (transaction verification happens on a bunch of computers "mining" at the same time), there's no bank to extract a fee. So if a crypto-currency was stable, you could avoid paying that 3%-5% transaction fee when you send a payment through Visa, Mastercard, Paypal, etc. In developing countries and international transfers, where transaction fees can be significant, I believe this has made Bitcoin more practical (and more popular) than in the USA.

3) Obscure Transactions — Even though crypto-currency transactions can be traced by interested parties (like governments), it's a harder than just getting a warrant for your Visa bill. Sites like Silk Road used Bitcoin to make it harder for the government to trace sales of contraband and illegal services.

I think I read a couple more features of crypto-currencies that advocates use for support but they are eluding me now. How crypto-currency works, in terms of function, is pretty simple:


http://youtu.be/l9jOJk30eQs


Crypto-currency, as a currency, is probably doomed to failure. But the technology behind the currency is probably very important for future financial systems in a globalized economy.

—Sam

Irate Canadian
01-26-2015, 06:42 PM
The fundamental draws, from my understanding is:

1) Inflation — crypto-currency like Bitcoin is theoretically immune to inflation (like digital gold or something). Whether or not this is a draw depends on whether you think inflation is necessarily a bad thing. I believe that the vast majority of economists do not regard inflation as necessarily bad (most think it's a necessary good).

2) Decentralization/Free — since the "ledger" of Bitcoin, at least, is computed democratically (transaction verification happens on a bunch of computers "mining" at the same time), there's no bank to extract a fee. So if a crypto-currency was stable, you could avoid paying that 3%-5% transaction fee when you send a payment through Visa, Mastercard, Paypal, etc. In developing countries and international transfers, where transaction fees can be significant, I believe this has made Bitcoin more practical (and more popular) than in the USA.

3) Obscure Transactions — Even though crypto-currency transactions can be traced by interested parties (like governments), it's a harder than just getting a warrant for your Visa bill. Sites like Silk Road used Bitcoin to make it harder for the government to trace sales of contraband and illegal services.

I think I read a couple more features of crypto-currencies that advocates use for support but they are eluding me now. How crypto-currency works, in terms of function, is pretty simple:


http://youtu.be/l9jOJk30eQs


Crypto-currency, as a currency, is probably doomed to failure. But the technology behind the currency is probably very important for future financial systems in a globalized economy.

—Sam

Can't really see this kind of stuff finacially used, however the blockchain could be used for much more useful things.

Teallaura
01-26-2015, 07:12 PM
The idea of having digital money on the internet has floated around for around a good 10 years before it got a proper implementation. This first implementation was called Bitcoin. It was developed by an anyonymous person who took the name Satoshi Nakamoto. He developed the main software for trading and creating this currency. Cryptocurriences are created through a process called Mining. Mining is a process that involves your computer calculating hard equations. The difficulty level of these questions scaled as more miners joined. All transactions are recorded in a public ledger called the Blockchain. Instead of having a account system, you have an address system. Want to transfer money without someone looking at your main address, just make a new one. When you make a transaction, a small amount is subtracted out to make it a legitimate transfer. Due to its anonymity level being quite high, many criminals started using it, which hurt Bitcoin's reputation quite a bit. However, more and more sites begin to accept these currencies as valid, and IIRC the U.S goverment has made it a taxable "investment". Since the Bitcoin source code is open source, it has allowed other coins to join the crypocurrency movement. Some of these make the code more secure, or make the mining process easier for computers. Some (other) popular coins are : Dogecoin( named after a meme), Litecoin, and Feathercoin.


adding to the fact that at the current exchange rate, mining for bit coins isn't really economically viable right now (i.e. the electricity used to do the mining costs more than the bitcoins are worth)


Um, the mining is the part that makes no sense to me. What is it, exactly and why does it create currency or value? :huh:

Teallaura
01-26-2015, 07:17 PM
The fundamental draws, from my understanding is:

1) Inflation — crypto-currency like Bitcoin is theoretically immune to inflation (like digital gold or something). Whether or not this is a draw depends on whether you think inflation is necessarily a bad thing. I believe that the vast majority of economists do not regard inflation as necessarily bad (most think it's a necessary good).

2) Decentralization/Free — since the "ledger" of Bitcoin, at least, is computed democratically (transaction verification happens on a bunch of computers "mining" at the same time), there's no bank to extract a fee. So if a crypto-currency was stable, you could avoid paying that 3%-5% transaction fee when you send a payment through Visa, Mastercard, Paypal, etc. In developing countries and international transfers, where transaction fees can be significant, I believe this has made Bitcoin more practical (and more popular) than in the USA.

3) Obscure Transactions — Even though crypto-currency transactions can be traced by interested parties (like governments), it's a harder than just getting a warrant for your Visa bill. Sites like Silk Road used Bitcoin to make it harder for the government to trace sales of contraband and illegal services.

I think I read a couple more features of crypto-currencies that advocates use for support but they are eluding me now. How crypto-currency works, in terms of function, is pretty simple:


http://youtu.be/l9jOJk30eQs


Crypto-currency, as a currency, is probably doomed to failure. But the technology behind the currency is probably very important for future financial systems in a globalized economy.

—Sam

I appreciate the effort but I still don't see what is going on here. I get transactions and what not after the fact but the 'what is it really' is eluding me.

Had the same problem with Wiki. The graphic makes no sense to me at all.

:argh: I passed Econ 101!!!!








ETA:
:doh: Because it's a video... Never mind... I go watch it now...

Sam
01-26-2015, 07:17 PM
Can't really see this kind of stuff finacially used, however the blockchain could be used for much more useful things.

I would say that the technology has great use in the already-existing financial market. Let's say a company decided to compete for Western Union's market share using a network similar to Bitcoin — whereas Western Union charges a 8%-15% fee (I think ... it's been awhile since I used WU), a competitor could leverage crypto-currency to drop those fees considerably, since it would essentially only be acting as a portal on both ends of a decentralized, and free, network. So if I start up BitUnion, I could take dollars from Person A, convert them into Bitcoins in ~10 minutes, convert them into dinars and hand them off to Person B with substantially lower transaction fees. Neither Person A or Person B would have to mess with the crypto-currency side of it at all, just like Facebook friends don't have to mess with Javascript or rendering a page in Chrome vs. IE.

The problem of value remains, of course — there has to be a reason for people to lend their processing power to these transactions — but I don't think that's insurmountable.

I do agree that the technology can be applied past the financial sector but I haven't given those applications much thought — got any marketable ideas? :deal:

—Sam

Sam
01-26-2015, 07:18 PM
I appreciate the effort but I still don't see what is going on here. I get transactions and what not after the fact but the 'what is it really' is eluding me.

Had the same problem with Wiki. The graphic makes no sense to me at all.

:argh: I passed Econ 101!!!!

Like, what "is" a Bitcoin or some difficulty with the process?

Teallaura
01-26-2015, 07:23 PM
The fundamental draws, from my understanding is:

1) Inflation — crypto-currency like Bitcoin is theoretically immune to inflation (like digital gold or something). Whether or not this is a draw depends on whether you think inflation is necessarily a bad thing. I believe that the vast majority of economists do not regard inflation as necessarily bad (most think it's a necessary good).

2) Decentralization/Free — since the "ledger" of Bitcoin, at least, is computed democratically (transaction verification happens on a bunch of computers "mining" at the same time), there's no bank to extract a fee. So if a crypto-currency was stable, you could avoid paying that 3%-5% transaction fee when you send a payment through Visa, Mastercard, Paypal, etc. In developing countries and international transfers, where transaction fees can be significant, I believe this has made Bitcoin more practical (and more popular) than in the USA.

3) Obscure Transactions — Even though crypto-currency transactions can be traced by interested parties (like governments), it's a harder than just getting a warrant for your Visa bill. Sites like Silk Road used Bitcoin to make it harder for the government to trace sales of contraband and illegal services.

I think I read a couple more features of crypto-currencies that advocates use for support but they are eluding me now. How crypto-currency works, in terms of function, is pretty simple:


http://youtu.be/l9jOJk30eQs


Crypto-currency, as a currency, is probably doomed to failure. But the technology behind the currency is probably very important for future financial systems in a globalized economy.

—Sam
:woohoo: I get it now! Thanks!!!

Teallaura
01-26-2015, 07:26 PM
Like, what "is" a Bitcoin or some difficulty with the process?
No, where the heck money entered the process. How does Alice have an initial balance to buy Bob's danged lawnmower in the first place?


Um, actually, it didn't say how that was done.... :huh: That's also from 'mining', right? Er... maybe I don't quite got it yet...

Truthseeker
01-26-2015, 07:30 PM
The fundamental draws, from my understanding is:

1) Inflation — crypto-currency like Bitcoin is theoretically immune to inflation (like digital gold or something). Whether or not this is a draw depends on whether you think inflation is necessarily a bad thing. I believe that the vast majority of economists do not regard inflation as necessarily bad (most think it's a necessary good).

2) Decentralization/Free — since the "ledger" of Bitcoin, at least, is computed democratically (transaction verification happens on a bunch of computers "mining" at the same time), there's no bank to extract a fee. So if a crypto-currency was stable, you could avoid paying that 3%-5% transaction fee when you send a payment through Visa, Mastercard, Paypal, etc. In developing countries and international transfers, where transaction fees can be significant, I believe this has made Bitcoin more practical (and more popular)than in the USA.

3) Obscure Transactions — Even though crypto-currency transactions can be traced by interested parties (like governments), it's a harder than just getting a warrant for your Visa bill. Sites like Silk Road used Bitcoin to make it harder for the government to trace sales of contraband and illegal services.

I think I read a couple more features of crypto-currencies that advocates use for support but they are eluding me now. How crypto-currency works, in terms of function, is pretty simple:


http://youtu.be/l9jOJk30eQsPerhaps someday I will critique one part of your post (copied above).





Crypto-currency, as a currency, is probably doomed to failure. But the technology behind the currency is probably very important for future financial systems in a globalized economy. It seems self-contradicting. Anyway, you should give at least one reason why you think it would fail as currency; otherwise you are just guessing.

Raphael
01-26-2015, 07:35 PM
No, where the heck money entered the process. How does Alice have an initial balance to buy Bob's danged lawnmower in the first place?


Um, actually, it didn't say how that was done.... :huh: That's also from 'mining', right? Er... maybe I don't quite got it yet...

the "mining" is solving particular algorithms. When the algorithm is solved for a particular "block" it is mined (resulting in 24 bitcoins IIRC) and no-one else can mine the same block (sorted out using cryptographic keys, hence the name cryptocurrency).
in the early days the calculations of the algorithm were easily solved. As is goes along the calculations get harder and harder (so uses more computing power for longer so uses more electricity) to the point now where with 65% (IIRC) of all possible bitcoins having been mined (the algorithm allows for a finite number) "mining" requires specialised computers (using multiple GPU's) to solve the algorithms.

Alice either mined the bitcoins or she purchased some at one of the exchanges.

Sam
01-26-2015, 07:39 PM
No, where the heck money entered the process. How does Alice have an initial balance to buy Bob's danged lawnmower in the first place?


Um, actually, it didn't say how that was done.... :huh: That's also from 'mining', right? Er... maybe I don't quite got it yet...

I'm not sure how the initial "seed" Bitcoins entered circulation ... I imagine they were created wholly-formed from on high. After that, though, the new money entered the process from sending transactions from one holder to another as rewards. That's the lottery aspect the video was talking about. Since it's virtual currency, there's no actual holding cell or storage ... the current and maximum number of Bitcoins is determined via the software and reflected on the public ledger.

It makes sense to me by thinking about how I perceive a PayPal transaction ... I check my bank balance online and see how much money I have. Then I head over to PayPal and send some of that virtual money over to someone else. I then see my bank account balance drop. The other person sees the same transaction, only they see their bank balance go up. PayPal, as the person managing the transaction, also sees its balance go up a bit. The difference with the Bitcoin network is that PayPal's balance is going up because I pay a little extra to cover the transaction fee — the person who ends up verifying the transaction on Bitcoin sees her balance go up because the extra Bitcoins are being "mined" or created as a separate deal to my transaction.

In real money terms, it would be like a bank not charging you for online bill pay but just taking a couple cents out of a big storage vault that all the banks draw from to pay for managing transactions. Just how much that banker money is worth depends on how much people who aren't bankers are willing to exchange dollars or euros for it and so the price of the banker money (Bitcoin) fluctuates in value.

—Sam

Teallaura
01-26-2015, 07:41 PM
the "mining" is solving particular algorithms. When the algorithm is solved for a particular "block" it is mined (resulting in 24 bitcoins IIRC) and no-one else can mine the same block (sorted out using cryptographic keys, hence the name cryptocurrency).
in the early days the calculations of the algorithm were easily solved. As is goes along the calculations get harder and harder (so uses more computing power for longer so uses more electricity) to the point now where with 65% (IIRC) of all possible bitcoins having been mined (the algorithm allows for a finite number) "mining" requires specialised computers (using multiple GPU's) to solve the algorithms.

Alice either mined the bitcoins or she purchased some at one of the exchanges.

*emphasis mine

She can do that? It works like a normal exchange (i.e. I give you dollars and get euros)? Ah, that makes a lot more sense.

Raphael
01-26-2015, 07:46 PM
*emphasis mine

She can do that? It works like a normal exchange (i.e. I give you dollars and get euros)? Ah, that makes a lot more sense.Pretty much yeah. I've not ever bought any. I do know TruthSeeker has some (and I hope for his sake he didn't buy them when the exchange was riding high at over US$1000/bitcoin rather than the US$256/bitcoin (https://www.google.co.nz/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=1 BTC to USD) it is now.)

Teallaura
01-26-2015, 08:03 PM
Pretty much yeah. I've not ever bought any. I do know TruthSeeker has some (and I hope for his sake he didn't buy them when the exchange was riding high at over US$1000/bitcoin rather than the US$256/bitcoin (https://www.google.co.nz/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=1 BTC to USD) it is now.)
Ouch... Although doesn't that kinda kill the 'immune to inflation' theory?

Raphael
01-26-2015, 08:06 PM
Ouch... Although doesn't that kinda kill the 'immune to inflation' theory?

mmm think commodities, like gold price or oil price (neither of which are totally immune to inflation)

Teallaura
01-26-2015, 08:09 PM
mmm think commodities, like gold price or oil price (neither of which are totally immune to inflation)
Gotcha.

Sam
01-26-2015, 09:49 PM
Perhaps someday I will critique one part of your post (copied above).


It seems self-contradicting. Anyway, you should give at least one reason why you think it would fail as currency; otherwise you are just guessing.

1a) Because Bitcoin's decentralized nature is its downfall as a currency — without the backing of a state, no currency's value can be stable.

1b) Because it's wildly vulnerable to speculation, like stocks or gold. Unlike those things, however, there's nothing "there" to keep it rooted. Reminds of The Simpsons' "Gump Roast" episode:


3723

Grampa Simpson: Holy Toledo! What's keeping that dress on?
Sideshow Mel: The entire collective will of this audience!

That's all Bitcoin, as a currency, is. The collective agreement of value. Unlike other currencies, however, Bitcoin has no central bank, no reserve assets, no state to serve as backing. So, like gold or stock, its value is not controlled and speculators can wreak havoc. Anyone who bought into Bitcoin when it was >$1000/bc has seen the value of her asset tank. And there's no guarantee, or even likelihood, that value is coming back.

I like the technology behind Bitcoin. But it's a terrible currency (the worst performing currency of 2014, if I remember right).

—Sam

Sparko
01-27-2015, 07:11 AM
yeah I don't trust cryptocurrency. I think if it basically as a stock, but without any product or company behind it. Basically a junk bond. It has value because of what people agree the value is, and that value goes up and down all the time. If someone were to find a way to do the mining cheaply, or break the crytocode, the entire currency would collapse in a puff of smoke.

Irate Canadian
01-27-2015, 09:00 AM
If someone were to find a way to do the mining cheaply, or break the crytocode, the entire currency would collapse in a puff of smoke.
Not in favour of cryptocurrencies, but the hashing protocol is very secure, there is no way to break the cryptocode. However, your other point is right. Bitcoins have a specialized type of machines called ASIC's that can mine extremely fast, it hasn't brought down the currency yet...although there is always a chance.

Irate Canadian
01-27-2015, 09:06 AM
I do agree that the technology can be applied past the financial sector but I haven't given those applications much thought — got any marketable ideas? :deal:

—Sam
Right now, I can only think of a SSL replacement which uses the blockchain to secure websites.

Sparko
01-27-2015, 09:06 AM
Not in favour of cryptocurrencies, but the hashing protocol is very secure, there is no way to break the cryptocode. However, your other point is right. Bitcoins have a specialized type of machines called ASIC's that can mine extremely fast, it hasn't brought down the currency yet...although there is always a chance.

Yeah. saying something is uncrackable is usually what is claimed just before someone notices some flaw in the code that allows it to be cracked. Humans write the code and humans make mistakes. The "unsinkable Titanic" syndrome.

Also, if a major government wanted to bring down bitcoin, such as the USA, just think how much processing power they could use to flood the market with bitcoins, or perhaps even crack the hash.

Irate Canadian
01-27-2015, 09:24 AM
Yeah. saying something is uncrackable is usually what is claimed just before someone notices some flaw in the code that allows it to be cracked. Humans write the code and humans make mistakes. The "unsinkable Titanic" syndrome. But it's a hash which cannot be replicated. I can't explain how complex the code is for this stuff. It's extremely secure. However, there are problems in implementations and other issues of Bitcoin.


Also, if a major government wanted to bring down bitcoin, such as the USA, just think how much processing power they could use to flood the market with bitcoins, or perhaps even crack the hash.
This is another flaw of bitcoin called the 51% hack. If a enemy tries to flood the network with too much processing power, they can control all transactions.

Teallaura
01-27-2015, 09:47 AM
Not in favour of cryptocurrencies, but the hashing protocol is very secure, there is no way to break the cryptocode. However, your other point is right. Bitcoins have a specialized type of machines called ASIC's that can mine extremely fast, it hasn't brought down the currency yet...although there is always a chance.
*emphasis mine

This assumption has been the downfall of nations.

Teallaura
01-27-2015, 09:49 AM
But it's a hash which cannot be replicated. I can't explain how complex the code is for this stuff. It's extremely secure. However, there are problems in implementations and other issues of Bitcoin.
I don't doubt it's extremely complex - I've just lived long enough to know that 'can't be broken' are usually famous last words.


This is another flaw of bitcoin called the 51% hack. If a enemy tries to flood the network with too much processing power, they can control all transactions.It surprises me that it hasn't been tried...

Irate Canadian
01-27-2015, 10:28 AM
I don't doubt it's extremely complex - I've just lived long enough to know that 'can't be broken' are usually famous last words.
There is one way it can be broken...a quantum processor IIRC. Otherwise, the mathematics is sound.
It surprises me that it hasn't been tried...[/QUOTE]

It has, but not purposely... It's happened once, and will probably happen again.

Sparko
01-27-2015, 10:47 AM
There is one way it can be broken...a quantum processor IIRC. Otherwise, the mathematics is sound.




You are assuming that there is no flaw (either accidental or on purpose) in the hash code algorithm/software or introduced into the equation by some idiosyncrasy of digital processing (like the random/ pseudo-random number generating problem) - in fact I believe there was a problem with the android version of bitcoin wallets being hackable because of a flaw in the RNG code.

Teallaura
01-27-2015, 11:07 AM
There is one way it can be broken...a quantum processor IIRC. Otherwise, the mathematics is sound.
...
Um, I'm not saying the math isn't sound - but you just made my point. A theoretical way to break it exists - and you just never know when someone comes up with a better theory...

Unbreakable, like unsinkable, is just asking for it...

Truthseeker
01-27-2015, 02:52 PM
I wanted to make sure we started on the same page. Unfortunately, so far Tealaura is not saying "go on" to me.

I wanted to say something about inflation, how that term is being misused, but I need the "go ahead."

But I at least can point out that there is no known example of a powerful government setting up a monetary system de novo. Today, it is true that most if not all monetary systems of the world are in the hands of governments around the world. But that was after the government hijacked the monetary system in its nation or country in every case. Before the hijack, the monetary system worked reasonably well at least. Think about the trade that I discussed in my initial post and worked out what must have happened! I would have gone on to explain how money came into being in a given nation or country.

Teallaura
01-28-2015, 02:31 PM
I wanted to make sure we started on the same page. Unfortunately, so far Tealaura is not saying "go on" to me.

I wanted to say something about inflation, how that term is being misused, but I need the "go ahead."

But I at least can point out that there is no known example of a powerful government setting up a monetary system de novo. Today, it is true that most if not all monetary systems of the world are in the hands of governments around the world. But that was after the government hijacked the monetary system in its nation or country in every case. Before the hijack, the monetary system worked reasonably well at least. Think about the trade that I discussed in my initial post and worked out what must have happened! I would have gone on to explain how money came into being in a given nation or country.


I don't mind if you make your point but you weren't addressing the question I need answered at all. I got the answer I needed (thanks, Sam and Raph :kiss:). I'll read your answer if you like so feel free to go ahead.

Truthseeker
01-28-2015, 04:07 PM
I don't mind if you make your point but you weren't addressing the question I need answered at all. I got the answer I needed (thanks, Sam and Raph :kiss:). I'll read your answer if you like so feel free to go ahead.

Answer to what, "Are Bitcoins really money!?"

Chrawnus
01-28-2015, 08:51 PM
Answer to what, "Are Bitcoins really money!?"

Yes they are.





/thread

Teallaura
01-29-2015, 10:50 AM
Answer to what, "Are Bitcoins really money!?"
No, how value enters into the system.

Chrawnus
01-29-2015, 10:58 AM
No, how value enters into the system.

I suspect it works in basically the same way as ordinary money, i.e people agree to treat these virtual-/cryptocurrencies as if they have real value. I don't think the "mining" creates any real value. Unless everyone mining for cryptocurrencies are unknowingly lending their processing power to some shady hacking operation in order to break into peoples bank accounts or something. :noid:

Teallaura
01-29-2015, 11:09 AM
I just couldn't figure out how Alice had money in her account to begin with. :shrug:

Sparko
01-29-2015, 11:24 AM
I just couldn't figure out how Alice had money in her account to begin with. :shrug:There are places where you can sell goods and take bitcoin as payment. Or as previously noted, buy bitcoin at an exchange. The bitcoin is kept in an encrypted wallet (basically software)

Teallaura
01-29-2015, 12:18 PM
There are places where you can sell goods and take bitcoin as payment. Or as previously noted, buy bitcoin at an exchange. The bitcoin is kept in an encrypted wallet (basically software)
I'm not giving you my perfectly almost good lawnmower for your rancid bacon - get over it.

Sparko
01-29-2015, 12:33 PM
I'm not giving you my perfectly almost good lawnmower for your rancid bacon - get over it.

huh?
What would I do with a lawnmower? Mow the deck?

rogue06
01-29-2015, 12:55 PM
huh?
What would I do with a lawnmower? Mow the deck?
Have you looked at it lately. Then again, a leaf blower would probably be better.

Sparko
01-29-2015, 12:55 PM
Have you looked at it lately. Then again, a leaf blower would probably be better.Who's side are you on anyway?

Raphael
01-29-2015, 01:12 PM
Who's side are you on anyway?

whichever side distracts you long enough for him to snaffle your bacon.

Truthseeker
01-29-2015, 03:57 PM
Maybe someone brought this up already, but I don't recall. An artist and a businessman may enter into a contract through the Internet for the artist to do illustrations for the businessman's marketing plan. He pays for them with bitcoins. Labor for bitcoins.

There is no such thing as intrinsic value. Gold may have physical properties, but what value would a lode in the ground have if nobody knows about it? No, value is in the eye of the beholder. Beauty is a kind of value, indeed.