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Bitcoin

What is Bitcoin?
How does it work?
What can you buy?

Just curious

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Reply 1
Avatar for Randz18
Randz18
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Original post by Randz18
What is Bitcoin?
How does it work?
What can you buy?

Just curious

Bitcoin ia virtual money. It's like paypayl in some sense. People pay for stuff in bitcoin as it is untraceable.

At the moment 1 Bitcoin is a few thousand pounds. But it is raplidly going up. So of you bought 1 bitcoin 5 years ago (was worth about £20 then) you would be rich now. It gambiling in a way as dewling with stock market and exchange rate.

There are many websites where you buy bitcoin. You norammly get a bitcoin wallet which is a e wallet where u store all your bitcoins. Yes... u can buy 0.01 bitcoin.

People mainly buy it for investment... called bitcoin mining
https://www.google.co.uk/url?sa=t&source=web&rct=j&url=https://amp.reddit.com/r/explainlikeimfive/comments/12knie/eli5_bitcoins/&ved=0ahUKEwjds7Pl9ZzXAhWCMBoKHf2SCWsQFghAMAA&usg=AOvVaw0_qsRVmJKyMmYGGz1gg7Co&ampcf=1

This might be the best explanation you're gonna get. Even when explained properly, it still might take time to fully understand.
I'm not sure how good I'll be at explaining it, but I'll try. Bitcoin is a digital currency. To create a Bitcoin a miner computer must work hard to solve a sort of mathematical puzzle. These puzzles get harder and harder as like goes on so it takes a little longer for each new Bitcoin to be mined. There is also an upper limit on how much can be mined altogether. Bitcoin then uses blockchain, a newish web technology, to create a public ledger records all transactions anonymously. Anyone can access the public ledger, but because of that anyone who managed to change the ledger would be noticed immediately. Although it writes this data to anonymously, it is still public. Because of this, if you know what you are looking for you can find details of transactions, especially large transactions.

It was originally used mostly on the darkweb (a kind of underground internet) to buy things like drugs and guns. Anything illegal really. Now those have largely gone to a new form of cryptocurrency that is more secure. Bitcoin can be used on lots of websites these days, or can be exchanged for any currency you do want.
Omg @Ninja Squirrel!
Original post by Randz18
What is Bitcoin?
How does it work?
What can you buy?

Just curious


Original post by VirgoStrain
I’d like to find this out too. It’s something I have literally no understanding of.


@DayneD89 explained it pretty well but I'll add a few minor notes.

Bitcoin is not really a currency, it's a little misleading to call it that because currencies need to fit certain criteria and bitcoin doesn't meet those so I think a lot of people are now referring to cryptocurrencies as assets rather than currencies. Bitcoin is actually terrible for buying things with, it's slow and its expensive.

To mine bitcoins, computers have to solve cryptographic hash functions, the SHA-256 hashes in bitcoins case and it's basically done using brute force. The difficulty rises as more miners join the network which means as more people mine for bitcoin, it becomes harder mine a bitcoin so the price goes up.

The thing that makes cryptocurrencies like bitcoin unique is that they are completely decentralised, nobody can shut it down and nobody owns it. The code is open source and maintained by the bitcoin dev team but any changes they propose have to be approved by the bitcoin community, if they disagree with the changes then the devs cannot change it.

Bitcoins are not stored on a server or anywhere like that, they are generated on the fly by the code and are stored in encrypted wallets with extremely difficult private keys (passwords) to crack, in fact there isn't enough time in the universe to crack a private key.

Original post by BlinkyBill


$6500 and counting now :gasp:
Original post by Ninja Squirrel
$6500 and counting now :gasp:


And you haven't sold?! People who are still buying Bitcoin are mad! The crash is coming. :yep:
Original post by Snufkin
And you haven't sold?! People who are still buying Bitcoin are mad! The crash is coming. :yep:


I bought at $550 last year and I'm holding until $100,000 per bitcoin which will probably happen in 5 - 10 years :smile:
Reply 9
Avatar for Arran90
Arran90
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If Bitcoin is purchased using real money like Sterling or US dollars then what exactly happens to that money? Is it then further invested in gold or is it used for other purposes such as nefarious projects or secretly writing of debts somewhere or another?
Original post by Ninja Squirrel
I bought at $550 last year and I'm holding until $100,000 per bitcoin which will probably happen in 5 - 10 years :smile:


If you hang on to them for that long, you might not even get your initial investment back. 100k? Never gonna happen.
Original post by Arran90
If Bitcoin is purchased using real money like Sterling or US dollars then what exactly happens to that money? Is it then further invested in gold or is it used for other purposes such as nefarious projects or secretly writing of debts somewhere or another?


If I have 1 bitcoin and sell it to you for real money, that real money goes into my bank account and I spend it like normal. You then have a bitcoin which holds some intrinsic value and can go up or down. It's no different to buying physical gold, except you're buying something which is digital.

Original post by Snufkin
If you hang on to them for that long, you might not even get your initial investment back. 100k? Never gonna happen.


People said the same when it was $50, $100, $500, $1000, $2000 etc etc. People continue to underestimate bitcoin and it's for this very reason that it makes a fantastic investment opportunity. I believe in 10 years time bitcoin will steal at least 20% of golds market and bitcoin will have a market cap of about $1.4trillion.

$1.4trillion / 18million bitcoins (approximately) = $77,000 per bitcoin, however I think $100,000 is entirely plausible. Bitcoin is basically digital gold, a store of value.
Reply 12
Avatar for Randz18
Randz18
OP
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What would happen if it crashed?


Original post by Ninja Squirrel
People said the same when it was $50, $100, $500, $1000, $2000 etc etc. People continue to underestimate bitcoin and it's for this very reason that it makes a fantastic investment opportunity. I believe in 10 years time bitcoin will steal at least 20% of golds market and bitcoin will have a market cap of about $1.4trillion.

$1.4trillion / 18million bitcoins (approximately) = $77,000 per bitcoin, however I think $100,000 is entirely plausible. Bitcoin is basically digital gold, a store of value.
Original post by Arran90
If Bitcoin is purchased using real money like Sterling or US dollars then what exactly happens to that money? Is it then further invested in gold or is it used for other purposes such as nefarious projects or secretly writing of debts somewhere or another?


In that case, all you are doing is exchanging money for bitcoin. Thus the other person loses bitcoins and gains money. They can use that however they want.
Original post by Randz18
What would happen if it crashed?


Lots of people lose lots of money. That's about it as no 'serious' things are built with bitcoin as the foundation of their funding.
Original post by DayneD89
In that case, all you are doing is exchanging money for bitcoin. Thus the other person loses bitcoins and gains money. They can use that however they want.


How does anybody know what the money is being used for.

Is it being used to fund Israel?

Is it being used to fund Daesh or terrorism?

Is it being used by a government or a small group of individuals to buy up the world's gold reserves?
Original post by Randz18
What would happen if it crashed?


There is risk with anything, what would happen if the stock market crashed... I a lot of people would lose a lot of money but it will probably recover, just like the stock market has done.
Reply 17
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Randz18
OP
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There's no traces with bitcoins right?
Original post by Arran90
How does anybody know what the money is being used for.

Is it being used to fund Israel?

Is it being used to fund Daesh or terrorism?

Is it being used by a government or a small group of individuals to buy up the world's gold reserves?


People don't know, any more than we know what any currency is being used for. A government could collect a lot of Bitcoins if they wanted, however, they would have to exchange other assets for the bitcoins so it wouldn't make much sense. They could mine bitcoins and sell them I guess, then use the money for what they want, but governments have better ways of raising money that high-risk ventures like bitcoin mining.
Original post by Randz18
There's no traces with bitcoins right?


Yes and no. Lets say I buy something from you for 1 bitcoin. Anyone can look at the public ledger and see that someone sent someone 1 bitcoin, but they cant see who it was. Bigger purchases stand out more of course and then if you know what id somebody was given (for example by following a persons ID after noticing a big purchase) you can piece things together.

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