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  #1  
Old 02-25-2014, 12:42 PM
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what's a bitcoin anyway?

Mt.Gox site disappears, Bitcoin future in doubt - Feb. 25, 2014

can someone give me the dumbed-down definition of a bitcoin?
is it like paypal?

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  #2  
Old 02-25-2014, 12:48 PM
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I've heard it equated to the "digital" money that gamers would earn in their virtual worlds, much like the "Farmville" fanatics on Facebook used to buy, earn and spend.
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  #3  
Old 02-25-2014, 12:52 PM
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Its very much NOT like paypal. Its a decentralized ledger system where every transaction is recorded permanently yet transactions are made anonnymously between "wallets" which are not attached to your name or address. A person can have an infinite number of wallets and transactions cam be made between any 2 wallets regardless or the distance of borders that stand in between. Transaction cost about 5 cents regardless of the amount. The whole system is completely unregulated. Many bitcoins have been stolen such as in the Mtgox example (Magic The Gathering Online Exchange), but no bitcoin has ever been forged.

Mtgox was one of many bitcoin exchanges. This exchange has been spiralling out of control for months so it came as no surprise. They earner a terrible reputation for many many cockups over the last year. It boggles the mind that anybody still trusted them.

Oh and the total $ ammount of the BTC stolen either by Mtgox or some outside party (we don't know for sure yet, Mtgox are either thieves or incompetent) is around $375,000,000. Thats not counting the USD and other fiat currencies also lost in the exchange.

If you would like to see some horror stories about Mtgox. Keep in mind that bitcoin is trading around $500/BTC
https://pay.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/

Quote:
I am the biggest loser at 4700+ BTC. Screenshot from a few days ago for the purposes of record keeping.
http://imgur.com/IDbM0BP
Quote:
I had 14342 BTC in mtgox since 2010. When i tried to withdraw them , they asked for verification.
Luckily i have more in cold storage and was unable to touch them until last December since i was in prison.
Quote:
About 1998 BTC. This was BTC I had in Bitcoinica until Zhou Tong decided to rob his own customers blind. Amir Taaki and the Bitcoin Consultancy group then sent the remaining BTC into MtGox for reimbursement where they promptly got hacked again resulting in insolvency. Late 2012 Bitcoinica was finally sent into liquidation but MtGox was unwilling to hand over the 60K+ BTC frozen in the Bitcoinica account to the court appointed liquidator (PKF) citing 'privacy reasons'. Now all of those are gone too. Despite all this, I'm still a believer in Bitcoin. (Just not so much other people)
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144 BTC and 100 were entrusted to me by a friend because he wanted to get into cryptocurrency. I haven't told him what happened just now though he has been updated all this while. I don't know how to.
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1200 btc.
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lost 340 ... Oh well. Easy come, easy go.
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  #4  
Old 02-25-2014, 01:01 PM
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Not sure what farmville money us but it sounds like the bitcoin goes beyond that. It does have tangible value and can be exchanged for real goods. My understanding is that it is untraceable as it is verified by a server as being legit but that server is secure and there is no personal data involved in the process.

The part I am unclear about it is how it is 'obtained' or 'earned'. Some geek at work explained that back before it was popular people would leave their computers on and it would run some program that would 'mine' for the bit coins. The amount of time to obtain a single coin was quite long .. weeks or months as I recall. Bit coins are quite popular on something called the "Dark Web"
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  #5  
Old 02-25-2014, 01:03 PM
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ok. so what exactly can a bitcoin buy? or is that a stupid question?
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  #6  
Old 02-25-2014, 01:06 PM
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Originally Posted by benhogan View Post
ok. so what exactly can a bitcoin buy? or is that a stupid question?
Anything someone wants to sell. Typically it is accepted for things on the black market because as mentioned above, it is untraceable.
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- God is an ever receding pocket of scientific ignorance that's getting smaller and smaller as time moves on..." Neil DeGrasse Tyson
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Old 02-25-2014, 01:07 PM
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Actually, anything can be exchanged for goods, provided that there is a market for it. We trade pieces of paper and stamped metal in exchange for goods and services everyday. Bitcoin credits can be exchanged for a fairly wide variety of services and items, provided the other party is willing to accept it.
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  #8  
Old 02-25-2014, 01:08 PM
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Originally Posted by benhogan View Post
ok. so what exactly can a bitcoin buy? or is that a stupid question?
It largely depends on who/what accepts bitcoin. Alternative you could cash in your bitcoins and get $ back. MtGox used to do that.
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  #9  
Old 02-25-2014, 01:08 PM
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Originally Posted by davidmash View Post
Not sure what farmville money us but it sounds like the bitcoin goes beyond that. It does have tangible value and can be exchanged for real goods. My understanding is that it is untraceable as it is verified by a server as being legit but that server is secure and there is no personal data involved in the process.
Close. Its verified by thousands of computer, most no bigger than a USB stick. Each one stores the entire "blockchain" (ledger of all transactions). You need a minimum of 6 confirmations from 6 different nodes before your transaction is added to the blockchain. Eventually all transations are confirmed by all the nodes.

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Originally Posted by davidmash View Post
The part I am unclear about it is how it is 'obtained' or 'earned'. Some geek at work explained that back before it was popular people would leave their computers on and it would run some program that would 'mine' for the bit coins. The amount of time to obtain a single coin was quite long .. weeks or months as I recall. Bit coins are quite popular on something called the "Dark Web"
Sounds about right leaving out a lot of details. The new bitcoins are "mined" by the same computers that confirm transactions. The total number of bitcoins that will ever exist is 21 million. In the first 4 years 10.5 million were mined at a rate of about 24 every 10 minutes. After the first 4 years which ended last fall, the production rate halved to 12 every 10 minutes. The production rate keeps getting chopped in half every 4 years.

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Old 02-25-2014, 01:11 PM
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I still don't get it. I guess I'm just dense. Thanks anyway.
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  #11  
Old 02-25-2014, 01:12 PM
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Originally Posted by benhogan View Post
ok. so what exactly can a bitcoin buy? or is that a stupid question?
CoinMap
Bitcoin | Overstock.com: Now Accepting Bitcoins
Shop with Bitcoins | Gyft | Mobile Gift Card Wallet
Bitcoin Now Accepted at TigerDirect.com!
Just to name a few. Theres also drugs, guns, sex, murder for hire, human slavery etc but I won't bore you with those links.
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Old 02-25-2014, 01:24 PM
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Close. Its verified by thousands of computer, most no bigger than a USB stick. Each one stores the entire "blockchain" (ledger of all transactions). You need a minimum of 6 confirmations from 6 different nodes before your transaction is added to the blockchain. Eventually all transations are confirmed by all the nodes.


Sounds about right leaving out a lot of details. The new bitcoins are "mined" by the same computers that confirm transactions. The total number of bitcoins that will ever exist is 21 million. In the first 4 years 10.5 million were mined at a rate of about 24 every 10 minutes. After the first 4 years which ended last fall, the production rate halved to 12 every 10 minutes. The production rate keeps getting chopped in half every 4 years.

Pesky details.
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- God is an ever receding pocket of scientific ignorance that's getting smaller and smaller as time moves on..." Neil DeGrasse Tyson
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- When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours.
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  #13  
Old 02-25-2014, 01:24 PM
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I still don't get it. I guess I'm just dense. Thanks anyway.

dont feel bad, you aren't the only one. tjts1 among others already tried to explain this to me over on STD. I still don't get it either.

I don't understand how the mining process happens, who controls the mining computers, and who in their right mind would accept this type of currency for goods and services.
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Old 02-25-2014, 01:32 PM
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dont feel bad, you aren't the only one. tjts1 among others already tried to explain this to me over on STD. I still don't get it either.

I don't understand how the mining process happens, who controls the mining computers, and who in their right mind would accept this type of currency for goods and services.
The vast majority of people's eyes glaze over when you get into the details of it. The complexity of the bitcoin protocol is one of its biggest failures in my opinion. Its a new technology still in beta and some of the early adopters are taking on a huge amount of risk as you can see by the Mtgox debacle. I would never tell anyone to go invest in bitcoin. I don't know if bitcoin will succeed in the long term but the the idea of a decentralized cryptocurrency that is inflation proof will live on. Government issued money that can be inflated and manipulated by a central bank is distasteful to a lot of people. Cross border transactions, remittances, black markets and money laundering are some areas where bitcoin has an advantage over fiat.
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  #15  
Old 02-25-2014, 01:35 PM
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Originally Posted by JB3 View Post
dont feel bad, you aren't the only one. tjts1 among others already tried to explain this to me over on STD. I still don't get it either.

I don't understand how the mining process happens, who controls the mining computers, and who in their right mind would accept this type of currency for goods and services.
There are medicines that can help with some of them. Just saying.. you should always practice safe bit coin.

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- With out god, life is everything.
- God is an ever receding pocket of scientific ignorance that's getting smaller and smaller as time moves on..." Neil DeGrasse Tyson
- You can pray for me, I'll think for you.
- When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours.
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