Bitcoin

[glatt]

According to the Digiconomist Bitcoin Energy Consumption Index, the Bitcoin network already consumes more electricity annually than Denmark and doesn’t appear to be slowing down anytime soon.

linky

[Griff]

Some sort of adjustment is going on...

[jkg]

I heard that people are applying for second citizenship programs with bitcoin investment. how crazy is that?

[Flint]

This looks like an ad for something nobody wants.

[Griff]

glatt put a bullet in that brainpan.

[slang]

I've got the time and the interest in these cryptos so now's a great time to learn about them.

Originally Posted by xoxoxoBruce

If anyone is interested here's a good article on cryptocurrencies.

"While there is not a lot of good data, actual users of decentralized applications seem to fall into two categories:

*People who are off the grid: that is, in countries where access to competently operated traditional services is limited (for any number of reasons) but where internet is not
*People who want to be off the grid: that is, people who don’t want their transactions censored or known"

Good information there, Bruce. I'd like to add a category to the above quote.

*those that move around so frequently and or have no predetermined duration at a given specific location that keeping traditional financial data is tedious. Specifically, a physical address.

Originally Posted by tw

Do you want to invest in bitcoin? Or buy bitcoins? A major difference that even changes how that question can be answered.

Great questions. True.

I'd like to use them on a small scale as a savings account. There aren't a large number of businesses that accept cryptos at the moment for a few very logical reasons. Large price fluctuations.

There was a great deal of interest a few years ago with the cryptos, prices climbing for a wide range of coins. Until so many people that didn't understand the technology lost so much money to hackers.

I don't expect to be mining. Or day trading. My goal is to understand the ups and downs of cryptos in general.

Originally Posted by glatt

linky

The electric consumption seems to be in the mining. From the green perspective I can see the objection to mining cryptos.

-------------------------------------------------------------------

If you are a conventional person living a conventional life, you are most likely not terribly excited about cryptocurrency.

Not all unconventional people and living is criminal. So, this is of great interest to me.

But as yet not understood. There's not enough money in my life budget to lose large amounts so I'll get in cautiously. With small amounts.

I did find a company that deals with the security and storage of cryptos. Not so much in the trading but just keeping what you have mostly safe from hackers and how should I say...ENORMOUS GOVERNMENTS in decline. Not failure, but decline. Mostly caused by corruption, but that's all my opinion.

Link

They have a rather interesting procedure to store and retrieve currencies that I've not seen before.

Just because I've not seen alternatives doesn't mean there isn't equivalent services in the market.

It's an interesting site and service. If you happen to be sorta like me.

[glatt]

You can pay companies to mine for you. I can see how the companies would make money but I am not sure how the customer could make money. Is hitting paydirt, so to speak, basically random? Kind of like gambling?

[slang]

Originally Posted by glatt

You can pay companies to mine for you. I can see how the companies would make money but I am not sure how the customer could make money. Is hitting paydirt, so to speak, basically random? Kind of like gambling?

Those are great questions, glatt. My only answer is that I don't know yet.

Everything is based on the trading price I suppose.

And hitting pay dirt, mining coins has been described to me as more difficult and costly as you approach the maximum number of possible coins.

[BigV]

@glatt
It's really a lot closer to mining than it is to gambling. Gambling has a known input and a known chance (mostly). Bitcoin mining is like mining for gold in that a desired endpoint is sought and the work done to reach that known goal starts in some direction/with some intial numeric input. Gold miners dig dig dig and then either hit a nugget or they quit and start a new dig in a different direction. Bitcoin miners calc calc calc and either hit a target hash that is validated by the blockchain network (nugget!) or someone else hits it and they start anew seeking a new target hash (give up and start digging a new hole).

Super. Extra. Over. Simplified.


--Still--

You must grasp blockchain (an appendable, unerasable, distributed, verifiable ledger (with caveats, it is the future after all)) before you should do fuckall with Bitcoin.


Pretty good blockchain primer:




Very good Bitcoin mining primer:

https://coinsutra.com/bitcoin-mining...ide-beginners/

[BigV]

@slang

Not bein a jerk, I promise.

What is money? What is a dollar? What is a Bitcoin? They're tokens backed by trust.

Bitcoin is differentiated in that the trust is distributed across the network that maintains the blockchain. This is unlike money which is a token backed by a government (or some other entity). What is gold? It's a medium that can be traded for other things. Things like money/bitcoins/other cryptocurrencies/goods/services/other currencies/etc.

It's a fungible medium of transactions, and which you like more or less will be influenced by how much trust you have in the backer of the medium/token. US Dollars--trustworthy. Venezuelan Bolívares--not so much. The trust *matters*.

[xoxoxoBruce]

I get the block chain protection that you own certain Bitcoins so they can't be (theoretically) stolen, and if you trade them for something you can't say you still have them and use them again.

I've also seen the price/cost/worth of one Bitcoin vary from a few dollars to thousands of dollars for whatever reasons.

The video says you can do a deal, one on one, with people around the world.
How do I discover this person I don't know in Timbuktu, and what they may have for sale?
How do I discover a company in China makes something I would want?

If a Bitcoin is worth $1,000 today, how do I buy something worth $200, or $1400?
If I buy something from that guy in Timbuktu, block chin proves I paid for it, but how do I prove I never received it?
If I tire of Bitcoin how do I get my money out?
So many questions, and that's just the tip of the iceberg.

[slang]

Originally Posted by BigV

@slang

Not bein a jerk, I promise.

0k. I believe you. You have such a polite manner V. It's rare. It's appreciated.

Much of the following commentary will seem strange or wrong to most people. And, my sources are not from the NYT or Scientific American or even the Economist (hat tip - TW).

But probably not from Wired, Reddit and themillenniumreportDcom

Maybe I can articulate some thoughts that I live by. Not specifically with cryptos yet but money, credit and currency. Money, credit and currency are different animals. Different rules for each. Different uses too.

Originally Posted by BigV

What is money? What is a dollar? What is a Bitcoin? They're tokens backed by trust.

They are all backed by trust, that's true.

Let's start with money first. Money is the valuable thing. It's not a derivative. It is valuable alone by itself. But it's not practical to trade with. Conducting trade would be done with currency. Currency is a derivative of money. Currency can be printed or digitized at will. There are no limits to it's expansion. Money is limited as to it's expansion.

The more the currency is expanded, the less worth the existing currency is worth. BUT the money stays essentially the same. It's the real deal. You can't print it. Or digitize it. It's of limited supply. It cannot be expanded on a whim. It takes time and or effort to "make" money.

The paper dollar is currency. The digital dollar too. They can and have been expanded to suit what ever need or want the US gov't has at the moment. They can be manipulated. One year there's a trillion dollars in existence, the next there are 100 trillion.

In my estimation the only reason that there isn't massive inflation is that the dollar currency is mostly used outside the US. 80% by some stats I've seen. The US dollar is the reserve currency. More practical than money and can be used all over the world.

A bitcoin is digital currency that can only be expanded by mining. It's not physical which is technically a requirement of money, but it's limited. "Gov't" "bitcoin" cannot decide one day that it doesn't have enough buying power for it's needs and expand itself by a billion times. And it's decentralized. It's not backed by anything except the faith in the code and the internet.

Now for credit. It's a promise to pay in the future. With certain pre-determined terms. The "currency" for credit does not exist. Nor does the money. It's a ledger entry. Digits added to your bank account.

Yes, it's true that you can still buy what you want with the digits but the more digits in circulation the less buying power those digits have. If you are the US gov't it doesn't really matter though, because they print at will.

Can YOU print a trillion dollars for what ever YOU want to buy? It's a scam. And the world is getting wise. Dollar digits are still convenient, but there are other currencies with expansion limits.

One is bitcoin, though I do not expect it to replace the dollar. I expect it to lead to a crypto that will.

Originally Posted by BigV

Bitcoin is differentiated in that the trust is distributed across the network that maintains the blockchain. This is unlike money which is a token backed by a government (or some other entity).

Some people believe that being backed by the US government is declining in confidence.

The entire world must grow or manufacture things of value for dollars. The US treasury does not. It only needs to tap digits on a keyboard. Nothing of real value supplied. Except currency that is in decline.

Originally Posted by BigV

What is gold? It's a medium that can be traded for other things. Things like money/bitcoins/other cryptocurrencies/goods/services/other currencies/etc.

Gold is different. Gold isn't the promise, it's the delivery. All the work has already been done in mining and refining. There is no future promise with gold. It's in your hand. Not particularly valuable in industry but it's hypnotizing. Beautiful. Rare. Stable. Fungible. Divisible. Physical. It's money, in my opinion as well as many in Asia. Not so much the west because the west has sold or loaned much of their gold into the market to keep the price down. Now that they are out of gold, they use naked shorts on the comex and pay out in...you guessed it, dollars. You ordered gold at the comex specifically because you didn't particularly want dollars, you wanted money.

Every year or so you see some group scamming the comex, sponsored by some mega huge bank. It stays pretty quite on the news and no one understands what's happening anyway so why would I care.

Gold is kryptonite to the dollar. The higher the price of gold goes, the less people think of the "dollar promise". The more that they see inflation. Those same people want something they control. They want gold.

Do you remember when gold was around $275 an ounce? I do. The currency supply was much lower then.

Originally Posted by BigV

It's a fungible medium of transactions, and which you like more or less will be influenced by how much trust you have in the backer of the medium/token.

Yes, I agree. Don't forget the supply, but yes.

Originally Posted by BigV

US Dollars--trustworthy. Venezuelan Bolívares--not so much. The trust *matters*.

US dollar currency, trustworthy but declining. It's still strong on the USDX but gold is going up too. And dollars are available. Other currencies are most likely not. Not in the way dollars are. Because they're everywhere.

Plus the Fed actually keeps track of those numbers on the bills. I've bought things in the Philippines with all cash. Things that aren't cheap. I thought that dollars were as good as gold but I learned something. They are after the Fed verifies the denomination and the serial number. It seems that some other countries like NK want a piece of the printing out of nothing action but they don't have the correct serial numbers.

Now I'd like to add another layer to the confidence component behind the US dollar. Military threat.

The USMC. The military actually but there are always marines off your shore somewhere. And they're pissed off. And they want to break things and kill people. And they're good at it.

Why would you want these guys on your shores for a lack of interest in using the US dollar (for oil purchases)?

People losing faith in the US dollar and using it and holding it destabilizes that expansion concept. It's a big deal.

Can YOU print a trillion dollars on your keyboard at will? It's a big deal.

So that's my take on the issues. I'm not an economist or a finance guy or an engineer or a rodeo clown so I could be completely wrong on all my observations and opinions. That's my take at this time just the same.

[slang]

Originally Posted by xoxoxoBruce

I get the block chain protection that you own certain Bitcoins so they can't be (theoretically) stolen, and if you trade them for something you can't say you still have them and use them again.

Yes, pretty secure system it seems. So long as the internet is up and running.

Originally Posted by xoxoxoBruce

I've also seen the price/cost/worth of one Bitcoin vary from a few dollars to thousands of dollars for whatever reasons.

It's my guess that the price went down because so many people were not using the cryptos securely and were hacked.

If I had taken a beating like that it would turn me off to the whole notion of buying them too. Until I learned how to use them effectively anyway.

Originally Posted by xoxoxoBruce

The video says you can do a deal, one on one, with people around the world.

With crypto currencies? That sounds right but I'm not an expert. Peer to peer too I would guess. In that case if there was an agent separate from the vendor it might be feasible.

Let me think about this. I'm in the Philippines now, I log in to the site and execute a sell order that I will be using to pay for something far away. In China, lets say.

First off, you need to make an appointment with Daenerys Crypto at least a day in advance ( know your time zones ) so that they may set up their process to send the crypto.

Ok, I have my appointment...we are in process of the validation for the crypto now and with my other computer or phone, I call or video stream the vendor in China. My Ingrish translator is up and running.There is an additional party there in China to take delivery of the physical item? Or maybe you trust Mr. Lee. You've done business before. He's reliable.

As I ask the Daenerys Crypto people to hold a minute while I'm talking to Mr. Lee, they are assessing my face on the video which is a part of their security process.

They then believe it's me, I execute the transaction to Mr. Lee's bitcoin address. We wait 10 minutes or so for the bitcoin to go through the blockchain.

Then Mr. Lee gets confirmation. I thank the Daenerys Crypto people and end their video transmission.

Mr. Lee has the shipping website up and ready for his confirmation, he's already received it and now over video he gets the tracking number and displays it over video. You make a screen shot and verify that tracking with the shipper.

The "third party" takes the physical item to the shipper and now you must trust someone else for the delivery of your thingy.

You thank Mr. Lee and end his video feed.

But what if the item is faulty? How do I get a return?

Maybe through video feed he can demonstrate the thingy. Maybe he's got a process that is thought through and is sort of a standard "proof".

Or maybe it's such a low cost item that it doesn't really matter. You're getting a huge discount from ordering in China direct, he has a reliable feedback, or you've ordered before and are willing to take a chance for a much lower price.

But as far as I know, there are no charge backs. Not from a third party anyway. Third party certificates but what is that really worth?

The process just described is a bit long and complex. If you were to do a few deals on a small scale it wouldn't take long to get good at it or decide you'd rather use another payment method.

Originally Posted by xoxoxoBruce

How do I discover this person I don't know in Timbuktu, and what they may have for sale?

Alibaba dot com. They have some equivalent of Ebay too but I'm busy typing and don't want look it up on the net.

Originally Posted by xoxoxoBruce

How do I discover a company in China makes something I would want?

Alibaba would be my first go to. Never ordered from them so I can't really detail any results but the prices are good and they seem to get good feedback. It's the site that sells everything that they make in china. Amazon like.

Originally Posted by xoxoxoBruce

If a Bitcoin is worth $1,000 today, how do I buy something worth $200, or $1400?

Bitcoin is divisible. I believe out to like 5(?) decimal places. Promoters were describing that in a few years the price would be so high that the decimal places would be relevant. That hasn't been true yet but maybe someday.

Say a bitcoin price is $3950. Then you would use .05063 of a bitcoin for a $200 purchase. Plus .01 transaction fee of a bitcoin if you used Daenerys Crypto. Larger purchases might make more sense.

Or maybe...proposals we are seeing in the firearms industry now, through political pressure, financial institutions are pressured not to work with gun manufacturers.

If the banks decide they will no longer transact "x" products, bitcoin might make more sense.

Originally Posted by xoxoxoBruce

If I tire of Bitcoin how do I get my money out?

Sell it on an exchange. The price fluctuates but you can cash out. Some exchanges are more newbie friendly than others. If the value does increase as you sell, you'll have a tax liability too.

Link

Originally Posted by xoxoxoBruce

So many questions, and that's just the tip of the iceberg.

Yes, great questions here. We're sorting it out together.

[slang]

Originally Posted by glatt

You can pay companies to mine for you. I can see how the companies would make money but I am not sure how the customer could make money.

Here's a mining company from the net.

The mining is powered from geo-thermal so the bitcoins produced shouldn't kill the planet.

Genesis Mining will not publish returns on their mining which, in this case, does seem a lot like gambling.

There is this graph that shows the historical return but how accurate is it?

Another detail is that the "plans" that allow the use of their super-duper-luper fast and reliable machines to mine for subscription seem to be booked with the exception of one. Dash.

The newer the coin, the more potential profit? I don't know.

There is an option to buy a starter plan for $57.50 but if the yield is .0331 it would generate a $0.165 profit. Add to that the duration of the plan, 2 years.

I'm sure there's more to this that I don't understand. On the outset it doesn't seem like something encouraging.

[slang]

Chatty today.

Another news item that seems relative to the conversation of gold being money.

"A team of Chinese researchers have turned cheap copper into a new material “almost identical” to gold"

If this turns out to be true it would be a game changer IF they can create this new "almost gold" at the same price or lower than spot.

And assuming that there is no effective testing method to identify gold from "almost gold".

It would probably confuse the issue of gold is money at the very least.