Can Someone Tell Me Why Bitcoin is so Valuable?

Seems like something that won’t last, but what the hell do I know? Tell me what I’m missing.

 

I think mostly for spending on the dark web

 

The raw value is based on speculation and hope. The Block chain is the real deal and has/will change change the way we manage transactions for decades. Ethereum, to me, is one of the groups realizing the true potential of block chain technology.

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Blockchain is distributed computing, where parts of the whole are stored all over?

 

Are you able to say this in English?

 

Let me try. Basically the Block Chain is a public ledger that stores all data transfers (be it financial or information) between all parties on a network. This means that every node on a network knows and validates every transaction ever performed on that network. This guarantees trust on a network. A bad actor can't make a fraudulent transaction on the network because all data is public and every node validates the entire history of transactions. Someone can't claim that you sent them money, because it's easy to refute that claim since the ledger contains every transaction ever committed.

Bitcoin harnesses block chain technology for Financial transactions. It's value is largely speculative (as it is for all cryptocurrencies). The benefit is that all transactions are guaranteed and funds settle in a matter of minutes.

Ethereum is a group that uses block chain technology to generate tokens. They monetize the tokens to allow users to pay for secure transactions. This transactions can be monetary or secure digital communications. It's a glorified secure Federation Service.

It's all really cool stuff. I used to mine bitcoins about 7 years ago, unfortunately I sold my stash long before the meteoric rise.

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What is mining bitcoins? I always thought that meant stealing them.

 

Network nodes solve mathematical problems requiring brute force (think something analagous to discovering mersenne prime numbers). When a node has "solved" the problem he is given a block of coins from the network. This process is called mining for coins, it is also the processed used to validate the public ledger. The problems are created based on the total computing power of the network. The process is designed so that each problem is answered approximately every 8 minutes. The more computing power on the network, the harder the problems are to solve. I don't pretend to understand much of the math theory behind the process of coin creation. Mining will continue until 21 million bitcoins have been created, at that point no more coins will be entered into circulation.

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Just be thankful you didn't get black lung.

 

That is very interesting.

If all transactions are on the public ledger, how does it become a dark web currency? Seems like if you bust one (I'm going to go for a bad analogy) spider, you could pick up all his flies too, just by following the transactions.

 

Transactions are anonymous. The ledger essentially specifies the wallet ID of the two parties. Obviously to ship illegal products at some point the seller needs an address, but that information is not within the ledger itself. Anyone can create a wallet, and people can create multiple wallets. However to move money from one wallet to another is a transaction, which is stored forever. BTC is anonymous, but it's not untraceable, just really inconvenient. The FBI was still able to bust Silk Road despite the fact it only accepted BTC. Hard cash will always be harder to trace than anything digital, it's just not as convenient.

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I think I'm more confused on what BitCoin is now than I was before opening the thread.

 

Just listened to a Freakonimcs podcast on it this morning. The title of the episode is "Why everyone who doesn't hate bitcoin loves it."

Very good breakdown of its value and its multi faceted functions.

 

Yeah, me too

 

Yes

 

Yup.

 

We apparently need some bitcoin focus up in here.

 

Try this

https://www.quora.com/What-is-a-goo...rrency-and-what-does-mining-for-bitcoins-mean

 

A successful mining yields 12.5 bitcoins, worth about $57,000?