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Thread: What is Bitcoin?

  1. #1

    What is Bitcoin?

    Answers on a postcard..

  2. #2
    A Ponzi scheme mostly run by Russian and Chinese "entities" where people assign an imaginary monetary value to made up numbers.

    (edit) Funniest thing, even Youtube agrees:


  3. #3
    Ponzi schemes require intent to defraud. This does not apply to Bitcoin.

    There are a fair number of cryptocurrencies that were built as scams, and a fair number of scams that use BTC as a medium of exchange, but that applies much more readily to any of the top fiat currencies.

    Anyway, Bitcoin is the first cryptocurrency and first significant use of blockchain technology. Basically, it's a distributed ledger used to record and secure the transaction of value tokens on a peer-to-peer network. The effort required for this to happen is incentivised by a proof-of-work algorithm that allows miners to compete against each other for a chance at winning, or the a share of, the value tokens unlocked when each block of transactions is processed.

    Technical merit wise, BTC is behind the times. It also never came close to living up to it's intended purpose of a decentralized form of cash. Instead, it's become a highly centralized store of value and reserve currency for other crypto assets. It's still around because it was first and is currently most popular, which is a self-propagating situation. It also happens to have a large degree of active development keeping it marginally usable as a medium of exchange and it will be around for the foreseeable future.

  4. #4
    It's basically a way to make money from burning energy. Trouble is it is very in-efficient at that and requires crazy amounts of CO2 emissions before it is economically viable. I see it as an immoral act of environmental vandalism, when we need it least

  5. #5
    Originally Posted by Zak Gordon View Post (Source)
    It's basically a way to make money from burning energy. Trouble is it is very in-efficient at that and requires crazy amounts of CO2 emissions before it is economically viable. I see it as an immoral act of environmental vandalism, when we need it least
    It's a medium of exchange. Wealth isn't actually created.

    Also, the overwhelming majority of Bitcoin users are not, have never been, and will never be, miners. Mining is relegated to a handful of very large entities and consumer mining ASICs absolutely are a ponzi scheme, with groups like Bitmain having a near monopoly on them, building them cheaply through vertical integration and good economies of scale, mining on them themselves until they fall below a certain profitability threshold, then selling heavily used, nearly outdated parts to 3rd parties to recoup manufacturing costs.

    As for the efficiency of mining, that's hard to gauge. Bitcoin is hard to attack precisely because of the massive energy and hardware requirements necessary to do so. The power behind the blockchain is directly related to it's security. There are other means of securing blockchains (look up proof of work vs. proof of stake for the two main paths to this) that can theoretically provide similar security with a much lower energy requirement, but proof of work (mining) still has some unique advantages. If you are talking about energy spent vs. market capitalization, that's more straight forward in it's inefficiency, but also provides a tangible price floor and helps limit volatility.

  6. #6
    A decentralised anonymous currency for criminals that has been given way too much credibility due to paranoia about central banks after the 2008 financial crash.

  7. #7
    Many used on the Darknet

  8. #8
    Originally Posted by Gortron View Post (Source)
    A decentralised anonymous currency for criminals that has been given way too much credibility due to paranoia about central banks after the 2008 financial crash.
    Not especially decentralized, definitely not anonymous, and the majority of uses are not illicit.

  9. #9
    A (environmentally unethical) risk.

    'Almost $500,000 in Ethereum Classic coin stolen by forking its blockchain':

    https://arstechnica.com/information-...ts-blockchain/

  10. #10
    Originally Posted by Zak Gordon View Post (Source)
    A (environmentally unethical) risk.
    A rather contradictory statement in the context of the ETC attack.

    Risk of a 51% attack is inversely proportional to the environmental impact of a blockchain's PoW network.

    BTC for example (by far the largest network with far and away the most hardware, infrastructure, and electricity spent on supporting it's PoW algorithm) is immune to these attacks because the cost to own more than half the hashing power on the network is prohibitive, and even if one could afford it, there isn't enough hashing power for rent in the world to stage such an attack. An attacker would need to build/buy one's own hardware, which increases lead time (giving much warning) and costs exponentially.

  11. #11
    Bitcoin is something that has helped quite a few people finally ask a fundamental question; what is money?