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The bitcoin thread.

Discussion in 'Off-Topic Discussion' started by jokerthief, Dec 26, 2016.

  1. jokerthief

    jokerthief No reason to get excited. Site Donor

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    This thread started as a sidebar status update. I need more space to converse with ILJO, so I'm creating a thread. We will need a thread on bitcoin eventually anyway, since it's going to be one of the biggest stories of the upcoming years. I'll eventually write more on the subject and probably update the thread periodically, but I'll start by pasting my correspondence with @ILJO in the status update, as that will move off the sidebar soon. Bitcoin is very complicated and it will take me many hours to write out all I know of the subject.

    That's very hard to quantify. On a technical level bitcoin is an amazing invention that solves many problems that desperately need solving. But because of this, it is a very disrupting innovation. As such, there will likely be political attacks on it as there are many powerful industries in the financial sector that will be threatened by it. It will also greatly limit governments' abilities to go into debt, so governments will likely see it as a threat as well. So, it's likely that governments will try to kill it with regulation. I will come back to this later. But first I want to mention two other problems bitcoin faces.

    There is also the problem of scaling. Right now, bitcoin would not be able to handle enough transactions per second to become a viable world currency. There is a very vigorous debate in the bitcoin community right now on what the proper block size should be and how bitcoin should scale.

    I'm not well conversant on scaling, but I'm generally not worried about it. Just like how the internet was really slow when it first came out and people were all doom and gloom about it, I think that innovation will eventually figure the problem out. There are billions of dollars currently being poured into bitcoin start-ups, so there is huge economic incentive to fix the problem.

    The other problem facing bitcoin is other cryptocurrencies supplanting it. I'm not concerned with this as I think that the network effect is too strongly established at this point for any other crytopcurrency to supplant bitcoin.

    The political question is the one where I think there is some legitimacy. We may very well be on the brink of a political war that will be vigorously fought. The problems that governments face is that by the time they realize how big of a threat bitcoin is, it may very well be too late to stop it. It also may just simply be impossible to stop anyway.

    Look at how world governments have failed to stop drugs, for example. But I think a better situation to look at is how impotent governments in countries that have currency crises have been in stopping trading in dollars.

    On a technical level it is impossible for governments to stop bitcoin. The network is so decentralized that the only way to shut it down would be to shut down the internet itself. It would be impossible for governments to confiscate the bitcoin people have secured. It would require a sophisticated hack-job of millions of users. That's simply impossible. Plus, if the government did confiscate a significant portion of bitcoins, it would just make the amount that they haven't confiscated more valuable individually. This may dampen market cap, but the market cap would likely quickly recover.

    At the moment, it looks like Trump is going to be pro bitcoin. He just picked a pro bitcoin supporter to run the Office of Management and Budget. If bitcoin gets four years of growth under Trump, it will be very hard for the US to lead the way with a political attack on bitcoin. There will be too many US citizens and US bitcoin businesses at that point for it to be politically feasible to attack bitcoin properly.

    So far, the trend has been positive with regard to government's reaction to bitcoin. Is a conspiracy possible? Yes, but we haven't seen any significant start yet. It has been mostly good news.
    --- Post Added -- Dec 26, 2016, ---
    Two good places to get info on bitcoin is https://www.reddit.com/r/Bitcoin/ and https://www.reddit.com/r/BitcoinBeginners/.
     
    ILJO likes this.
  2. Dimson

    Dimson Your tears don't fall...

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    I am going to invest in bitcoin when my money comes in. I was mining for a while but my house couldn't handle the heat or electric bill. Wish I could have kept it up.
     
  3. Miz

    Miz Badlands

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    I'm rooting for you Jokerthief! I don't know much about this bitcoin business but I hope you strike it rich!
     
    Trodden likes this.
  4. Trodden

    Trodden The autumn air Thickly fills my lungs So sweetly

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    Until hookers and weed dealers take bitcoin, I'll wait
     
    Dimson, Miz and MacEwen like this.
  5. jokerthief

    jokerthief No reason to get excited. Site Donor

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    We're well past that point.
     
    Dimson likes this.
  6. Dimson

    Dimson Your tears don't fall...

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    So joker, do you sell bitcoin too? or just acquire?
     
  7. jokerthief

    jokerthief No reason to get excited. Site Donor

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    I just buy and hold. Or as the bitcoiner's say, I buy and hodl.
     
    Dimson likes this.
  8. Dimson

    Dimson Your tears don't fall...

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    Ever tried mining?
     
  9. jokerthief

    jokerthief No reason to get excited. Site Donor

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    I got in way too late for that. Unless you can afford a warehouse and a shit load of computers, it's pointless for the individual to get into mining now.
     
  10. Dimson

    Dimson Your tears don't fall...

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    I was doing individual mining but I couldn't do with the heat issue in my house or the power it consumed.
     
  11. jokerthief

    jokerthief No reason to get excited. Site Donor

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    When did you stop?
     
  12. Dimson

    Dimson Your tears don't fall...

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    Right before it really took off. I think like a year or 2 ago?
     
  13. Poindexter

    Poindexter Reputation: ∞ Staff Member

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    What the hell is mining?
     
    Tapout likes this.
  14. Dimson

    Dimson Your tears don't fall...

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    Processing micro transactions.
     
  15. Miz

    Miz Badlands

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    [​IMG]
     
    Poindexter likes this.
  16. Dimson

    Dimson Your tears don't fall...

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    Close, but not quite.
     
  17. jokerthief

    jokerthief No reason to get excited. Site Donor

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    It's how bitcoin inflates. Every ten minutes a block is released with a reward for the first miner to solve. Right now the reward is 12.5 bitcoins. Every four years, the reward is halved; this is called the halving. The last halving was in July. Mining provides the bitcoin network the computational power it needs to maintain the ledger (called the blockchain) and keeps bitcoin moving smoothly.

    Each block is a puzzle that takes computing power to solve. The more miners there are, the more difficult the puzzle becomes. In the early days, people were making a lot of money running mining software on a laptop. But now it takes a huge amount of computing power to have a reasonable chance to solve a block. The mining network is larger than the top dozen or so supercomputers in the world. There is so much computer power behind bitcoin right now that it's impossible for any one person, organization, or government to get a stranglehold on mining.

    It's the largest decentralized computing system mankind has ever build on the internet. Bitcoin be like:
     
  18. Dimson

    Dimson Your tears don't fall...

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    I plan on investing pretty heavily(well for me anyways) in BTC soon. Still mad I didn't/couldn't keep up my mining.
     
  19. Poindexter

    Poindexter Reputation: ∞ Staff Member

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    That's some head-spinning shit right there.
     
  20. Dimson

    Dimson Your tears don't fall...

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    Just invest baby! Just invest!
     

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