Bitcoins

BoracicLint

kingrulzuk wrote: »

Well don to people who bought the bitcoin and made the money

Wish someone had told me a year ago

Still plenty of opportunities to get on board, I think we're still very much in the early-adopter stage of development.

Cotta

BoracicLint wrote: »

Its the digital version of shovelling for gold! Each transaction is entered into the public ledger (the blockchain) and must be verified by a miner using their computer to solve a complex cryptographic algorithm.

Whoever solves each block is rewarded with a number of coins (currently 25 per block of transactions).

Unfortunately the mining power of the network is so advanced, one man and his machine doesn't stand much chance of mining anything, so mining pools were setup where people combine their mining power and split the proceeds.

Miners are ensuring the integrity of the network and verifiying transactions by solving the complicated mathematics. In return they are awarded with coins.

So miners ensure that all transactions are genuine?

BoracicLint

Cotta wrote: »

So miners ensure that all transactions are genuine?

This is where confirmations comes in. If I send you a Bitcoin, you get instantly notified that I'm trying to send you a coin. This is then entered into the blockchain as a transaction and miners compete to solve the algorithm which verifies it. Once the problem is solved, this would be classed as a first confirmation.

Subsequent miners then test the 'hash' (an input which solves the cryptographic algorithm) that the first miner came up with, and confirms whether or not it is correct. With each confirmation, there is greater probability that the transaction is genuine. After 6 confirmations, the transaction is fully verified.

Jegersmart

Cotta wrote: »

So miners ensure that all transactions are genuine?

Yes, as well as ensuring that new BTC's are generated until the finite number is reached.

Whilst I mine myself, I do not mine BTC's as this requires specialist "ASIC" chip hardware, and also the "difficulty" level on the netwrok is so high now that pretty significant "hashrate" is required to make it economically viable. Other types of "scrypt-based" coins can be mined with "normal" GPU's however but whether this turns out to be economically viable or not remains to be seen - mostly because one cannot foresee what the future value of such "coins" will be in relation to BTC?LTC or even normal fiat currencies. For me it is more an experiment and a challenge in learning how to build such a "rig" and how the mining process works through pools. In addition, trading the coins through exchanges is something new which I have enjoyed so far.

Plenty of stuff on the internet to read up on.

J

paddyrg

DJBenson wrote: »

Anybody know what's upset the market today? Prices have plummeted again to ~$700 - took advantage and bought 12 BTC mind :rotfl:

TBH I think the answer to that is 'irrationality'. The exchange value is largely disconnected from world events which is what makes BTC great (if risky?) for speculators but it really undermines it as a credible long-term store of value. As a triangulation for other currency exchanges it's largely unimportant.

JohnRo

The price is what has generated a lot of interest and sucked in people who perhaps didn't ought to be anywhere near it at this stage. Clearly though people are free to do as they please in the free btc market, which is how it should be.

The measure that matters most is adoption and that's progressing globally, the price in fiat tickets is a bit of a distraction in some ways though obviously a vitally important aspect for short term trade and speculation.

Long term things look a lot better than the short term wild swings at every bit of perceived good or bad news.

https://bitcointalk.org/index.php?topic=328186.0

It's anyone's guess what will actually happen of course, that chart looks a bit optimistic to me but so was $1K a year ago, it could just as easily get nailed to the floor if the cleptocrats get their collective act together and coordinate a global effort to close btc down and protect their pyramids.

DJBenson

I bought 24 hours too soon it seems, had I bought today, I'd have got £1000 worth more of BTC for my money, or to put it another way, I am down £1000 on my "investment" :eek:

p.s. my use of "investment" is slightly tongue-in-cheek.

sabretoothtigger

China is banning the automatic exchange of btc for their currency. Not surprising as China stops free use of its money internationally, as did UK 50 years ago.

I guess it'll recover as private people can still swap between themselves for the RNM to BTC but it does reduce the large amounts being done. Its supposed to be a peer to peer transfer currency so I dont see its a big end

Satoshi

sabretoothtigger wrote: »

China is banning the automatic exchange of btc for their currency. Not surprising as China stops free use of its money internationally, as did UK 50 years ago.

I guess it'll recover as private people can still swap between themselves for the RNM to BTC but it does reduce the large amounts being done. Its supposed to be a peer to peer transfer currency so I dont see its a big end

What if other countries clamp down on crypto like China? Or what if they go further and make it illegal to use bitcoin? Like they have done with gold and silver in the past.

JohnRo

It's a fair question. At some point the money barons will probably force politicians to assist in trying to close it down if they can't figure out or force their own corrupt versions or a way can't be found for them to reliably extract their pound of flesh from a democratic crypto like btc and keep themselves in the luxury they're used to.

For authoritarian !!!! holes like china restrictions like that are a lot easier to impose than in the west where democracy and freedom are still held in some regard by some sections of the population.