What is Bitcoin?

JAdams....I appreciate your ability to read and regurgitate what you have read. However, as the link provided says..."However, it is (nearly) impossible for two people to have the same Merkle root because the first transaction in your block is a generation "sent" to one of your unique Bitcoin addresses. Since your block is different from everyone else's blocks, you are (nearly) guaranteed to produce different hashes. Every hash you calculate has the same chance of winning as every other hash calculated by the network."


This basically describes a batch queuing system which is very common in even the most basic use of super computing for the greatest efficiency of computational time.

Every person is preforming a different calculation which is only a portion of a larger calculation which is broken down by commonly generated hash marks (similar to how bit torrents are used in p2p networks.) If you produced the SAME hash, you would be performing the same calculation.

It is very clear that the exact same calculation is NOT being repeated. That would be a monumental waste of computational power.

Not trying to piss you off....as you seem to be taking this all a bit personal. But your explanation seems to be on level with a generic wiki level explanation. BY which I mean to say you are correct in what your read. However, the computational power that can be harnessed by this network is far greater than what is needed for such a network. That excess computational power has to be used.....perhaps a bit conspiracy theory....but it is enough computational power to break encryption possibly on level with the power of the NSA.

So, yes, I see what you say....which is what you read. But the power is too much for such a simple task.

I mean how many people would be so willing to "mine" for bit coin if they were told that their computer is being used to perform calculations of an unknown manner, for an unknown purpose, by unknown entities? Basically by downloading and installing the platforms for mining the bitcoin, you are installing a portal for which your computer can be interfaced by a remote computer and thus become a node in a what is essentially a super computing network that is decentralized which means the very expensive costs for hardware, cooling, upkeep, and power are not realized. Originally Posted by disilene

It's not a personal thing. I'm very familiar with the topic and have professionally advised upon it. Unfortunately a number of "armchair rocket scientists" have showed up to drop in their 0.02. If you clicked the previous links and fully understood the math and internationally standardized systems involved you would not have bothered to post your above reply.

I'm attempting to keep the explanations a bit simple so a larger number of people can understand it. When providing references to more technical or descriptive information (as requested) no one takes the time to read it or does not understand it.

Unfortunately people are inherently scared of things they do not understand and there is quite a large amount of people that do not understand how the back end of Bitcoin works.

Do you recommend it?

Do you recommend it? Originally Posted by chellachella

From a business perspective there may be some short term added benefits beside the obvious of accepting another payment type. Most any business or services that begins accepting Bitcoin may get a bit of free advertisement out of it and or attract new business from patrons who are seeking out places to spend their Bitcoins with. Several news outlets world wide picked up on agencies that now accept Bitcoin.

A quick search of eccie for bitcoin only resulted in a single provider having it mentioned in her ad. She may be able to point out the pros and cons of accepting Bitcoin in this industry.

I believe as a currency it shows promise. Who knows how far it will go or if it will go away in a year or two. Those not well versed in it and are interested in accepting it, should try to think of it like accepting another currency such as Pesos. You're going to have to go through an extra step to convert them to dollars. If you find a retailer that will sell you the goods/services you desire for Bitcoin, that does make things easier. One way of converting Bitcoins to retailer usage without going to dollars or a bank account is by converting them directly into Gift Cards with Gyft.com or Bitcoinsaresexy.com.

I see little to no risk for businesses as they are able to instantly charge at the current exchange rate and in just a couple of minutes convert it to dollars. If someone contacts the business I'm with and wants to pay with Bitcoins I'm certainly not going to turn them down.

….there is quite a large amount of people that do not understand how the back end of Bitcoin works. Originally Posted by JAdams

I certainly don't understand it but I think my summation stated earlier is basically what is happening.

In the real world, governments issue currency as "legal tender" which is accepted in that country and can be converted to other currency based on the value at that time.

When a person works, provides a service or sells a product they are paid with that particular currency for their work, service or product.

There is no work being done by humans to produce this magical currency. A computer generates a fictitious problem and then solves that problem and people agree that "work" has been done and rewards the owner of the computer (that actually did all the work) with fake currency.

It's completely absurd.

On that note, any providers willing to accept Monopoly money for sessions please send me a PM. I hear it's the next big thing in the currency market and the value will increase dramatically after our session.

I certainly don't understand it... Originally Posted by pornodave69

This much is blatantly obvious.
Educate yourself or stay ignorant forever. For those that are looking for useful information about Bitcoin please read back through my previous posts in this thread.
If you would like to see world government currencies being exchanged to Bitcoin in real time then check out this link.

This much is blatantly obvious.
Educate yourself or stay ignorant forever. For those that are looking for useful information about Bitcoin please read back through my previous posts in this thread. Originally Posted by JAdams

I've read it. It makes no sense. It may as well be written in Chinese. Maybe since you're the Mr. Know-It-All you can explain it in plain English instead of linking to everything any dufus can find with Google.

I've read it. It makes no sense. It may as well be written in Chinese. Maybe since you're the Mr. Know-It-All you can explain it in plain English instead of linking to everything any dufus can find with Google. Originally Posted by pornodave69

1. Because you're not paying me for my professional time to explain it to you.
2. Because it has already been written several times across the internet and is accessible for free.
You're just too lazy to do the required reading. Here is an "Explain it Like I'm Five" for Bitcoin. Grow up.

Google wrote earlier today that they are working to incorporate Bitcoin into their payments system.
Bitcoin was on the front page of USA Today due to Vegas Casinos beginning to accept it.

1. Because you're not paying me for my professional time to explain it to you.
2. Because it has already been written several times across the internet and is accessible for free.
You're just too lazy to do the required reading. Here is an "Explain it Like I'm Five" for Bitcoin. Grow up.

Google wrote earlier today that they are working to incorporate Bitcoin into their payments system.
Bitcoin was on the front page of USA Today due to Vegas Casinos beginning to accept it. Originally Posted by JAdams

In other words, you can't explain it you can just Google it and copy and paste. Got it. Thanks.

In other words, you can't explain it you can just Google it and copy and paste. Got it. Thanks. Originally Posted by pornodave69

Of all people, you do not have it.

The protocol isn't the problem. It's the generation of "currency" through the process of mining that is the problem. They're making "money" out of nothing for doing no work to earn it.

This is probably the best explanation I've see so far on how the whole system works, but it still lacks in explaining the mining and creation aspect of the currency.

http://bitcoinmoney.com/post/6309770...-hood-by-scott

if you don't have a basic understanding of how they operate none of it makes any sense. this is a very good article about how you can mine for them on your own. it's like gold, but has no backing. you get into these websites but there is no legal way to make the owners give you what you have found. if you mine for gold, they pay you for the gold or you can keep it. with bitcoin, you can easily get screwed.

dave. the article explains that there are x amount of bitcoins in the world. don't know about anything being created beyond that. i was under the impression that when they were gone, they were gone.

http://www.cnbc.com/id/101332124

Food for thought:

Bitcoin's Mt. Gox Goes Offline, Loses $409M -- Recovery Steps and Taking Your Tax Losses

http://www.forbes.com/sites/cameronk...ur-tax-losses/

I was wandering when someone was going to mention this! When I saw it, I'll admit to thinking to myself "Whew. I dodged a bullet!"

Or something like that. Not sure what it actually means at the end of the day but it doesn't look good.

There is a need and/or desire, obviously, for this type of currency. If Bitcoin doesn't stick, I wouldn't be surprised to see other types of online currency work out.

Hhhmmmmm. I have a bit of a criminal mind. I wonder if I could create MY own type of online currency?

Elisabeth gold coins. I wonder who should I get to design them?

http://www.palmbeachdailynews.com/ne...oin-fad/nd8MM/

Excerpts:

Bitcoin, the virtual currency that caused a sensation when it hit market highs exceeding $1,200 for a single bitcoin late last year, was getting only about half that price late last week.
Among the catalysts: the collapse of the largest bitcoin exchange, Tokyo-based Mt. Gox, taking with it some $480 million worth of the controversial online currency.
That followed the arrest and arraignment of former Bitcoin Foundation Vice Chairman Charlie Shrem on federal charges of conspiring to launder the currency….

However, bitcoin users are learning the hard way that, unlike U.S. dollars, bitcoins are not backed by the “faith and credit” of any central government if something goes wrong. Lawsuits already are flying against the bankrupt Mt. Gox exchange.

The bitcoin story gets even eerier as Autumn Radtke, the young American head of a bitcoin exchange firm, First Meta, was found dead in her Singapore apartment recently.

“Due to Bitcoin’s anonymity, the virtual market has been extremely susceptible to hackers and scam artists stealing millions from Bitcoin users,” Manchin wrote. “Anonymity, combined with Bitcoin’s ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.”

Greenfield says although the Palm Beachers didn’t buy their bitcoins through Mt. Gox, the exchange’s failure highlights what’s wrong with the virtual system: “You have these largely unregulated dealers, brokers and exchanges, and it’s scary….

“The whole concept of bitcoins being mined is silly!” Greenfield declares. “Ultimately, what’s to stop somebody with a very sophisticated computer (from starting to issue and sell) bitcoins?”

http://www.euronews.com/2014/03/05/a...es-on-hackers/


After the collapse of Mt. Gox, now Canada-based virtual currency exchange Flexcoin has been forced to close down.

Flexcoin said flaws in its software code enabled hackers to make off with bitcoins worth around 440,000 euros.

“As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately,” it said in a statement.

A message posted on its website explained that the attack had exploited a flaw in its code on transfers between users and involved inundating the system with simultaneous requests to move coins between accounts.

“Flexcoin has made every attempt to keep our servers as secure as possible, including regular testing,” it said, adding it had repelled thousands of attacks over the past few years. “But in the end, this was simply not enough.”

The firm said it is working with law enforcement agencies to trace the source of the hack.

Not all has been lost; it will return to owners bitcoins that were held in computers not connected to the internet and which could not be raided.

Mt. Gox, once the world’s dominant bitcoin exchange, also blamed hacking for its losses. It has filed for bankruptcy protection in Japan and said it may have lost some 850,000 bitcoins due to hacking.

One bitcoin was valued at about $658 (480 euros) on Wednesday, according to Bitstamp, one of the largest exchanges for trading bitcoins.

Japan looks at bitcoin regulation

Japan will this week set out rules on how to handle bitcoins. It is the first sign that the government is taking action on regulating the virtual currency after the collapse last week of Tokyo-based Mt. Gox.

The cabinet will decide on Friday how to treat bitcoins under existing laws, people familiar with the matter told Reuters.

The sources said banks and securities firms will not be able to handle bitcoin as part of their main business, suggesting the virtual currency will be treated more as a commodity, like gold.

Japan has struggled to define its approach to bitcoin since the collapse of Mt. Gox.

The authorities there are also looking at possibly taxing bitcoin transactions, but it remains unclear how they could do this, given that one of the attractions of using bitcoin is that transactions are largely anonymous.

‘Consumer protection legislations needed’

“We haven’t yet thoroughly grasped the situation, but some kind of regulation is needed from the perspective of consumer protection, and we will also discuss (bitcoin) from the perspective of imposing an asset tax,” said Takuya Hirai, head of an IT panel in the ruling Liberal Democratic Party.

The panel heard on Wednesday from consultant Deloitte about bitcoin and from officials of the Consumer Affairs Agency, the Financial Services Agency (FSA) the Finance Ministry, central bank, Cabinet Office and the National Police Agency about the Mt. Gox collapse, Hirai told reporters.

The FSA and the Finance Ministry have said bitcoin is not a currency and doesn’t fall under their purview, while the Bank of Japan has said it was studying the bitcoin phenomenon with interest.

Hiroshi Mikitani, a prominent Japanese e-commerce billionaire and CEO of Rakuten Inc, expressed caution about trying to regulate the virtual currency. “They should not act hastily,” he said, according to Kyodo News. “As for whether we need regulations, they should first examine the situation a bit more and discuss it in depth.”