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Can someone explain this Bitcoin phenomenon?


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#16 +zhiVago

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Posted 18 November 2013 - 11:02

Unless you're this guy, forget about it.

 

http://www.theguardi...orway-oslo-home

 

Its value has nearly doubled since this article was written 2.5 weeks ago...




#17 DrScouse

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Posted 22 November 2013 - 08:41

I had about $30 worth of bitcoins last time I check a few months back.. thought id have another look, and now have $180!  really don't understand.. but don't know whether to spend it quickly or leave it alone and see what happens...

 

Just read above article!!.. think I may leave them!! afterall, Id only have lost $30 if it crumbled (which actually was left over from when Id originally only actually bought $20 but had increased to $80, so I spent $50   -  wish I hadn't now!)



#18 heslo

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Posted 22 November 2013 - 08:46

I had about $30 worth of bitcoins last time I check a few months back.. thought id have another look, and now have $180!  really don't understand.. but don't know whether to spend it quickly or leave it alone and see what happens...

 

Leave it. It will go higher



#19 DrScouse

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Posted 23 November 2013 - 08:32

$221 today!

 

Just need to find the best way to cash them in otherwise they aint really worth anything!



#20 OP riahc3

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Posted 24 January 2014 - 09:43

Hello,

Just made this thread in November. People did not like Bitcoin back then but now:

http://www.neowin.ne...ayment-services

A mayor company is THINKING about backing it :)

#21 The_Decryptor

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Posted 24 January 2014 - 10:07

No, bitcoin is still just as stupid.

#22 InTheSwiss

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Posted 24 January 2014 - 10:10

People have a lot of love or hate for BitCoin so it can be hard to find an unbiased opinion on it. I will try my best to be as unbiased as possible.

 

Think of a bitcoin as like a diamond. Now a diamond is just a rock. What makes them worth millions of dollars? Well simply the fact that people want them because to them they are pretty and valuable. BitCoins are not really any different. People attach value to all kinds of weird things which are only valuable because other people think they are too. That is the basics of how a currency works.

 

So how does it all work then? Well BitCoins are made by mining. What is meant by mining? Basically it is a maths problem that requires more and more and more processing power to calculate after every iteration. There are a finite number of bitcoins possible. Just like there are a finite number of diamonds in the world. This is why bitcoins can be split up into smaller amounts. Like how a 1 caret diamond can be split up into hundreds and thousands or smaller stones or like how a dollar can be split up into cents.

 

Essentially a bitcoin is only worth what other people feel it is worth just like all currencies. Say I have a book. Let's say it is the first Harry Potter book and I want to sell it. I can accept $5 for it. The reason I accept $5 is that is how much it is worth to me. I can take that $5 and use it to purchase something else. Perhaps I use it towards my rent or my electricity bill. I have essentially turned that Harry Potter book into a unit of electricity to keep my lights on. Now lets change that $5 for say 1 bitcoin because lets imagine that people value 1 bitcoin at $5. This means that I am happy to exchange that Harry Potter book for 1 bitcoin so you give me 1 bitcoin and I give you the book. Now I can use that 1 bitcoin to pay the electricity company to keep my lights on for the same amount of time as I would get if I paid them $5.

 

Anyway that is the basic principle of bitcoin. It is only actually worth as much as other people feel it is worth and if people are willing to exchange it for other things just like how diamonds would be worthless if nobody else cared for them similar to how nobody will give you a house in exchange for a rock you find on the side of the road but might give you a million dollars for a diamond of the same size/weight as that road side rock.

 

As for the other parts of bitcoin they are more technical parts of the system which limit how quickly bitcoins can be mined, how they are transferred, etc. If you want to know more about it I am happy to help you understand but it sounds more like you wanted to understand why these virtual coins are worth anything in the first place rather than how the whole system works :)

 

Hope that helps a bit! Let me know if you want me to clarify anything.

 

Edit: I would like to add that while I find bitcoin very interesting I don't and have not ever owned any bitcoin so while it interests me I have not actually ever made any investments with it. That isn't to say I believe it is stupid, I don't own any diamonds either but that isn't to say diamonds are a stupid investment ;)



#23 psionicinversion

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Posted 24 January 2014 - 10:30

Hello,

(First off, yes, I know this exists: http://en.wikipedia.org/wiki/Bitcoin )

Im just read the front page article about a motherboard being able to "mine" Bitcoins but can someone, who uses Bitcoins, explain the function of it. Why it exists, how do you use it, what is currently compatible, etc.....

Heard very few of it. I thought it was a WoW thing...

 

The problem with bitcoins now is that they are very hard to mine for someone just getting into it cus there are cards that do 300Gh/sec and soon cards that do 600Gh/s but the 600Gh/s one will be like $3000 or $4500 i think but so many people will be running multiple machines, your best bet is to mine Litecoin, AMD cards are very good at this its the reason why 7950's upto 280x's think the 290's are good at it to have jumped in prices cus lots of people are buying them.  

 

Ive looked into it and apparently for it to be worth while you have to be doing it for like 1 year minimum i think. Some people have gotten like there £10-15K investment in hardware back after a few months but they might be the clever ones or theyve invested in enough crunching power to find the coins faster than other people. You cant use bitcoin asics to mine Litecoin and its altcoins (alternate coins) cus its a different script it uses. Litecoin asics are slowly coming out so within 1-2 years or so AMD gpu mining will be dead if they can keep up with demand.  If you do get into it ive heard its best to mine the alt coins while the difficulty is easy when they first come out then change them into litecoins. They only need a PCIe 1x so get a board that can fit 5 cards in and load them up with GPU's, the fan will be needed to run at 100% cus the GPU's will be running at 99-100% load and you need it to be running 24/7 really.  Each Block size your computer crunches downloads in 6GB chunks... on the plus side of this if youve got a flat you wont need to spend any money on heating cus the rig will heat your flat up no problem!!!

 

Oh and the coin wallets when you make one generate a key so you need to keep it safe and not lose it cus once you leave the page its gone and is non retrievable so you best uploading to a storage locker/cloud storage, USB keys etc



#24 Nick H.

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Posted 24 January 2014 - 10:37

My overall thinking: Bitcoin is silly. I know and have talked with people that have used it for practical - albeit nefarious - purposes, and I can see its application. But I'm not going to be an early adopter with something like currency, I'm going to hold back and see how it plays out. Sure, I'll miss out on potentially making a killing, but the keyword there is "potentially."

#25 InTheSwiss

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Posted 24 January 2014 - 10:43

My overall thinking: Bitcoin is silly. I know and have talked with people that have used it for practical - albeit nefarious - purposes, and I can see its application. But I'm not going to be an early adopter with something like currency, I'm going to hold back and see how it plays out. Sure, I'll miss out on potentially making a killing, but the keyword there is "potentially."

 

This is a sensible decision in my opinion just like all investments if you don't have the money to lose then you don't have the money to invest. Lots of people invest in lots of things that never make any money and lots of people invest in crazy things that make loads of money. If people knew what would and wouldn't fail then we would never have people losing out from their investments.

 

I am personally of the opinion that crypto based currencies will become hugely popular in the future however I am not sure if bitcoin is the currency in which that will happen. Who knows tho I am not an economics and currency expert :)



#26 SiCKX

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Posted 24 January 2014 - 11:09

What about Coinye and Dogecoin? :D

First one is supposed to make a comeback after K. West had beef with it.

 

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#27 Nick H.

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Posted 24 January 2014 - 11:17

What about Coinye and Dogecoin? :D

Now here is where I start to get confused. Bitcoin was the starting currency, but how do things like Litecoin and Dogecoin factor in to it? Are they entirely separate currencies, or are they linked in some way? The reason for asking is sort of explained in my post above - if they are entirely different then it requires backing and acknowledgement from the world in order to be worth anything. Again, such reasons are why I'm holding back for now.

#28 InTheSwiss

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Posted 24 January 2014 - 11:31

Now here is where I start to get confused. Bitcoin was the starting currency, but how do things like Litecoin and Dogecoin factor in to it? Are they entirely separate currencies, or are they linked in some way? The reason for asking is sort of explained in my post above - if they are entirely different then it requires backing and acknowledgement from the world in order to be worth anything. Again, such reasons are why I'm holding back for now.

 

They are totally different and nothing to do with bitcoin other than similar names and also being a crypto currency. It is like dollars vs. euro. Both are available as paper money (and you can exchange between them if you have somebody willing to do the exchange) but otherwise they are totally different. While they do hold a monetary value (because people are willing to exchange real money for them) they are mostly just a joke playing on memes. It gets a little confusing because, like everything, they can be worth something (such as $30k worth of dogecoin being raised for the Jamaican's bobsleigh team or something like that) but they are mostly a joke. 

 

The two main "coins" are bitcoin and litecoin.



#29 The_Decryptor

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Posted 24 January 2014 - 11:31

They're unrelated, but share a common base idea (But Dogecoin and Coinye were created to make fun of Bitcoin)

Edit: Don't think of Bitcoin as a currency (Because it's terrible as one), think of it like stocks.

#30 +MikeChipshop

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Posted 24 January 2014 - 11:55

No, bitcoin is still just as stupid.

 

Maybe you think so, but i beg to differ.

 

Think of it as an un-secured savings account. Every year i put my taxes in to a savings account or bonds till pay time comes. Last year i put it in BTC instead just to see what would happen. This year i've paid my taxes, taken out a profit of the same amount as the taxes and still have enough to pay next years taxes. 

 

If i had left that in the savings account i would have made virtually nothing on it.

 

Buying BTC is basically buying shares in a currency. As with all stocks and shares, there's a risk attached.

Now is a pretty good time to buy in as many countries and companies are looking to start accepting it (WalMart for instance have expressed an interest and if they follow through that's a big deal) and even HMRC has showed intent to re-classifying it as a private currency, effectively legitimising it in the UK.

 

ProTip: Don;t bother buying your own hardware, mine in the cloud.