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Can someone explain this Bitcoin phenomenon?


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#31 MikeChipshop

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Posted 24 January 2014 - 11:59

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.

 

a lot of the Cryptocurrencies use the same hash so if you're mining for one you can mine for the others using no more processing.




#32 Mark

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Posted 24 January 2014 - 12:33

I guess what I don't understand is, why did something that some guy invented which is technically just a concept (well, as is money in general in a way) gain value?

 

More specifically, day one, someone mined a bunch of bitcoins. How did it go from being totally worthless, to being worth thousands?



#33 Anibal P

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Posted 24 January 2014 - 13:04

I guess what I don't understand is, why did something that some guy invented which is technically just a concept (well, as is money in general in a way) gain value?

 

More specifically, day one, someone mined a bunch of bitcoins. How did it go from being totally worthless, to being worth thousands?

 

Drug trading and the Grey/Black market, without those all these cryptoripoffs would have faded into oblivion like most bad fads do 



#34 InTheSwiss

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Posted 24 January 2014 - 13:19

Drug trading and the Grey/Black market, without those all these cryptoripoffs would have faded into oblivion like most bad fads do 

 

While it is certainly true that bitcoin is used a lot for illegal things actual cash is still used a million times more but that does not mean cash is worthless. Bitcoin isn't any more anonymous than actual cash when you look at the technicalities of them both. Cash has no transactional history, etc. Every month we are seeing more places being to accept bitcoin as a form of legitimate payment.

 

However yes without the illegal uses of bitcoin it probably would not have taken off as much as it has. Writing off bitcoin as something only used for illegal things is unfair though as it is only used by a small percentage of people for such things.



#35 xendrome

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Posted 24 January 2014 - 13:30

I think the problems I have with this is.

 

1: Currently it's going to cost you more in hardware, time and electricity then you are going to make back in the same amount of time mining vs electricity costs.

 

2: Ok so I have this thing, it's worth something apparently, but I can't buy stuff I want or need. That just doesn't make sense to me.... if someone gave me $100 of shredded wheat coins, and I can go buy $100 worth of shredded wheat... what good does that do me, now instead of having $100 in bit coin, I have $100 worth of shredded wheat sitting in my house that I neither neede or wanted. Now I have to spend the time trying to off-load that onto someone else. Not even worth bothering with.



#36 Mark

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Posted 24 January 2014 - 14:00

Drug trading and the Grey/Black market, without those all these cryptoripoffs would have faded into oblivion like most bad fads do 

 

But for the drug trading to begin, the currency had to have some value to begin with, what I mean is, how did it gain value to start with? (Sorry if this is a stupid question, I still honestly don't get it!)



#37 cork1958

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Posted 24 January 2014 - 14:18

First you generate a random number, then somebody else says "Yep I like that number", so you both agree it's worth something.

Then you use it to buy drugs from Silkroad because that's all it's used for.

 

I've heard of bitcoins but never really looked into it.

 

Knew it was something dumb, or strictly fanboy related though, and nothing I wanted!



#38 +Bamsebjørn

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Posted 24 January 2014 - 14:20

My charity now accepts bitcoins. I've received about 680 euros in bitcoins in the past week.  :D



#39 ramesees

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Posted 24 January 2014 - 14:23

But for the drug trading to begin, the currency had to have some value to begin with, what I mean is, how did it gain value to start with? (Sorry if this is a stupid question, I still honestly don't get it!)

 

The currency is given value due to the limited number of coins that can ever be produced - 21 million total for BitCoin.

 

But like all fiat currencies it is only given value because people say it does. In the case of fiat currencies (the US Dollar, British Pound etc..) the respective government make assurances about its value and banks and other countries and businesses around the world agree to use it for currency transactions.

 

These currencies used to be backed by gold, but that went the way of the dodo a long time ago.



#40 +Bamsebjørn

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Posted 24 January 2014 - 14:30

I think the problems I have with this is.

 

1: Currently it's going to cost you more in hardware, time and electricity then you are going to make back in the same amount of time mining vs electricity costs.

 

2: Ok so I have this thing, it's worth something apparently, but I can't buy stuff I want or need. That just doesn't make sense to me.... if someone gave me $100 of shredded wheat coins, and I can go buy $100 worth of shredded wheat... what good does that do me, now instead of having $100 in bit coin, I have $100 worth of shredded wheat sitting in my house that I neither neede or wanted. Now I have to spend the time trying to off-load that onto someone else. Not even worth bothering with.

 

You can spend your bitcoins to buy steam codes: http://www.steamloader.com/

 

In some countries you can now order food with bitcoins. (http://www.thuisbezorgd.nl/ - http://www.takeaway.com/)

 

You can use Bitcoins in some big online shops: http://www.overstock.com/

 

You can buy/rent dedicated servers, buy domain names, pay for many other online services. There's more than plenty of ways to spend your bitcoins.



#41 Geoffrey B.

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Posted 24 January 2014 - 14:46

the only thing i have ever bought with BTC is the latest Humble Bundle X :D