What in the Name of Zeus is Bitcoin?

http://www.linuxvoice.com/bitcoin/

by AndrewGregory • 12 years ago

80 25 12 years ago

jordigh• 12 years ago

I like the last box. "What is money?" I think it highlights that we don't really understand ordinary money, let alone bitcoins.

mcdougle2• 12 years ago

Yeah, I find that most people really don't know what money is. They think the cash in their hand has some sort of intrinsic value, but can't explain it (and don't want to think about it). I know I was like that until I graduated from school and started thinking about (and researching) investing.

josu3• 12 years ago

This is a genuine question. What do you think that money is? Because I have also asked myself that question, and I have read about it, but I don't seem to be able to give a definite answer.

josu3• 12 years ago

The box is not completely accurate though. When it says:

On the negative side, there is no one to step in and help stabilise it should things start to go wrong (for example, the various governments that printed more money to help ease the cash flow crisis in the ‘Credit Crunch’).

There are other mechanisms that don't involve the printing of money in order to stabilize the economy. However, it is true that increasing or decresing the amount of money in circulation is a very simple way to do it. For example, bitcoin could live along with government backed money, like the greenbacks were in use at the same time as gold-backed money.

In practical terms, the biggest difference between Bitcoin and most other currencies at the moment is the wildly fluctuating exchange rate.

This is true right now due to the fact that the whole bitcoin economy is worth only a few billion dollars, but if bitcoin succeeds in becoming the world's currency it will most likely fluctuate less than any other currency.

MrBra• 12 years ago

Could it be possible such a thing of a world's single currency? What is the subject that I should study to understand all of this and stop asking a question like that? Finance? Economy? What branch of those? Thanks for answering or for just considering doing it.

VMG• 12 years ago

Pretty good overall, some notes though

It’s also possible to get wallets that are hosted online, for example, at blockchain.info

Strictly speaking their claim is that they're only hosting the encrypted version. Whether that's the case and the client doesn't phone home is difficult to tell.

thegeomaster2• 12 years ago

Although I really love crypto and innovative solutions with it, I am a little embarrassed to say I've never actually put a lot of effort into understanding how Bitcoin and other cryptocurrencies work under the hood. This article has pretty much cleared it for me (although I'll surely refer to Satoshi's original paper for some further clarification). Nice read.

Somewhat unrelated---I didn't know that the original Bitcoins were not spent! That's really strange to hear; I can hardly imagine a person resisting the urge to cash them in at some point (whatever the reason of resistance). Crazy stuff.

btczeus5• 12 years ago

"cash them"? I think you meant "spend them". Remember bitcoin is money, why convert it to another form of it? How would you "cash out" bills? Convert them to gold? The "What is money" section of the article taught you nothing?

yen223• 12 years ago

Can't blame him. Almost everyone who talks about Bitcoin talks about it as a speculative asset, instead of a currency. People are too fixated on the fact that its price in USD jumped a lot.

UweSchmidt• 12 years ago

I guess "cash them" means "turn the speculative good into money".

The "What is money" section seems to agree (when leaving out the word "only"):

"The real difference between Bitcoin and a national currency is that national currencies are backed by governments, whereas Bitcoins aren’t really backed by anyone other than the miners."

So, the thing that is backed by governments is money, the other thing is not.

thegeomaster2• 12 years ago

Sorry, it was a slip of tongue and has to do with the meaning of equivalent words in my native language---what I meant to say was closer to "exchange them for a form of money you can buy a yacht with." Not sure why the hostility, though, we are all wrong sometimes.

josephagoss• 12 years ago

Satoshi most likely has a stash of several thousand Bitcoin that were mined using a standard miner without their tell-tale finger print. (Something about the odd nonce distribution with Satoshi's coins gives away his main set.)

Also when Satoshi left the development team in 2010 he could've been mining normally like everyone else, and he could have easily amassed 10,000+ Bitcoin in that time without it ever being linked to his early 1,000,000 coins.

I think it's likely Satoshi has cashed out millions of dollars worth of Bitcoin, just not from the pile of coins everyone is watching.

btczeus5• 12 years ago

I bet Satoshi lost his private key

mateuszf• 12 years ago

That's a very nice introduction for hackers: https://www.youtube.com/watch?v=Bhe61JaNFLU&index=2&list=PLz...

btczeus5• 12 years ago

Stock price graphic plots should always use logarithmic scale. Spot the difference: http://bitcoincharts.com/charts/bitstampUSD#rg60zczsg2012-01...

Avalaxy• 12 years ago

Not necessarily stock prices, but exponential growth. Not all stocks grow exponantially.

btczeus5• 12 years ago

It's not about the rate of the growth. It reflects better percentage movement (that's what's important). Nominal movements in price are meaningless. Really. Thing about it. A 100% growth at $10 is the same as 100% growth at $100 if you want to calculate revenue but it is not reflected as that in a linear scale.

chollida1• 12 years ago

I'd disagree.

Plot MSFT US Equity over the past 10 years and tell me how a logarithmic scale on the y axis would improve over a regular y axis?

Most stocks don't grow logarithmically, especially over shorter periods of time.

Not to go all appeal to authority, but Bloomberg and Reuters, the two top names in financial information show their charts using a regular, non logarithmic scale. If you think logarithmic is always better you should take it up with them:)

EDIT, the link below actually illustrates my point as it says that logarithmic is good for large jumps, which as I mentioned, don't usually happen over the time periods that people view returns.

btczeus5• 12 years ago

Well then think again. http://stockforecast.wordpress.com/2010/03/05/using-logarith...

So you say a jump from $30 to $31 is equal to a jump from $3 to $4. I thing that is misleading.

When price jumps are small the error also gets small, but it is still there.

Anderkent• 12 years ago

It says they show 'both big and small' changes acurately, not that it's good for large jumps.

apaprocki• 12 years ago

A Bloomberg terminal lets you display anything you want in logarithmic scale if you so desire.

sarciszewski• 12 years ago

I gotta be honest, when I read the title, I thought GameOver Zeus not the Greek god.

What in the Name of Zeus is Bitcoin?

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