Crypto currency mining

[moltuae]

Originally Posted by Regulus

Have you read about the spoofer in bitcoin?

http://www.zerohedge.com/news/2017-0...-bitcoin-price

I have not taken the plunge into crypto currency yet.
As this thread shows, it's so complicated on many levels. And to add to that, I am worried that the government will place stops in the system to make sure they can tax me. Or even make it illegal.
I have no plans to start mining. But I would like to buy bitcoin. But through buying or selling bitcoin with fiat currency, my transactions will not be anonymous, right?

The ZeroHedge article, while recently published, is largely focusing on the events of 3 or 4 years ago, in particular events immediately before and after the collapse of Mt. Gox, at a time when the BTC daily trading volume was just a few million Dollars. While some amount of price manipulation undoubtedly still occurs, with the daily BTC trading volume now approaching 2 billion Dollars, you'd need to have very deep pockets indeed to make a significant impact on the price.

Bitcoin's price still gets pushed around a lot though by both negative and positive news, misinformation and FUD, which all contribute to price volatility. Such volatility should reduce over time however as greater adoption adds more inertia. Scarcity, exponential growth and adoption are what will ultimately dictate the price. About 16.5 million Bitcoins have been mined so far. By the time we reach the 21 million limit (in a little over 120 years time), I would guess that the amount of Bitcoin actually in circulation would be less than half that value, mainly due to 'lost' coins. If adoption continues on its exponential curve, that's not a lot of coins to share between several billion people. If you do the maths, you can see why there are a lot of bullish predictions, suggesting that widespread adoption as a worldwide currency could see a single Bitcoin worth hundreds of thousands (or possibly even millions) of Dollars within the next 5-10 years, especially when you consider the irreparable state of the global 'fiat' economy.

Trading fiat currency for cryptocurrency is not anonymous because the banks, exchanges and any financial institutions that deal in fiat currencies have to adhere to KYC and AML laws. Bitcoin itself is pseudo-anonymous: All transactions on the blockchain are publically viewable/verifiable but it's not possible to know who those transactions belong to without a lot of detective work and some initial 'clue' or path to follow, such as obtaining private fiat trading information from an exchange. Bitcoin is that way by design. Some cryptocurrencies are designed to provide complete anonymity.

Originally Posted by Regulus

Besides. I am not wholly convinced this is not a ploy to get us all to fully accept digital currencies, and drop cash altogether

A ploy by who? Bitcoin is built on open source software (that can be examined by anyone) and is a distributed, decentralised network that requires a high degree of consensus for any changes to be made. Unlike fiat currency, nobody is running the show.

If anything, Bitcoin is the people's own replacement for cash. It allows person-to-person trading just like cash, to or from anyone in the world, even if those people are some of the unfortunate unbanked billions. Recent events such as the Indian banknote demonetisation, an attempt by the Indian government to forcibly remove some of the country's cash from circulation, caused a lot of the Indian population to flock to Bitcoin. Then there's countries like Venezuela, where people are using Bitcoin as a cash replacement to escape the economic crisis of their own currency.

As for making Bitcoin illegal: You can outlaw it but you can't stop it (short of turning off the national/global internet). The knee-jerk reaction of some governments was to ban it, but most have reversed their decisions or attempted to regulate it instead. What I think most governments eventually come to realise is that banning cryptocurrencies does nothing to help 'fiat flight' but instead excludes the country from a growing global economy. In some countries, like Japan, the government have decided to embrace it and recognise it as a legal currency to put them ahead of the game.

[MikkiJayne]

Just found this

https://www.youtube.com/watch?v=D4EzEZdwAzg

[moltuae]

Originally Posted by MikkiJayne

Just found this

https://www.youtube.com/watch?v=D4EzEZdwAzg

Good one!

Originally Posted by Regulus

I know it's open software, but it was created by some individual or group of individuals, right? who use a Japanese sounding name. Anyhow, nobody knows who it was as far as I understand.

No. It's developed, maintained and tested by a large number programmers and developers from all around the world. The code is available for anyone to examine and all changes to the code have to achieve a certain level of consensus (through user and miner participation/agreement) before they are accepted and deployed on the network. Everything about it is completely transparent (unlike fiat/government-controlled money).

What the unknown individual or group known as Satoshi Nakamoto did was release this whitepaper, describing (along with code and mathematical examples) how a distributed, decentralised cryptocurrency could work. The identity of this individual or group is no longer relevant though, no more so than an Archimedes' screw requires Archimedes' help for it to work. The whitepaper simply revealed a verifiable solution to a problem.

If you're familiar with the age-old Byzantine Generals' Problem, you'll know why the release of this whitepaper was such a big deal. In essence, the Byzantine Generals' Problem was a well-known computing analogy (believed for many years to be unsolvable), describing the problem of validating data in a multi-master or distributed/decentralised network in which there is no central or controlling authority. The fact that this whitepaper now proved that there was indeed a solution was huge and it led to the development of Bitcoin and countless more cryptocurrencies and distributed networks such as Ethereum, designed for running Smart Contracts and Distributed Applications (which is another fascinating and world-changing aspect of the technology .... currency is really just the first application).

Originally Posted by Regulus

It strikes me as very strange when I consider the implications.

Seeing this is so extremely limited. I mean, if the BTC really is supposed to reach such valuations. How does it make sense to have it? It can't be for regular shopping food or clothing etc. Even buying a car would be valued at minute fractions of one BTC.
AND there are billions of people alive, even millions in any given country. So what is it? Is it supposed to replace gold, as a storage of wealth? Thus not destined to be a currency as such?

I apologize if I ask questions that can't be answered, or if I look at this from a faulty perspective.
edit *Like believing it might be a test run for crypto currencies

The smallest unit of a Bitcoin is known a Satoshi (in honour of the author of the whitepaper). It is 1 x one hundred millionth of a Bitcoin (0.00000001 BTC) and, as I understand it, there's no reason smaller divisions couldn't be created in future if it was deemed necessary (assuming the relevant changes to the code achieved the required level of network consensus). Think of a Bitcoin as a large denomination bank note that can be substituted with lower denomination notes and coins. Most smaller purchase with Bitcoin are done in milli-Bitcoins (mBTC). As the value of Bitcoin increases, we're likely to see prices quoted in micro-Bitcoins instead (uBTC). There's plenty of Bitcoin to go around though and, if prices continue to rise, most people will probably never own a full Bitcoin, just like most people never get to own a million Dollar note.

You need to play with cryptocurrencies a little to really understand why they're such a big deal. It's a fascinating, revolutionary and highly disruptive technology that cannot be ignored. I'd recommend installing a Bitcoin Wallet, such as Electrum and having a play with it. Post one of your Bitcoin receiving addresses and I'll send you a small amount to play with. If you want to understand more, I'd highly recommend watching some of Andreas Antonopoulos' talks and interviews on YouTube.

[Regulus]

Thank you for the explanation

I don't have a crypto wallet. Not that I don't believe the value will increase.
I have already looked at specialised miners, and at some of the wallets out there.
It is probably true one has to actually experience this, to understand it properly.
But my intuition doesn't trust the crypto currencies. And I do trust my intuition

[moltuae]

Originally Posted by Regulus

But my intuition doesn't trust the crypto currencies.

And indeed you shouldn't. In fact the cryptocurrency space is littered with scams so you do have to be careful. Even genuine cryptocurrencies, like Bitcoin, are still very much at the experimental stage; I wouldn't recommend anyone to invest their life's savings or any more than they can afford to lose. Having said that, the Bitcoin network has so far proven to be resilient and secure enough to protect over 50 Billion Dollars of funds, despite years of attacks and attempted hacks. Of course that's largely thanks to the decentralised nature of the currency -- unlike the traditional banking system there's no central point of attack.

[ainarssems]

Updated Nice Hash miner today to 1.8.1.1, well actually first to 2.0.0.12 but that only wanted to mine on CPU then to 1.8. 1.8 has more algorithms than 1.7 and now 2x GTX1080Ti are mining skunk which I did not have before with jump from £4.3/day to £6.3. Don't know what it changed in terms of of power consumption as the meter is in another circuit at the moment.

[moltuae]

Cool

I've been holding off updating until the new version was confirmed stable. Time to give it a try I think ....

[Regulus]

Originally Posted by moltuae

About 16.5 million Bitcoins have been mined so far. By the time we reach the 21 million limit (in a little over 120 years time), I would guess that the amount of Bitcoin actually in circulation would be less than half that value, mainly due to 'lost' coins.

I didn't know 16.5 m BTC was already mined. Cool

A ploy by who? Bitcoin is built on open source software (that can be examined by anyone) and is a distributed, decentralised network that requires a high degree of consensus for any changes to be made. Unlike fiat currency, nobody is running the show.

I know it's open software, but it was created by some individual or group of individuals, right? who use a Japanese sounding name. Anyhow, nobody knows who it was as far as I understand. For all I know - it could have been IMF or/and the UN. Even if that is farfetched.



Hilarious video MikkyJane

[Regulus]

Originally Posted by moltuae

Scarcity, exponential growth and adoption are what will ultimately dictate the price. About 16.5 million Bitcoins have been mined so far. By the time we reach the 21 million limit (in a little over 120 years time), I would guess that the amount of Bitcoin actually in circulation would be less than half that value, mainly due to 'lost' coins. If adoption continues on its exponential curve, that's not a lot of coins to share between several billion people. If you do the maths, you can see why there are a lot of bullish predictions, suggesting that widespread adoption as a worldwide currency could see a single Bitcoin worth hundreds of thousands (or possibly even millions) of Dollars within the next 5-10 years, especially when you consider the irreparable state of the global 'fiat' economy.

It strikes me as very strange when I consider the implications.

Seeing this is so extremely limited. I mean, if the BTC really is supposed to reach such valuations. How does it make sense to have it? It can't be for regular shopping food or clothing etc. Even buying a car would be valued at minute fractions of one BTC.
AND there are billions of people alive, even millions in any given country. So what is it? Is it supposed to replace gold, as a storage of wealth? Thus not destined to be a currency as such?

I apologize if I ask questions that can't be answered, or if I look at this from a faulty perspective.
edit *Like believing it might be a test run for crypto currencies