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Post by Deleted on May 14, 2021 10:44:10 GMT
You and me both Andy, I have no idea how it has value, I just know that it does and it can be an extremely high and life-changing value.
Pete
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Post by andyhigham on May 14, 2021 10:59:48 GMT
Could it be that the "mining" is using your computer to perform computing tasks for A.N.Other? The bitcoin is then payment for this task. Elon Musk no longer accepts bitcoin for cars, he claims the energy consumed per year by the "mining" is equal to the entire energy consumption of The Nederlands
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Post by Deleted on May 14, 2021 11:12:58 GMT
Could it be that the "mining" is using your computer to perform computing tasks for A.N.Other? The bitcoin is then payment for this task. Makes sense for 'pay for power' type coins, but what about 'pay for space' and then the coin my boys are playing with, 'pay for space/time'? it's all a 'dark art' to me... Pete
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Post by ettingtonliam on May 14, 2021 11:46:31 GMT
Just a thought, but wouldn't this thread be better off in the 'Offchat' section?
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Post by Roger on May 15, 2021 8:52:56 GMT
What I cannot understand is this mining system. You run a supercomputer or a large number of PC Servers that do very complex calculations that, when solved, create part of a bitcoin. If you are creating bitcoins out of thin air, surely that leads to inflation in the same way that printing more paper money, or selling more shares, can do if the economy of the country, or value of the company, cannot back them up. I understand about shares and the likelihood that, for example the death of the CEO of a company can wipe off share value, even though the company is still there and nothing has happened to its assets, just because of “the market” reaction to the death (it happened to a company in which I worked). But bitcoin creation just doesn’t seem to jive up. As I understand it, mining Bitcoin is exactly the same as any Central Bank printing money to control the money supply. They do it all the time and it's measured and necessary as the economy grows. Crypto Currencies mimic that, and it's why the bar has been raised to high so that it limits the number of new Bitcoin. If that didn't happen, inflation would run wild like you suggest. The problem with Crypto is that there's no intrinsic value in it. It only has value because those who hold it have confidence that it's worth something. Personally, I think Bitcoin will collapse when better, a more energy efficient Crypto Currency becomes dominant. Which one that will be is anyone's guess.
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jem
Elder Statesman
Posts: 1,064
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Post by jem on May 15, 2021 15:53:16 GMT
I still dont understand what mining is, and why it takes so much computer energy?
Jem
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Post by Roger on May 15, 2021 18:56:50 GMT
I still dont understand what mining is, and why it takes so much computer energy? Jem The idea is to allow the community a way of slowly creating the money supply, just like the Central Banks do today. They created an algorithm that computers can solve, a puzzle if you like. Every time they compute a new valid answer, they create a new Bitcoin. However, it's not a very sensible way of doing it because of some blindingly obvious drawbacks that they clearly didn't see coming. At the start, you could get a home computer to solve the puzzle, and people quickly seized on that and made a ton of money, just like Pete's Son has done. However, people quickly cottoned on to that and started making too many coins, so the puzzle was made harder to solve. So what's happened is like an arms race between people applying ever more powerful computers to solve ever more difficult puzzles. The result is that the amount of energy needed to solve the puzzle has almost as much cost as the value of the Bitcoin it's creating. It only takes that balance to flip the other way, and the whole process collapses. It's a nonsensical way to go about things, but that's the Frankenstien monster that Bitcoin has become.
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Post by Deleted on May 15, 2021 19:34:47 GMT
As I have said a number of times this is all a dark art to me, but I have been reading up on it in recent weeks. It seems that those in the know currently only expect things to grow. My son's coin has been jumping up in steps, it's a bit additive watching the coin grow in value. I was reading the experts prediction for bitcoin from some years back. Their calulations made a few years ago make interesting reading. For example they predict that one bitcoin in 2050 will be worth $10 million, what's of more interest was the prediction for 2024, where they predicted the coin would be worth $33k which is a long way short of it's actual value today of $50+k. Their latest prediction is a value of $100k by next year? My son expects his coin to hit $10k in the near future...as I said it's additive to watch... I'm just bemused by the possibilities...
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JonL
Elder Statesman
WWSME (Wiltshire)
Posts: 2,906
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Post by JonL on May 15, 2021 20:03:58 GMT
I still dont understand what mining is, and why it takes so much computer energy? Jem It's the equivalent of printing your own currency, but by carrying out a deliberately complex equation that requires time and effort to solve, thus preventing the market being flooded by people popping them out like popcorn.
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Post by David on May 16, 2021 8:15:31 GMT
I think the "starts easy, gets more difficult over time" was a deliberate part of the design of bitcoin. Also, there are a finite amount of bitcoins. But that is also a design feature, where other types of coin may not have that finite supply.
I am convinced the original bitcoin was essentially a joke, but built on an apparently interesting technology called a blockchain. I know nothing about blockchains so cannot offer a simple explanation of them.
I read an article in the weekend paper about an Australian company set up by a few ex-Macquarie bank people to mine bitcoins using renewable energy in Canada where there is too much of it for the grid to handle. They're selling it as environmentally and socially responsible, using this power that for some reason can't be used for other things - probably because all heavy industry in the first world has disappeared! Sounds like a scam to me, using real energy to 'mine' totally fake and only-worth-something-due-to-a-global-delusion string of bits. Pretty sure this is like tulips.
The whole thing hacks me off. I love programming, but I hate what the computer business has become. Bombing Silicon Valley out of existence would be a good start to rectifying things.
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oldnorton
Statesman
5" gauge LMS enthusiast
Posts: 692
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Post by oldnorton on May 16, 2021 9:17:33 GMT
All are agreeing that Bitcoin has no underlying substance or value, and that it should/could/might collapse. However there is a big difference between electronic currencies and historical speculation bubbles like tulips or the South Sea funds, and that is their use by the criminal world to launder and store money out of sight of the world's banks and thus law enforcement agencies.
While the black money is there it can be stable. If the law enforcement agencies get access to names then perhaps it all collapses?
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Post by David on May 16, 2021 10:19:14 GMT
Good point re black markets. It's also the favoured payment for computer ransom attacks.
So perhaps you can argue anyone participating in these schemes is enabling criminal activity... If no-one except criminals gave them any value, would they lose their value?
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Post by Roger on May 19, 2021 19:02:18 GMT
Here's the sort of thing that can happen to any Crypto Currency, any day. BBC News
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Post by Deleted on May 19, 2021 19:13:55 GMT
Yep...fun isn't it....watch this space for the big jump...
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Post by Roger on May 20, 2021 9:56:37 GMT
Yep...fun isn't it....watch this space for the big jump... It's certainly interesting. But like any gambling, you need to be playing with money you can afford to lose.
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Post by Deleted on May 20, 2021 10:27:56 GMT
Yep...fun isn't it....watch this space for the big jump... It's certainly interesting. But like any gambling, you need to be playing with money you can afford to lose. I'm expecting a big bounce back in a few weeks when PayPal goes live with trading in crypto and adding it to the list of methods for people using PayPal to buy goods from all the merchants signed up to them. That should be a far bigger boost to cryptocurrency than Musk's little games...
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Post by Roger on May 20, 2021 11:17:50 GMT
It's certainly interesting. But like any gambling, you need to be playing with money you can afford to lose. I'm expecting a big bounce back in a few weeks when PayPal goes live with trading in crypto and adding it to the list of methods for people using PayPal to buy goods from all the merchants signed up to them. That should be a far bigger boost to cryptocurrency than Musk's little games... That should make a big difference, because up to now, there hasn't been any way to spend it for things we need. Elon is not doing his other businesses any favours by dabbling in Cypto. Tesla stocks are already volatile enough, without adding that into the mix. It's hard to now where any of this is going to end up. It's likely to be volatile in the extreme until one Crypto currency becomes dominant. Bitcoin can't be that currency because of the way it's mined. I'm sure it will continue for some time, but it's certain to be displaced. This is probably a pattern we're going to see for the forseeable future.
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Post by Deleted on May 20, 2021 12:05:16 GMT
Well, don't forget the 16,000 ATM machines here in the UK from which you can draw cash from your Bitcoin account.. I agree that other cryptocurrencies will overtake bitcoin due to the power consumption involved with mining, this is what my son is hoping for due to the greener method for mining used by new coins out there. I wouldn't wipe off Bitcoin yet though, forecasts are still predicting a value of over $100k for next year and an incredible $10 million by 2050. As I said, we shall see... Pete
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Post by Roger on May 20, 2021 14:02:00 GMT
Well, don't forget the 16,000 ATM machines here in the UK from which you can draw cash from your Bitcoin account.. I agree that other cryptocurrencies will overtake bitcoin due to the power consumption involved with mining, this is what my son is hoping for due to the greener method for mining used by new coins out there. I wouldn't wipe off Bitcoin yet though, forecasts are still predicting a value of over $100k for next year and an incredible $10 million by 2050. As I said, we shall see... Pete You may be able to draw from an ATM at the moment, but that could change overnight at the whim of the Goverment if they decide that it's undermining the Economy. Some banks already make it difficult or impossible to buy Bitcoin. At the moment, Bitcoin and other Crypto Currencies have pretty much no impact on most people's lives, and the Government isn't really interested in them yet. All the time it's on the fringe, that's how it will probably stay. Some will certainly get rich during this phase, but ultimately things will probably settle down and it will be just boring old money, like Sterling is. Crypto of itself gives nothing to the average man in the street. It's far less useful than hard currency. Maybe that will change, and Tesco will accept Crypto. I'm not holding my breath though. For most of us it's just a curiousity, and more use for the criminal underworld than for groceries. Yes, I could dabble in it, I've looked at it before. One day I might, if I see an opportunity. Unfortunately these occur infrequently, and unless you're interested enough to constantly follow what's going on, you'll miss the boat. Life's too short to be chasing rainbows when there are other much more interesting things to be doing. Good luck to those who ride the wave. However, every wave peters out on the beach in the end, and you're left waiting for the next one.
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Post by Deleted on May 20, 2021 14:24:07 GMT
Not according to an interview on Bloomfield with Ark Investments CEO 'Cathie Wood yesterday, she stated that the sudden drop in bitcoin is good and that she expects it to now increase in value to $500k. These rainbows are real and crypto will become the main currency of the future.
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