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Bitcoin- What Is It? How do You Use It?

 
 
Sat 16 Sep, 2017 08:31 am
I have been hearing a lot about Bitcoin. I have been to a number of Bitcoin tutorials, but I can't seem to get my head around it.

Can anyone share his/her expertise on the subject?
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McGentrix
 
  2  
Sat 16 Sep, 2017 10:31 am
@Phoenix32890,
Phoenix32890 wrote:

I have been hearing a lot about Bitcoin. I have been to a number of Bitcoin tutorials, but I can't seem to get my head around it.

Can anyone share his/her expertise on the subject?



Are you looking for a cursory description or an in depth discussion. At it's surface it is referred to as a "crypto-currency" that has no physical form. You can't hold it or put in the bank or under your mattress. It's is strictly an internet phenomena and is traded online.

Bitcoin.org is a great resource for starting out.

Some things you need to know
Quote:

If you are about to explore Bitcoin, there are a few things you should know. Bitcoin lets you exchange money in a different way than with usual banks. As such, you should take time to inform yourself before using Bitcoin for any serious transaction. Bitcoin should be treated with the same care as your regular wallet, or even more in some cases!

IconSecuring your wallet

Like in real life, your wallet must be secured. Bitcoin makes it possible to transfer value anywhere in a very easy way and it allows you to be in control of your money. Such great features also come with great security concerns. At the same time, Bitcoin can provide very high levels of security if used correctly. Always remember that it is your responsibility to adopt good practices in order to protect your money. Read more about securing your wallet.

IconBitcoin price is volatile

The price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you receive payments with Bitcoin, many service providers can convert them to your local currency.

IconBitcoin payments are irreversible

Any transaction issued with Bitcoin cannot be reversed, they can only be refunded by the person receiving the funds. That means you should take care to do business with people and organizations you know and trust, or who have an established reputation. For their part, businesses need to keep control of the payment requests they are displaying to their customers. Bitcoin can detect typos and usually won't let you send money to an invalid address by mistake. Additional services might exist in the future to provide more choice and protection for the consumer.

IconBitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy. Read more about protecting your privacy.

IconUnconfirmed transactions aren't secure

Transactions don't start out as irreversible. Instead, they get a confirmation score that indicates how hard it is to reverse them (see table). Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer.


Confirm­ations Lightweight wallets Bitcoin Core
0 Only safe if you trust the person paying you
1 Somewhat reliable Mostly reliable
3 Mostly reliable Highly reliable
6 Minimum recommendation for high-value bitcoin transfers
30 Recommendation during emergencies to allow human intervention

IconBitcoin is still experimental

Bitcoin is an experimental new currency that is in active development. Each improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin adoption grows. During these growing pains you might encounter increased fees, slower confirmations, or even more severe issues. Be prepared for problems and consult a technical expert before making any major investments, but keep in mind that nobody can predict Bitcoin's future.

IconGovernment taxes and regulations

Bitcoin is not an official currency. That said, most jurisdictions still require you to pay income, sales, payroll, and capital gains taxes on anything that has value, including bitcoins. It is your responsibility to ensure that you adhere to tax and other legal or regulatory mandates issued by your government and/or local municipalities.
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gungasnake
 
  2  
Sat 16 Sep, 2017 03:23 pm
@Phoenix32890,
Bitcoin is a private blockchain – based currency system which amounts to a cybernetic replica of an honest gold-based monetary system, down to the detail of a computer simulation of the economy of mining and producing gold. The real technology in the picture and the thing which you need to understand more than any one particular crypto currency such as Bitcoin is block-chain technology, which has uses and applications beyond the question of private monetary systems.

The biggest political issue in the world, now even as it was 300 years ago, is the question of the nature of money itself, who has the right to coin it, produce it, what if anything it is supposed to be backed by were based on etc. etc. In theory, in the United States, only the federal government is supposed to have such rights. The present system in which the Federal Reserve creates money and the government borrows money into existence with us paying interest on it amounts to a usurpation as per Ellen Brown's "Web of Debt". That usurpation took the form of the Federal Reserve being created in 1913 along with the income tax. The idea was to use federal debt as a primary basis for money, allow the income taxed to pay interest on the debt, and more or less roll the principal over in perpetuity. At best that was a fragile system, at worst a time bomb with a 100 year fuse. Outside of the illuminati or whatever you care to call them, just about nobody is happy with this present system

And so a bunch of guys with no particular license to do so get together and create their own money system...

What could possibly go wrong?? For starters, governments could shut the whole thing down anytime they feel like it, either directly by legislative action or indirectly via manipulation of their own currency; in either case, people holding crypto currencies would be left holding the bag.

Another major problem is that the coin mining feature of Bitcoin is basically harebrained, regressive, and inflationary.-

A very reasonable system based along similar lines could be adapted by individual states: the idea would be for a states to create its own state bank similar to the bank of North Dakota and its own crypto currency of the same time and, rather than using any kind of a coin mining scheme to increase the money supply (as is the case with Bitcoin), use the creation of credit for infrastructure and credit worthy business applications as a main system for increasing the money supply (which would not be inflationary).
roger
 
  2  
Sat 16 Sep, 2017 04:21 pm
@gungasnake,
Hey, thanks.
gungasnake
 
  1  
Sun 17 Sep, 2017 05:19 am
@roger,
One other stray thought: If a state were to adopt the policy I mentioned above, that state could totally legitimize the state cryptocurrency by declaring that all state and local taxes within the state could be paid in the cryptocurrency, the same way English kings originally legitimized the use of tally sticks.
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Phoenix32890
 
  1  
Mon 18 Sep, 2017 04:43 am
Thanks, guys. But I am still terribly confused. In our normal monetary system, a good or a service has a particular price, which the buyer pays the seller. In Bitcoin, the price of the Bitcoin is volatile. So one time you might pay one price for an item, and the next time another? Can somebody please help me?
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Thegitmon
 
  0  
Sun 14 Jan, 2018 12:04 pm
Bitcoin price is volital because it’s still a new form of currency. Right now countries are regulating bitcoin, Litecoin, Ethereum and other Cryptocurrencies, so the price dramatically moves on all news. Cryptocurrency values also move on news of coin developments and partnerships with companies. For instance, ripple XRP price jumped as news that banks, western union and MoneyGram were going to be using XRP. Stellar coin jumped as news of a partnership with IBM. Ethereum moved with news of Microsoft.
You can buy at overstock with bitcoin as well as several dozen other cryptos. If you choose to pay in cryptos, the price of your item will just convert from dollars into the crypto of your choice.
KEntucky Fried Chicken now offers the bitcoin bucket which can be purchased with bitcoin.
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