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Bitcoin is Tumbling

Discussion in 'General Offtopic' started by Roboartist, Jul 17, 2017.

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  1. snug

    snug aka Cropdusterx

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    what good is currency that doesnt actually exist outside of the matrix?
     
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  2. OP
    Roboartist

    Roboartist Reclaimer

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  3. Sponsor

    Sponsor NaCl

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    Also great currency for ransom-ware and the black market as it cannot be traced :)
     
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  4. Leek

    Leek Member

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  5. icehawk

    icehawk Member

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    Damn Robo, that just did my head in. I'm old school and I can't work out what the heck Bitcoin is? I understand cash in my wallet, I understand cash in the bank and my debit card, but WTF is Bitcoin?
    I know there are some people here in Aus going mad for it but it just does my head in.
    Though if I could buy game time with Bitcoin, we'll then maybe I'd look into it ;)
     
  6. Dorigon

    Dorigon Alpha and Omega

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    Rather invest in something that has a longer track record.
     
  7. Shragenator

    Shragenator Veteran

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    In short, it's a peer to peer currency which has an artificial scaling cap (kind of like artifact power) to keep supply limited and have it maintain value. All currencies are only worth whatever they are decided to be, this one just happens to work over digital trading. It's the same way that wow gold is worth money, just this one is more controlled, secure, and easy to use so people invest in it by using it.
     
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  8. Syrayeda

    Syrayeda Member

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    its a cryptocurrency. google it if you want a more in depth explanation.

    from what i understand (might not be 100% accurate) : it consists of a blockchain (a ledger of sorts) containing all the transactions since day 1. the blockchain is now more than 100GB. from this blockchain, they can work out how many bitcoins each account has.

    each account is identified by its private key (google that). the private key is used to sign transactions made by that account. a public key can be generated from the private key. private keys are kept private but public keys can be given to others to verify the ownership of the private key. generating a public key from the private key is easy, but finding the private key from a public key is hard (10^31 years for a computer to solve hard).
    side note : encryption uses public key to encrypt, then uses private key to decrypt. thats what https does

    the blockchain contains extra data (called nonce) to make sure it is valid. the whole blockchain needs to result in the blockchain's sha256 (worth googling) to have a low value. sha256 is a hashing algorithm that takes in input of any size and returns an output of 256 characters. the blockchain is considered valid if the resulting sha256 contains a small value (exact number is based on the calculated difficulty which increases over time). calculating a valid sha256 can only be done through trial and error, changing the nonce and recalculating it until a small enough sha256 value is found.

    the blockchain is kept going by hundreds of thousands of bitcoin miners. when you make a transaction, they are the ones that calculate a valid sha256 of the blockchain that includes your transaction. the first person to calculate a valid sha256 will announce to everyone the new blockchain, and they also get some bitcoins as commission. people use expensive hardware as well as running many computers to mine bitcoins to ensure they have a good chance of being the first to find a valid sha256.

    if multiple valid sha256s are found at the same time (or even different transactions with valid sha256s) every bitcoin miner will have knowledge of all the valid blockchains, but each miner will only use 1 of them as the main blockchain. in this case, the transactions that are in different blockchains are marked as unconfirmed. as more transactions come through, miners will add transactions to what they think is the main blockchain. once a blockchain is longer than all the others, everyone will use that as the main blockchain. the shorter blockchain will be discarded, which means the transaction on that blockchain has failed

    ---

    so the advantage of bitcoin is that the blockchain is kept by hundreds of thousands of people. there is no central system to store your bitcoins. to reverse a transaction, you will need to create a blockchain longer than the blockchain that contains the transaction you want to reverse. doing so will need a lot of computing power (more computing power than hundreds of thousands of bitcoin miners put together), especially if there are already a few transactions after your transaction

    well all of these hold as long as P!=NP (yea google)
     
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