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Can someone explain bitcoins?


DeaconTheVillain

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Well, as a pro poker player, I rely on the stupid....I sometimes feel bad about it.

Maybe im taking the idiots rent, maybe he feels bad about calling when I was betting the nuts the whole time. Maybe he needs the money I just took for his wife or kids...

So, in a way, I kinda do make money for doing nothing already......I pay taxes off of winnings, but do I report it all...yes and no. That might makes sense to some, but mostly none of you. I have a deep grasp and understanding of statistics and probabilities, but if you ask me to explains computer code or algorithms. I'd tell you to go **** yourself.

I was intrigued by this whole bitcoin thing (which I know started a few years ago) and just learned about. A currency which is unregulated by any government got my eyes wide open. However, I do understand that all markets are pretty much, well to be blunt "Fake" and was looking at this as maybe something that isn't...

It got my eyes opened, yet my penis remand flaccid.

Good to see another serious poker player in the forum! I wouldn't say you make money doing nothing. I assume you have out in the time studying the game and use that knowledge to gain your edge. Assuming by your location you are still playing online and that's why you are interested in bitcoins. There is a very informative thread on 2+2 about this very topic. Long story short, if you aren't comfortable with the computer side, simply buying bit coins is the way to go.

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  • 2 weeks later...

Lifehacker did a story on Bitcoin.

http://lifehacker.com/5991523/what-is-bitcoin-and-what-can-i-do-with-it

As you've noted, Bitcoin is a digital currency used to pay for a variety of goods and services. In many ways, it works the same as paper money with some key differences. Although physical forms of Bitcoin exist, the currency's primary form is data so you trade it online, peer to peer, using wallet software or an online service. You can obtain Bitcoin's either by trading other money, goods, or services with people who have them or through mining. The mining process involves running software that performs complex mathematical equations for which you're rewarded a very small portion of a Bitcoin. When you actually have some of the currency, you can then use it to purchase anything that accepts it. In some cases, Bitcoin is the only accepted form of payment and you'll have to acquire it in order to complete a transaction. While this basic explanation might answer most of your initial questions, it likely brings up quite a few more. Let's discuss how you can acquire Bitcoin and why you'd use it.

Way more at link.

tumblr_lfczwcJqNm1qgnsnbo1_250.gif

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  • 4 weeks later...
My question is, who wants these algorithms solved and why?

Its just used as a way to distribute the currency. It's sort of arbitrary, but, other than just sending it directly to me, any method is as good as any other.

Anyways, I LOVE this sort of intersection of finance, law, and technology, so I am about as well versed in Bitcoin as I can be. 2 Thursdays ago, Bitcoin surpassed $1 billion in total available currency and then the value promptly collapsed. :ols: I was at work at the SEC (the financial regulatory, not the football conference), everyone was like "OMG Bitcoin is collapsing .. . WTF is Bitcoin????" :ols:

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But it's real money, so I still don't get it. If the algorithms don't do anything, why are people getting paid to solve them?

It is Bitcoin's way of regulating distribution and thus maintain its value. The algorithms get progressively harder, but ultimately, aside from "winning" the Bitcoins, solving the problems has no value to anyone.

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Gotcha. So why are they distributing bitcoins?

To expand their use. The more Bitcoins there are, the more people will own them . . . the more people that own them, the more people will use them . . . the more people use them, the more business will accept them . . and then the last two feed on each other until Bitcoins are universally accepted.

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Soooooo, to recap. Some nerds made up a fake currency to pay for fake things in a fake internet world.

And now they are trying to use the fake things to pay for real things. The question I have is what prevents me from "counterfeiting" these fake coins.

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Soooooo, to recap. Some nerds made up a fake currency to pay for fake things in a fake internet world.

And now they are trying to use the fake things to pay for real things. The question I have is what prevents me from "counterfeiting" these fake coins.

It's a fascinating experiment/endeavor from an economics perspective, actually. They're only worth something because everybody that uses them agrees that they are so (and some are, in fact, willing to provide currency issued by governments or goods and services for them), but if you really think about it, that's true of most currencies including the dollar, the Euro, and the yen. In some ways, it's not any more "fake" than any other currency used to replace bartering, though of course the big difference is that something like the U.S. dollar is backed by the big guns. Literally.

In terms of prevention of counterfeiting, my understanding is that every transaction is recorded in some kind of log that is shared in lots of places, so even if you "counterfeited" your own, the other logs wouldn't agree, and you wouldn't get away with it. This also means that some of the privacy nuts and drug dealers (apparently, it's becoming increasingly big with the underworld) are creating a permanent record of all their transactions that as far as I can tell will never go away. Also, the point of the increasingly difficult algorithms is that it requires a lot of effort to issue new coins, so the market can't (in theory) be flooded.

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You can still make money using the old Internet business method. Create a guide and sell it to the uneducated. The guide will not be how to make money by bitcoin mining, but by telling others how to create a profitable Internet business selling a bitcoin guide to the uneducated.

Kind of like the infomercial guy that sold tiny ads in newspapers out of his one bedroom appt? :whoknows:

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---------- Post added April-26th-2013 at 12:56 PM ----------

I am still trying to figure out what the whole "mining" process is about ?

Are bitcoins real coins or just digital currency?? I googled bitcoin images and see tokens. I'm so confused after reading all of this. :(

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You can still make money using the old Internet business method. Create a guide and sell it to the uneducated. The guide will not be how to make money by bitcoin mining, but by telling others how to create a profitable Internet business selling a bitcoin guide to the uneducated.

thesecret03-1_zps96028cc6.jpg

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