Crypto Currencies

[gavmen]

Sort of just selectively answering a few questions in the thread.

Just from general ones to some of the more specific ones.

Is it a Ponzi Scheme?
By the (Wiki) definition of a Ponzi Scheme

"Require an initial investment and promise well-above-average returns"

The intial statement is most likely what makes people think that its a Ponzi Scheme as anyone who is an early adopter will have made the most gains. That is since the bitcoin price has increased the people who adopted early could been seen as given a "well-above-average" returns. This is however the same for any investment where the price has increased e.g. share price of Google/Apple. However if the price of bitcoin never took off (probably a bad phrase) it would have still continued to be a currency. Also when you purchase bitcoin you're not paying back the intial investors money, because if you lose they lose as well (I understand if big money goes in and out, they couldnt care less about you but this is just an analogy).

Which is the offical "Bitcoin"?
*There is a lot of misinformation on the internet and you could say my statement is also part of this misinformaton.*

To understand this better we need to understand the blockchain. The blockchain is the underlying technology of cryptocurrencies and is a ledger of every single transaction ever made of the cryptocurrency. A very easy to understand explanation is here: https://bitcoin.stackexchange.com/q...eone-explain-how-the-bitcoin-blockchain-works
I was actually confused until I read the blockchain for dummies version.

However the original mainstream cryptocurrency is "Bitcoin". This can be traced back to the genesis block (1st block) through its own technology the "Blockchain" where every block which has been mined can be tracked. https://blockchain.info/ . If you can identify that the original Bitcoin is the official one then it is. The confusing part to this to anyone new to the cryptocurrency space is the two pieces "altcoins" and "forked coins".

A forked coin is one which has been split from an original blockchain. This has happened to many cryptocurrencies and the more popular ones are:

Bitcoin:
Bitcoin Gold
Bitcoin Cash

Ethereum:
Ethereum Classic

Forks occur when the miners find a valid block at the same time and this occurs often however this is resolved when the next block is found and attaches itself to the previous block and becomes the longest chain. The shorter chain and its block are then discarded and the longest (valid) chain carries on.

Forks can also occur when people decide they want to change the "rules" (software) also known as a hard fork. The most recent mainstream one of which was Bitcoin Cash where they wanted to change the blocksize from 1mb to infinitely scalable. The hard fork then occurs because some of the miners decide that they like the new rules and want to follow that, and some do not. There are myriad of reasons for this and there are pros and cons to it and I wont go into detail in this post but may write a response if requested. This means both Bitcoin and Bitcoin Cash are valid cryptocurrencies in that they both have miner support and they continue to support both as they both provide profits.

Altcoins are completely separate blockchains which have their own genesis block and rules. The most notable of these is Ethereum. They also have had their hard fork into Etherium and Etherium Classic

Can you still mine bitcoin?
Can it be done?
Yes

Is it profitable?
Yes IF your electricity is completely free. There are some caveats as you will need high capital to buy an ASIC miner (specific cryptocurrency hardware) consumer computer hardware now mines bitcoin at such a low rate it would be unfeasable.

Is it possible to be profitable even if they electricity is not free?
Yes, the easiest of the options is to mine an Altcoin and hope that its price goes up. Ethereum is an example of this.

Is it still worth buying?
Like any investment it has inherent risks and they are up to you. Never go all-in I guess.

If you guys have any more questions let me know

Thanks

Gav

 

[Skydrol]

Yeah 1 question... Where is Satoshi Nakamoto?

 

[gavmen]

No one knows. Some would suggest that its not one person, but potentially persons.

Gav

 

[Skydrol]

So nobody knows where this came from. All we know is some "White Paper" made by some ficticious charcter.

 

[gavmen]

Does knowing who it is make it more or less real to you?

 

[Skydrol]

Is not about been real, is about trustworthiness. As far I know, there is a 50/50 chance to be a move for 1 Cashless World Currency by Central Bankers. I am a believer of tangible assets and some that is nothing more than an algorithm hash is not a store of value to me, therefore, is as good as any currency and none of them endured the test of time.

 

[gavmen]

I am confused, so are you inferring that you dont use credit cards, cash and only barter for goods?

Or do you see currency as a nesscessary evil as long as its not an "algorithm hash"? Possibly read up on sub-prime? They were tangible assets with intangible price/cost realisations?

 

[Skydrol]

Sure, now days we use some form of currency (paper or plastic) but what I have been hearing lately, people are using Cryptos as a store of value. I do not see why can it be a store of value at all, is all Ether. To me, has no more value than an Arcade Token.

 

[Immortality]

Is not about been real, is about trustworthiness. As far I know, there is a 50/50 chance to be a move for 1 Cashless World Currency by Central Bankers. I am a believer of tangible assets and some that is nothing more than an algorithm hash is not a store of value to me, therefore, is as good as any currency and none of them endured the test of time.

I can see what you are saying, but then the money you currently earn is mostly fictitious numbers on a spreadsheet simple because if every man, woman, child (and their dog) went to the bank and tried to withdraw their saving the entire world banking system would crash as there isn't enough actual cash to cover it and in the mean time the b(w)ankers get rich whilst we work harder and longer to pay of the interest on the loans they provide.

The likely hood of crypto currencies been real lies in the fact that anybody can set up and mine it which ensures the legitimacy of the blockchain mentioned earlier in this thread. Also means that no one entity like a central bank can control it. However crypto currencies are still small enough in value that a large bank/state could in theory manipulate the value of said currency by simply buying and selling it much like brokers manipulating stock values.....

Yeah 1 question... Where is Satoshi Nakamoto?

This is probably a good question for our mate Zeke, no doubt something along the lines of "the devil" or "satan" would be the likely answer

 

[Zehq]

It's verified in that every transaction and transfer can be confirmed and legitimized by any single entity. It's what makes crypto currencies so interesting.