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Question about Bitcoin

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posted on Jun, 22 2012 @ 11:57 AM
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Pretty basic question too. How does it work and how do you set it up?
I was trying to pay for something online but apparently the company is somewhere in Europe and they dont accept credit cards.
They do, however, accept bitcoin. So I go to the site, expecting something like a paypal service but then realize that I have to download a bitcoin client, so I do.
What I do not understand though, is how is this funded? There is no option to back it up with a funding source. I really dont get it


Any help would be mucho appreciated




posted on Jun, 22 2012 @ 12:06 PM
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reply to post by Juggernog
 


Well I'd advise against bitcoin right now but here's a rundown.

Basically, what you are doing when you install that client, is running an algorithm in the background that is trying to solve an equation.

It's a type of random thing, you don't know who will mine the coin or when, so for a single user with a single pc, you could run it forever and not generate anything. That's why people have bitcoin farms with servers and tons of clients all running the thing.

Basically, you are trading CPU cycles for the chance to generate a bitcoin. what exactly are they doing with those cpu cycles? No freaking clue.

It sounds like free money, but it's not. Unless you are running a massive server farm, you will spend more on electricity to generate the coins than you will get back.



posted on Jun, 22 2012 @ 12:11 PM
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reply to post by phishyblankwaters
 


what the hell?
I sorta understand what your saying. I used to "loan" out my cpu to a SETI program but I cannot see how that relates to a payment system.

The bitcoin client has been "synchronizing with the network" for over an hour now and my balance is 0... I really dont understand the concept here, I guess.



posted on Jun, 22 2012 @ 12:40 PM
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I think the dude above has got things confused and has confused you in the process lol.

Okay so you want to buy something with bitcoin. This is pretty easy especially as you have the bitcoin client now. (although I have never actually downloaded the clients) Okay so you go to an exchange, I would recommend either mt gox or intersango. I mainly use intersango.

You send intersango your cash and they deposit it into your account, this can take a little while as payments are handled manually.

Okay so now you have your intersango account credited with your cash. All you have to do now is buy some bitcoin, you can either buy from the people that are offering or you can make you offer and hope someone accepts, it's up to you.

When you have your bitcoin you can transfer them to your wallet/client. Do you have a stupidly long number associated with your client?

Anyway what that other dude is on about is mining! You do not need to mine to get bitcoins. Hope this helps. Need any advice just let me know. Btw I love bitcoin!



posted on Jun, 22 2012 @ 12:46 PM
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Let me just add that the price of bitcoins can fluctuate somewhat, so you will have to check with the company you're buying from about what they accept. Btw do you trust the company you are buying from? Why do they not accept credit cards? That sounds a bit shady to me.

You see once you send them the bitcoins then that is that. You can not get them back! There is no inbetween party like with paypal. But then there are no paypal fees either! Intersango does charge fees however. If you transfer money they charge 20p (i'm in the uk so i'll be dealing with pounds). Then when you buy bitcoin or sell bitcoin they charge a percentage which is 0.68%. To transfer bitcoin costs nothing though.

I actually make a little money buying and selling bitcoin on the exchange. I do it for fun really, but I have made money.

edit on 22-6-2012 by mee30 because: (no reason given)



posted on Jun, 22 2012 @ 12:52 PM
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reply to post by mee30
 


So lemme get this straight. Bitcoin is actually is or trying to be a real currency that can be traded/
Anyway, the company that i am talking about is apparantly out of Ireland and no, there isnt a MC or Visa option for payment. Its a VPN service called securitykiss



posted on Jun, 22 2012 @ 01:00 PM
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reply to post by Juggernog
 





So lemme get this straight. Bitcoin is actually is or trying to be a real currency that can be traded/ Anyway


Bingo, although it's not "trying to be", it is! There are various places that accept bitcoin as payment now. Though not many big named sites. Mainly it is e products and services like web design etc.

I'm not 100% sure what vpn is though I'll be honest. Have you dealt with the company before? Do you trust them? I wouldn't just send bitcoin to people without first having 100% trust in them. It would be like sending cash in the post or something.



posted on Jun, 22 2012 @ 01:05 PM
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reply to post by Juggernog
 


Check out this, it will probably help you a lot.

en.bitcoin.it...



posted on Jun, 22 2012 @ 01:10 PM
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reply to post by mee30
 





I'm not 100% sure what vpn is though I'll be honest. Have you dealt with the company before? Do you trust them?


VPN= Virtual Private Network, kind of like a proxy but more secure and no ive never dealt with them before

Securitykiss

Anyway, it seems that bitcoin isnt what I thought it was, I was, I thought it was a system that I could fund with a credit card for payment.o
I appreciate your help but I still dont see the benefit of this system



posted on Jun, 22 2012 @ 01:16 PM
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For buying into bitcoins I have used this site mtgox.com... . It allows you to trade in and out with a few different currencies. Other tools are constantly getting developed so you will need to do some homework to find out how it best works for you.

The mining process has to do with the encryption process that is used to protect the currency. Basically it uses a brute force method to help keep it secure. With so many millions of hours of CPU time already gone into it, even the NSA would have a hard time cracking it with all of its resources. As this encoding or mining process continues it makes the system even harder to crack. There has been a limit set on the maximum number of bitcoins that will be available, but it is still going to take a few years and heaps more resources to get there. As the mining continues, the returns will also diminish, it is expected there will be just a few huge server farms to fit with the cost / benefit analysis. If you are wanting to get into mining bitcoins, then you should really get a high end graphics card as the stream processes are a lot more efficient in the encoding algorithm than CPU based processing. There are also collectives you can join that help with getting the returns sooner as you all take a share in the mining of new coins.

There has been a few bumpy times in the development of bitcoins, but it is still going and growing. There are also some risks as with all new technology. There are also some benefits as the bitcoin economy does have some good protections against economic mismanagement.



posted on Jun, 22 2012 @ 01:21 PM
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reply to post by Juggernog
 


You don't see the benefit? Okay well I'm not here to fight for bitcoin lol. What I suggest is doing a bit of reading about it. There is plenty of information about it on google. There are hundreds of benefits for bitcoin. It is not a "system" it is a currency. It all depends on what you want to do with it.

I'll give you a for instance. Say I want to send some money to a friend in australia. I buy the bitcoin then send them to him. Then he sells them his end for his currency of choice and it would work out much cheaper than using a money tranfer like western union. That is just one example. There are many more. You have plenty of research to do.



posted on Jun, 22 2012 @ 01:23 PM
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reply to post by mee30
 


I am not against it, Im just trying to understand it.
What youve explained can already be done with a system like paypal, right?



posted on Jun, 22 2012 @ 01:38 PM
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reply to post by Juggernog
 


oh so paypal charges zero fees? paypal is also known for shutting down accounts with no reason given. lol

Edit: like I said, you need to do some research on it. It will take a few days but it's worth it.
edit on 22-6-2012 by mee30 because: (no reason given)



posted on Jun, 22 2012 @ 01:46 PM
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Originally posted by mee30
reply to post by Juggernog
 


oh so paypal charges zero fees? paypal is also known for shutting down accounts with no reason given. lol

Edit: like I said, you need to do some research on it. It will take a few days but it's worth it.
edit on 22-6-2012 by mee30 because: (no reason given)


Yea, im going to research it, its a bit more complicated than I expected.
And idk about paypal charging fees or their practices. Like I said, im not for for against either service. I was just saying, if you wanted to send money to a friend or whoever, the way to do that already existed using paypal.



posted on Jun, 22 2012 @ 01:55 PM
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reply to post by Juggernog
 


There were ways to send money abroad way before paypal too. But with bitcoin you can send the coins for zero fees! Also it would be ANONYMOUS, to an extent. Yes you could be tracked if they really wanted to but it would be hard work.

It is a little complicated, but when you fully understand it you will see the benefits. Those benefits might mot suit your needs but hey all things are not for everyone.

Just google paypal shut down my account. Or froze my account. They do not give any reason etc. They do it a lot!

I do have paypal and have used them on ebay. I feel like I'm getting shafted by a double ender! lol E-bay take their cut then paypal takes theirs! It's a little ridiculous.
edit on 22-6-2012 by mee30 because: (no reason given)



posted on Jun, 22 2012 @ 02:03 PM
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reply to post by Juggernog
 


Check out this... Regarding paypal shafting, oh I mean fees, sending money to a friend. lol

www.paypal.com...



posted on Jun, 22 2012 @ 02:45 PM
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Comparing bitcoin to PayPal is like comparing apples to rocks. PayPal deals with different currencies, bitcoin is a currency in itself.



posted on Jun, 22 2012 @ 02:48 PM
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Originally posted by phishyblankwaters
reply to post by Juggernog
 


Well I'd advise against bitcoin right now but here's a rundown.

Basically, what you are doing when you install that client, is running an algorithm in the background that is trying to solve an equation.

It's a type of random thing, you don't know who will mine the coin or when, so for a single user with a single pc, you could run it forever and not generate anything. That's why people have bitcoin farms with servers and tons of clients all running the thing.

Basically, you are trading CPU cycles for the chance to generate a bitcoin. what exactly are they doing with those cpu cycles? No freaking clue.

It sounds like free money, but it's not. Unless you are running a massive server farm, you will spend more on electricity to generate the coins than you will get back.



Why would you advise against bitcoin? Mining is only one aspect



posted on Jun, 22 2012 @ 04:12 PM
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reply to post by mayabong
 


Hmmm I wasn't comparing them actually, the op was. I didn't bring paypal into it. Though you certainly can compare the fact that you can send money by using bitcoin and by using paypal. That was the only aspect I did compare.

I'm well aware that bitcoin is a currency as I pointed that out before.



posted on Jun, 22 2012 @ 04:54 PM
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Originally posted by mayabong
Comparing bitcoin to PayPal is like comparing apples to rocks. PayPal deals with different currencies, bitcoin is a currency in itself.


Yea but its the same concept, you still have to link it to some form of currency, so its not a currency in itself.




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