Bit Coin Cranial Conundrum

Now I will readily admit, I am a Bit Coin neophyte.

I have a really difficult time wrapping my head around bit coin.

I understand the algorithm part, and I get the mining 'work' part (sort of), but I totally lose it at the 'fork' part. That a fork can even happen at all seems to diminish the entire value of the system to zero just instantly. And I absolutely don't understand how the value of a bit coin in one fork can be equated to the value of a bit coin in another fork.

And if that (above) looks like Greek to you, you're probably not alone, but I approximate it this way...

Rewind back to confederate currency...a fork in the bit coin world is like comparing confederate currency to the value of current US dollars. One system essentially collapses, and the other becomes the basis for valuation. Except that in the bit coin world it doesn't work that way which, in my mind, defies the laws of economics.

Can anyone enlighten this simpleton? Note - This is not a math question, it is a foundation question.

edit...and on a side note, has anyone else seen these bit coin 'mining' operations??? WOW...I had no idea!! I was reading one article where this guy had one that filled up his entire basement! He used more electricity to run it for a single day than his entire house used in a whole year! And over in Europe they have guys who have effectively created super-computers to mine these things, entire data centers complete with HVAC and everything.

a reply to: Flyingclaydisk

perhaps you will find this helpful (perhaps not) www.coindesk.com...

I follow a geopolitical intelligence platform, mainly for geopolitical/political news, but they did a podcast about Bitcoin and the Blockchain 2 days ago so I did a short write up on it. Check it out if you want - the podcast is 20 mins Blockchain, Bitcoin and Digital Ledger Technology

a reply to: Flyingclaydisk

My wife calls it fake money.

I've been into this for a year now and some of it is still confusing.

A Hard Fork is a splitting of the source code from the main branch. And this can happen for different reasons. However when the fork occurs a new coin is made on the forked code. Anyone with a balance in the original coin now has the same balance in the forked coin.

a reply to: Flyingclaydisk

Forks are essentially a copy of the original with changes in the protocol.

Think if a blockchain as unbreakable laws. The only way to bend, or even break them is by forking. In thus regard bitcoin is not a future proof blockchain.

Thus etherium and smart contracts.

As you noted, bitcoin is hell on hardware and resources. Also better mining and staking methods are being utilized and further developed.

If you really want to be impressed/disgusted, lookup the bitmain warehouses.

"Bit Coins" are a 'virtua'l currency. At the core of it, just as intangible as other 'fiat' currencies represented by paper, plastic and electronic funds.

The advantages are , there are no central banks to issue it, all the users combined are "the Bank". The 'currency' is vulnerable though because like other currencies, the declared value is not held in the hand, but resides in a 'computer' memory bank somewhere.

Which is as only as stable as the computer network on line. If for some reason the computer or the currency "App" becomes inoperative, whether turned off, hacked or made illegal... People should be reminded that in this time of instability in major regions of the world, only tangible assets that can be held in the hand directly, such as precious metals will retain their value , in all possible 'currency' crash type scenarios.

a reply to: JinMI

The only way to bend, or even break them is by forking.

Or a crash, by declared emergency, making crypto currency illegal, seizure of assets, etc.

If its virtual, its vulnerable.

a reply to: intrptr

You got it half right. The blockchain doesn't exist in a central location. Thus it all being decentralized.

I've been abit worried about future regulation but given that decentralization is key, losing your coins is not the worry. Access would be the tough part.

a reply to: JinMI

I've been abit worried about future regulation but given that decentralization is key, losing your coins is not the worry. Access would be the tough part.

I'm also a little concerned about this notion of the advantage of it being accepted world wide no matter where on the globe. Poor folks can have access to it anywhere...

...as long as they can afford to operate a phone device, money to buy whatever, and a shipping hub nearby.

Many poorer people (as in billions) can't afford to buy stuff anyway, live in regions that are remote or inaccessible, anyway.

For instance, I read somewhere 750 million people in India live on less than two dollars a day.

They have no use for a crypto currency.

a reply to: intrptr

It's important when viewing crypto to not get caught in the lens of traditional currency or even a replacement. Rather an additional or working concurrently with. For developed countries anyway.

For the others, think of how their currency works and why they can't get to it, or perhaps it is worthless. Cryptos can offer another avenue that can't be controlled by cartels or some other entity that would seek to control those small populations.

All in my opinion of course.

Interesting responses so far, and pretty consistent with what I understand to date...(which isn't much).

I still don't understand the value across block chains. I keep seeing bit coins in one chain have the same value, but it seems like the only justification I can ever drill into for this is..."Just because that's the way it is". And that, to me, is like someone saying "don't worry, just trust me". This is especially true when you consider the causation for a fork, it's usually some major event like a compromise or breach.

I read one example just the other day (I don't remember the name of the crypto-currency) where an software glitch caused everyone to lose all their bit coins. The article went on to say how they were trying to get all the new holders to amortize and absorb the losses before the fork as if it magically never happened. If they agree, everyone is fine. If they don't, then all those below the fork will lose everything. So, in my mind, all the more reason to understand why / how, logically and even mathematically, a bit coin above a fork can be compared in value (equal or otherwise) to a bitcoin below the fork.

edit...again to my Confederate currency example; at the end of the Civil War one fiat currency was worth nothing (Confederate dollars) and the other, US Dollars, had a positive value. This makes sense economically. Bit coin doesn't.

a reply to: Flyingclaydisk

There's about three hours of conversation that could be had in response to your post.

What gives coins value? What gives a USD value? Faith...essentially. There is only so much Bitcoin that can be produced. It's a set number and so it is finite. The rest is market faith, adoption and speculation.

I'm not sure what the other stuff is in relation to, but I'm assuming it's something to do with the recent etherium lockout.

a reply to: Flyingclaydisk
Myself I wouldn't touch it with a barge pole.
I don't care about what it's proponents say about it but I will give you two pieces of info.
1. NOBODY and I mean nobody ever does something for nothing. So someone somewhere is making money off your "money" so someone, somewhere is paying that piper.
2. If you bank say with the Chase, if it goes feet up there is a chance you might get some compensation from the government. BUT if bitcoin goes feet up just who can you chase for your money because it's "diversified" over borders and countries. Good luck with that one.
It's just another way to get hold of your assets, nothing more, nothing less.

a reply to: JinMI

For the others, think of how their currency works and why they can't get to it, or perhaps it is worthless. Cryptos can offer another avenue that can't be controlled by cartels or some other entity that would seek to control those small populations.

Where currency is unavailable or worthless, they have bigger problems, like eating and drinking.
Besides, where there is crisis, internet isn't allowed or severely restricted. Thats controlled from the top. Unless theres an internet separate that bit coin is exchanged on that is.

So ultimately control remains in the hands of centralized power structures. Can't get away from its virtual bits and crypto 'value'.

To me it sounds like a pyramid scheme, tbh, if we remember what thats about.

A come-on to get in on the rave that will eventually collapse, leaving those at the top with all the money and those at the bottom holding Virtually nothing.

a reply to: JinMI

Yes, I believe that was indeed the name of the currency.

I almost bought $100 dollars worth of bitcoin back when each coin was like $0.10.. Now its 7k per coin, Id be a millionaire.

Im young, 28, and I see where its headed.

To be honest I dont understand the fork either, and the concept of bitcoin cash.

I will say however Im not making the mistake again of not buying.

I Just bought $1400 worth of Ripple XRP

that makes complete sense to me.

Ripple gives the big banks a way to regulate cryptocurrencies. The man will have his way whether we like it or not.

Just throwing this out there. Everyone should read up on Ripple XRP and jump in now... I dont believe you will regret it.

a reply to: intrptr

They do have bigger problems than currency. However, when you can obtain an outside and recognized store of value that can be traded for food and water, you've delivered a helping hand. Now if you're saying some don't have direct access to food and water or a place to obtain them, then yes, your statement is clearly correct.

No one is forcing your hand into crypto. You're still free to do as you wish. Personally, I have made dividends and can easily move around funds to less volatile options. A pyramid scheme? Well, that would depend largely upon the coin in discussion.

I'm well aware that most here at ATS are not too keen on Bitcoin, let alone any other of the 500 some coins, but the underlying tech is something to keep an eye on.

a reply to: Lucidparadox

Same here. Still kicking myself for not jumping on it.

I'm not fond of Ripple myself. However the Cardano Project is working to solve the problems that you're speaking on without leaving the majority of stake within the same power structures.

a reply to: JinMI

I'm well aware that most here at ATS are not too keen on Bitcoin, let alone any other of the 500 some coins, but the underlying tech is something to keep an eye on.

I'm like from this whole other perspective. One that doesn't seem to exist anymore.

I never had credit cards, insurance or bank accounts. When I need something I pay cash, If I cant afford it, I don't need it.

What I own I have wth me.

a reply to: Flyingclaydisk

after trading cryptocurrencies since july ive come to learn a few things about it that i didnt realize before

the value of a bitcoin or any crypto token at any given time is always the exact price the last one was sold for.

bitcoins are being traded on public exchanges on the internet 100's of times a minute sometimes, people post an offer when they want to sell however much for w/e price, if someone is interested they buy it, the price of this purchase is public because its a public ledger so the details of the sale is shared so the entire exchange and all its users can see what it sold for, and the next person to sell a coin or a piece of a coin will probably mark theirs up a cent or so. if there are no buyers for a given time people start dropping their offer price until a buy is made, that new lower price then replaces the previous price.

any time you google what is the current value of bitcoin you are seeing the price of the last trade on whatever random exchange,

obviously this means different exchanges will have different prices at times. this is true, there is in fact a crypto bot being created now intent on automating trading between exchanges for the purpose of taking advantage of these price differences, which will also level those price differences, its rialto coin, im investing in them too
www.rialto.ai...



so the tldr answer to your question what sets the value, the people who are willing to buy it, they set the value.

as far as forks go, theres network forks, and network upgrades, a network upgrade is essentially a soft fork its a moment when the majority of the developers for a coin have agreed to a modification to the code which is so significant it will practically be a whole different type of coin, when the majority of them agree to do it they call it a network upgrade, everyone who owns those types of coins will automatically have them upgraded,

but a hard fork, or network fork, happens when the majority of the developers of a coin do not agree, when the party that wants the network upgrade decide to pursue it without the majority they hard fork the code, this is basically copying all the code of the current coin and making the upgrades/modifications to the copied version, this new coin which is only a modified version of the old one, is given a new name, an example of a hard fork would be when bitcoin (BTC) forked off bitcoin cash (BCH)

i dont know if ive explained this all very well?


also to those mentioning they have invested, my advice is dont risk it, hedge it. meaning, dont invest all your willing into a single coin, portion your funds out across multiple coins, no matter how good a coins project is they are all vulnerable to downfalls, be it hacking, bugs in the code, scammers, you never know, by spreading your investments across multiple opportunities you hedge your winnings and your loses, i have invested in dozens a handful of which collapsed and i lost much money in them, but by paying attention to their news i was prepared to sell as they collapsed quick enough i did not lose very much. then on the upside, other projects i had also invested in that have done well more then compensated for the losses of the ones that didnt. im well ahead, if i had only picked one project/coin i could have lost it all.


for people who want to invest and hedge their investment but dont want to spend the time and effort following multiple projects/coins there are actually projects just for you that will do this for you. one ive invested in is Hedge token, www.hedge-crypto.com...
their summary in PDF format, www.hedge-crypto.com...

i believe blockchain technology will and already is changing the world, i made a thread about it www.abovetopsecret.com...

tips on how to pick the good investments out from the bad ones. cointelegraph.com...