Bitcoin - Virtual Currencies and the future of Cash

[Dave Hounddriver]

1 hour ago, Jack Peterson said:

I prefer the real thing Cash in my Pocket where I know where/what it is.

I also prefer cash in my pocket, but it comes out of a machine where the bits and bytes have been transferred from the payer to my Canadian bank to the transfer company to the Philippine bank who change it all into cash.

Since I have to trust encrypted bits and bytes somewhere along the line, I prefer to have that electronic currency backed by a government of the people, for the people rather than backed by a guy who says:  Hey, I can get rich with this system, come join me and convince others to buy into it too.

[russellmania]

Las Vegas started out as a one horse town in the dessert. Over the years it grew to what it is today with one word takes major credit for that...greed. These guys that bought bitcoins for pennies at the start, now its worth thousands. Why wont they cash in a walk away? LET IT RIDE MAC!!!!

[Dave Hounddriver]

2 minutes ago, russellmania said:

one word takes major credit for that

I thought "organized crime" was too words   

Yes I am trying to be funny, but I believe criminals will find bitcoins to be the most useful.  The rest of us are perfectly happy with real currencies until we want to hide something from and ex wife, or the tax man, or do a little money laundering.

But I speak from a purely opinionated point of view.  Can someone who believes in bitcoin tell us why we need it instead of cash?  Other than greed or crime?

[earthdome]

8 hours ago, Dave Hounddriver said:

Can someone who believes in bitcoin tell us why we need it instead of cash?  Other than greed or crime?

I will give it a shot. But in a series of posts over time. Just too much information for one post.

[earthdome]

The first thing to consider is what problem does the technology underlying bitcoin solve? Why has this whole bitcoin and crypto currency thing gone viral in the last year?

 

The problem that some cryptographers and computer scientists have been trying to solve for decades is the creation of a true digital/internet currency that can be used like cash but over the internet.  The problem is how do you prevent someone from making a copy of the digital cash like you can copy a movie. How do you prevent someone from being able to spend the same digital cash more than once? How do you keep it anonymous like cash if a third party like PayPal conducts the transaction for you. How is it like cash if it is just an account entry in some corporations database rather than something you hold in your own hand or store under your mattress?

There have been a number of attempts to create internet money like PayPal, eGold, etc. but they have never really solved the root problems.

 

So what features do you need to solve these problems.

 

The digital currency needs to be trustless. In other words two people can conduct a transaction between themselves without having to use and trust a third party.

The digital currency needs to be immutable. In other words once a transaction has been done it can't be reversed or changed.

The digital currency has to prevent double spends. You can only use the cash once, no counterfeiting or copying.

Transactions should be anonymous. Like cash, only the two parties conducting the transaction could know.

Control. The individual should control their digital money directly rather than relying on a third party.

 

The first time the above problems were solved was when the bitcoin white paper was released in late 2008. It was released by a person or persons who realized how much of a game changer bitcoin was so they remained anonymous and are only known by the name Satoshi Nakamoto. The breakthrough was the development of the software technology to have a trustless immutable database (ledger) for the digital currency transactions. This is what people call the blockchain. Regardless of what happens to bitcoin as a currency blockchain technology will end up being deployed to solve problems in 100's if not 1000's of applications. Major computer and financial corporations are developing solutions using blockchain technology.

Thats it for now. More later on bitcoin itself.

 

 

[Dave Hounddriver]

11 hours ago, earthdome said:

Thats it for now. More later on bitcoin itself.

Your précis seems well researched and accurate.  It explains why banks and corporations would want blockchain technology.

It does not explain why the founders would not go to the US treasury department, (or a similar entity), and ask for the backing of same.  It does not explain why the anonymous founders did not say "Eureka" and immediately go get a patent so others could not copy their idea with hundreds of different types of bitcoin knockoffs.  And it still does not explain why I, the consumer, would want some bitcoin rather than cash EXCEPT if I was greedy or had criminal intent.

Thank you for what you have explained so far.  I look forward to more.  

[sonjack2847]

There is s story in the Daily mail that bitcoin has dropped by 55% and governments are worried about it being used to launder money.

[Happyhorn52]

Las Vegas is about entertainment, and no one in his right mind goes there thinking he will come out a winner. 

[sonjack2847]

Yahoo news

Japanese authorities on Friday raided virtual currency exchange Coincheck, a week after the Tokyo-based firm lost $530 million in cryptocurrency to hackers.

The raid comes as bitcoin dipped below $9,000 for the first time since November after India said Thursday it would take measures to prevent the use of cryptocurrencies.

The search of Coincheck's headquarters in Tokyo's Shibuya district was carried out by the Financial Services Agency, which had already slapped the company with an administrative order following the hack.

"We have launched an on-site inspection to ensure preservation of clients' assets," Finance Minister Taro Aso said at a briefing.

Japanese officials have suggested Coincheck lacked proper security measures, making itself vulnerable to theft.

The January 26 hack, which saw thieves syphon away 523 million units of the cryptocurrency NEM, exceeds the $480 million stolen in 2014 from another Japanese virtual currency exchange, MtGox.

Earlier this week, Japan's FSA gave Coincheck until February 13 to investigate the cause of the incident, "properly" deal with clients, strengthen risk management and take preventive measures.

Coincheck has said it will use its own funds to reimburse all 260,000 customers who lost holdings, at a rate of 88.549 yen per NEM.

The refund, which will be paid in yen, not virtual currency, will set the firm back about 46.3 billion yen ($422 million).

In the wake of the MtGox scandal, Japan passed a law on cryptocurrencies that requires exchanges to be regulated by the FSA. The law went into effect in 2017.

Coincheck had submitted an application to the FSA for a licence and was allowed to continue operating while it awaited a decision, the agency said.

Japan is a leading market for cryptocurrencies, with nearly a third of global bitcoin transactions in December denominated in yen, according to specialist website jpbitcoin.com.

Virtual currencies are popular elsewhere in Asia, including South Korea and China, but India's government on Thursday said it would crack down on their use.

Finance Minister Arun Jaitley, in his annual budget, said New Delhi would "take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system".

Bitcoin, which soared to nearly $20,000 a unit in December, was down at $8,800 on Friday, while other digital units such as Litecoin and Ethereum have also suffered massive losses from their recent peaks.

I remember reading that this also happened in Korea.

[Jack Peterson]

I said a Bubble wait to burst Did I not?

***He said: “I say it’s the mother of all bubbles and it’s also the biggest bubble in human history if you compare it to the Mississippi Bubble, the Tech Bubble or Tulip Mania.”***

Full page post.;

https://www.express.co.uk/finance/city/913815/bitcoin-price-bubble-burst-btc-crash-news-cryptocurrency-value