Thank you! Well its really not that useful by itself, just like little green papers aren’t that useful. But its just more practical for the world to imagine that the paper is worth something its not, because this makes trade a lot easier to do. Same thing with Bitcoin
I wouldn’t say all crypto is a pirymid scheme but some of it 100% is, like dogecoin or something. Bitcoin didn’t become worth 1.6 TRillion dollars because of scam, like there’s actual institutional investment into it
I wouldn’t say PoS is a scam but it 100% increases that existential threat of a 51% attack.
I feel like there’s so much nonsense happening with crypto that people will overlook any of the legal, ethical use cases of it. Like its got lower inflation than gold, I mean that’s actually incredible from an economic standpoint.
You should read some of Satoshi’s stuff about bitcoin, its honestly pretty interesting ,he wrote a lot about the economic implications of it. Actually fun fact in the first Bitcoin block, the first transaction has the title from British newspaper about how the government was bailing out more banks.
Bitcoins got lower inflation than gold, that’s a use case right there
How can you justify a funny money that doesn’t do anything new in terms of cyber security, while burning vastly more resources to do it, and is only worth something because of the currency that it’s supposed to replace, and that value rapidly fluctuates from moment to moment.[?]
Well its got lower inflation than gold, that’s something.
There used to be services to obfuscate this, but the government has well and truly broken through those. They can find you of they want to. Not all currencies have this issue, like stuff like Zcash and Monero cant be traced
well…no. Gold goes up because of the same reason and its not ruining everything. And I’m pretty sure actually no currency has THAT much inflation, like that’s a lot more than you might think
Not all crypto is hard to mine you know. Stuff like Ethereum and Solana don’t use up that much electricity bc they use a different method called proof of stake, rather than bitcoins proof of work. Basically people who wanna validate transactions stake some money on the network, and if they validate a transaction right, they get paid a bit. If they get it wrong, they lose that money they staked. And the more money they stake, the more they make from validating transactions.
Well it really depends. The good thing about PoS is that it lowers volitilatity to some extent, because stakeholder cant take out too much of their money otherwise they’d be losing out on money they couldve been making. PoW is definitely more concrete though, PoS is really abstract for sure
If your interested in learning more about the math behind Bitcoin and how it functions at a lower level I’d recommend reading the original white paper for it
A central part to it is that each coin is defined as a series of transactions, not the other way around like with real world items. For example if a new Bitcoin is mined, that’s described as a transaction from no-one, to someone.
I’m gunna try to explain the basics of just Bitcoin here, its probably the easiest to understand out of all of them. It’s all based on a mathematical function called the hash function. Basically the hash function can take in any input and produce a unique number between zero and a bazillion that represents it. Statistically speaking, the outputs of the hash function are random, and if you only have the output its impossible to find the corisponding input - it cant be reversed. When a transaction happens with a cryptocurrency its broadcast to the whole network, and made very public. All the information about it, the sender, the receiver, the amount, the time, and a few other things too, all that is sent around the network. That bundle of information is basically all a transaction is. But the process of validating it is what makes it real. Some people have computer programs that collect all of these transactions broadcast across the network, and they combine them into large chunks, known as blocks. Each block, along with all the financial data inside it, has an extra number attached to it known as a nonce. These people who listen for new transactions and later store them, take the block, and apply the hash function to it. If the output of the hash function is in a very small range - with is unlikely - a new special transaction happens, from no one, to the person who calculated the hash, minting new bitcoins (rn I think this amount is 3.125 Bitcoin but that might be outdated). (This is what Bitcoin mining is). If the output of the hash isn’t in the range, they try again. The network automatically changes the size of this range to make sure that over a given amount of time the same number of bitcoins are minted, making Bitcoin free from spikes in inflation. Additionally, the network halfs the reward from mining a block about every 4 years, causing the inflation rate to drop over time. As this happens the network with settle on a fixed number of usable bitcoins, slightly less than 21 million. And that part of it makes its a viable alternative to gold, because while new gold is always being mined, its not much so overall gold has very low monetary inflation. But a large amount of bitcoins value stems from the fact that eventually Bitcoin wont have any at all.
I’d be more than happy to further explain how this stuff works, I’m no expert but I’m really interested in the math and economics behind it all. I really recommend reading the original Bitcoin paper, https://bitcoin.org/en/bitcoin-paper , its not a light read but it explains it all a lot better than I can. Have a nice day!
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What If I gambled some money I made from honest work and won several millions? Who am I exploiting?
How did Linux Torvalds, creator of the Linux kernel, exploit people?
What did Linus Torvalds do?!
they could also make electric cars…
And that could’ve been me.
What if people just donated several millions to me because they liked something I did? that’s not exploitation