Recently Active 'difficulty' Questions - Bitcoin Stack ...
Recently Active 'difficulty' Questions - Bitcoin Stack ...
The Process of Bitcoin Mining - Crypto World News
Bitcoin hash rate suffers shocking 29% decline
What Is A Bitcoin Hash Code? CryptoCoins Info Club
30+ Reasons Why Cryptocurrencies Are Worthless
1)It is possible to change the code through a miner vote or a fork and change the total supply or anything. DASH did it : they reduced the total supply from 84M to 18.9M a few years ago. They could also increase it to 999 Trillions if they wanted to so that millions of DASH are mined every week. 2)You can also fork bitcoin anytime , start over from 0 and claim it's the real bitcoin. (BCH , BSV , BTG , LTC , BCD etc) 3)Why would you pay $10,000 for a digital collectible unit called BTC when you can use BCH or TRX or LTC .. you name it. They work just as fine and cost less. There is no rarity like in gold. 4)Think of any amount you hold in ethereum as a gift card to use smart contracts on the ETH blockchain. Ridiculous. You’d rather hold a wal mart gift card or even simply cash. 5)Private keys may be bruteforced as we speak. Quintillions entries a second. When they’ll have enough bitcoins under control , they could move them all at once instantly.(At least 45,000 ETH have been stolen this way for now through ethereum bandit)SHA 256 is too old , bitcoin is 10 years old , it is not secure enough , quantum computing could potentially break it. 6)And that’s if people don’t find a way to create an infinite amount of coins to sell on exchanges.. it happened with monero , stellar , bitcoin , zcash , zcoin , eos , etc.. proofs : “Bitcoin , Coindesk : “The Latest Bitcoin Bug Was So Bad, Developers Kept Its Full Details a Secret”an attacker could have actually used it to create new Bitcoin — above the 21 million hard-cap of coin creation — thereby inflating the supply and devaluing current bitcoins.” Stellar : “Stellar Inflation: Glitch Leads to 2.25 Billion Extra XLM Printed” Monero : “A bug in the Monero (XMR) wallet software that could enable fake deposits to exchanges has been recently brought to public attention through a Medium post” Zcoin : Forged coins were created, but not exceeding 1% of the circulating supply. We will release further details on exact numbers when Sigma is released. EOS : “Hackers Forge Billion EOS Coins to Steal Real Crypto From DEX “ Zcash : “Zcash Team Reveals It Fixed a Catastrophic Coin Counterfeiting Bug” etc.. 7)Segwit , and especially Lightning network is a very complex technology and it will inevitably have flaws , bugs , it will be exploited and people will lose money. That alone can cause bitcoin to drop very low levels. 8)Then miners may be losing millions so they will stop mining , blocks may be so slow , almost no transaction will come though , and bitcoin may not have enough time to reach the next difficulty adjustement. This is reffered to as a death spiral. Then every crypto even those with no mining involved may crash hard. 9)Many crypto wallets are unsafe and have already caused people to lose all their investment , including the infamous “parity wallet”. 10)It is NOT trustless. you have to trust the wallet you’re using is not just generating an address controlled by the developper , you have to trust the node the wallet connects to is an honest node , you have to trust a Rogue state or organization with enough computing power will not 51% attack the network. etc.. 11)Bitcoin is NOT deflationary. Bitcoins are created every blocks (roughly every 10 minutes) and you wil be dead by the time we reach the 21 million current hard cap. 12)Bitcoin price may artificially be inflated by Tether. 13)It’s an energy waste , an environmental catastrophy. 14)The only usecases are money laundering , tax evasion , gambling , buying on the dark net , evading sanctions and speculation. 15)Governments will ban it if it gets too big , and they have a big incentive to do so , not only for the obscure usecases but also because it threatens the stability of sovereign currencies. Trump could kill bitcoin with one tweet , force fiat exchanges to cease activity. 16)Most cryptos are scams , the rest are just crazy speculative casino investments. 17)It is pyramidal : early adopters intend to profit massively while last comers get crushed. That's not how money works. The overwhelming majority of crypto holders are buying it because they think they will be able to sell it to a higher price later. Money is supposed to be rather stable. That's why the best cryptocurrencies are USDT USDC etc.. 18)The very few stores accepting bitcoin always have the real price in the local currency , not in bitcoin. And prices like 0.00456329 BTC are ridiculous ! 19)About famous brokers listing bitcoin : they have to meet the demand in order to make money , it doesn't mean they approve it , some even short it (see interactive broker's CEO opinion on bitcoin) 20)People say cash is backed by nothing and losing value slowly , and yes it is very flawed , but there is a whole nation behind it , it's accepted everywhere , you can buy more things with it. 21)Everybody in crypto thinks that there will be a new bullrun and that then , they will sell. But because everybody thinks it will happen , it might not happen. The truth is past performance doesn’t indicate future performance and it is absolutely not guaranteed that there will ever be another bullrun. The markets are unpredictable. 22)Also BTC went from about $0.003 to the price it is today , so don’t think it’s cheap now. 23)There is no recourse if you’re scammed/hacked/made a mistake in the address etc. No chargebacks. But it might be possible to do a rollback (blockchain reorganization) to reverse some transactions. BSV did it. 24)In case of a financial crisis , the speculative assets would crash the most and bitcoin is far from being a non speculative safe heaven ; and governments might ban it to prevent fiat inflation to worsen. 25) Having to write down the private key somewhere or memorize it is a security flaw ! It’s insane to think a system like this will gain mass adoption. 26) The argument saying governments can not ban it because it is decentralized (like they banned drugs) doesn’t work for cryptos. First , drugs are much harder to find and much more expensive and unsafe because of the ban , and people are willing to take the risk because they like it. But if crypto is banned , value will drop too much , and if you can’t sell it for fiat without risking jail , goodluck to find a buyer. Fiat exchanges could close. Banks could terminate every crypto related bank account. And maybe then the mining death spiral would happen and kill all cryptos. 27) Crypto doesn’t exist. It’s like buying air. It’s just virtual collectibles generated by a code. Faguzzi, fugazzi, it’s a whazzie, it’s a whoozie.. it’s a.. fairy dust. It doesn’t exist. It’s never landed. It’s no matter, it’s not on the elemental chart. It… it’s not fucking real! 28) Most brilliant guys have come out and said Bitcoin was a scam or worthless. Including Bill Gates , Warren Buffet , The Wolf Of Wall Street… 29) Inflation is necessary for POW , BTC code will have to be changed to bypass the 21M cap or mining will die ! If BTC code is not changed to allow for miners to be paid reasonably , they will cease mining when the bitcoin block reward gets too low.Even monero understood it ,the code will have to be changed to allow for an infinite bitcoin supply (devaluating all current bitcoins) or the hash will decrease and the security of bitcoin will decrease dramatically and be 51% attacked 30) Don’t mix up blockchain and cryptos. Even blockchain is overrated. But when you hear this or that company is going blockchain , it doesn’t mean they support cryptocurrencies. 31) Craig Wright had a bitcoin mining company with Dave Kleinman (he died) and on january 1 2020 he claims he will be able to access the 1.1M BTC/BCH/BTG from the mining trust. He may or may not dump them on the market , he also said BTC had a fatal flaw and that by 2019 there will be no more BTC. 32) Hacks in cryptos are very common and usually massive. Billions of dollars in crypto have been stolen in the last 6 years. In may 2019 Binance was hacked and lost 7,000 BTC (and it’s far from being the biggest crypto hack). 33) Bitcoin was first. It's an ancient technology. Newer blockchains have privacy, smart contracts, distributed apps and more.Bitcoin is our future? Was the Model T the future of the automobile? (John Mc Afee) 34) IOTA investiguating stolen funds on mainnet. IOTA shuts down the whole network to deal with trinity wallet attack. 35) Compared to bitcoin other cryptos work just as fine and don't waste so much energy. 36 ) Everytime miners disagree on the updates it will create another version of bitcoin : problem of governance and legitimacy. 37) Cryptos are only legitimate if they act as a credit for a redeemable asset like USDT or gold backed coins. While the native language of the writter is not english , I think you get the point and it doesn't make it any less relevant.
If you are holding a shovel, that doesn't necessarily mean you are digging gold ;)
Ok, you may still call it "mining" but technically it's only hashing (mind the name: NiceHash). (and it may or may not be used to mine Cryptos, but in the end, it's not you who decides).
What the hell am I doing then?!?
You offer your hashing power; e.g. your GPU(s) and/or CPU(s) computing power - you are a Seller
NiceHash is a marketplace where others buy access to your hashing power - these are Buyers
Others aka Buyers are then mining Cryptocurrencies to their wallets, by using your hashing power
Deals are sold and therefore paid in BTC - from the Buyers pockets directly to your pocket
Prices are solely set by best bids from the Buyers - neither you nor NiceHash can directly affect them.
Who makes Profit, and how?
NiceHash collects fees from buyers and sellers to pay their costs and make their income.
Buyers mine Coins... on other pools to hodl (hoping for future profits), solo to win the “block lottery”, to capitalize short-term rate changes, or by applying other, more complex strategies. tl;dr: Buyers spend their BTC on NiceHash to make a profit for themselves.
Sellers (you) earn these BTC, and after covering your costs - investments in hardware, electricity, maintenance (i.e. your precious time to keep rigs running) - you hopefully made some profit also.
How is it possible everyone is making a profit?
The Cryptocurrency ecosystem attracts people; even the average Joe these days; There is lots of hype, and also lots of belief - more or less reasonable - that Cryptos are the Next Big Thing. So they put their so-called Fiat money (USD/EU…) into buying Coins and thus generate new value within them.
As long public interest rises, thus enough fresh (Fiat) money is floating in - to at least cover more than all the running costs are (hardware, electricity, wages, etc.; usually still to be paid in Fiat) - everyone within this ecosystem can make some profit over time.
Why do profits skyrocket, and will it last (and will this happen again)?
When even Fox News tells people to have some Bitcoin, because everyone can double his money within a few months only, a heavy influx of fresh (Fiat) money begins, and shortly after everyone gets completely crazy, the pie that feeds us grows - to the moon, at least ;)
But nothing is going to last forever (or even for long), nor does this; a minor nucular incident with NK, news from China about potentially disruptive regulation, less trust in the future of Crypto investments because of whatever good or bad reasons, or people just need their Fiat money back for medical bills… you name it.
The good news: If you still believe in Cryptos and hodl you can probably make more out of your past earnings - and what you earn today is going to be a past earning anytime soon ;)
The bad news: Yes, the current raw numbers (for payments per work unit) are decreasing and will continue to decrease, unfortunately; unless there is a new hype. But in the long term that is the only trend you will ever see - so better make up your numbers and act wisely.
The bottom line: Even when your profit steadily declines, it's still a profit (given you have done the math right). And there is not much you - or any other individual - can do about that anyway.
But why?!? I’m supposed to make lotsa money out of this!!!
Since Fox News told everyone about Bitcoins, there were many people having the obvious idea to make big money by mining Cryptos; at first this seems to work since it makes more slices, but from a bigger pie also, but as soon the hype train stutters, the pie stops growing or even starts to shrink again - and so do the slices for everyone who still keeps mining:
Interest hype -> Influx of Fiat money -> Coins quotes skyrocket -> Influx of miners -> Difficulty skyrockets -> Most of the price uptrend is choked within weeks, since it’s now harder to mine new blocks.
Interest hype drains out -> Fiat money influx declines -> Coins quotes halt or even fall -> Miners still hold on to their dream -> Difficulty stays up high, even rises -> Earnings decrease, maybe even sharply, as it's still harder to mine new blocks, that may be even paid less.
Earnings are hit by... a) Planned difficulty increases (like for Ethereum) b) Difficulty increase because of an ever-growing number of miners c) Lower prices of Bitcoin (the NiceHash market trade currency in which you are paid) d) Lower prices of Alt Coins (what buyers are acquiring while using your hashing power) e) And last but not least, when using NiceHash, a possibly declining number of Buyers of hashing power
Also NiceHash earnings/trends are additionally complicated by the fact, that these mechanisms affect tons of Alt Coins, in slightly different ways, and since Buyers "trade" Bitcoins against Alt Coins by using your hashing power, it may, at times, look like someone is cheating; but usually it's just convoluted market mechanics - and the plain truth that you only feel cheated on if you lose, but never when you win ;)
Be warned that this process(es) may happen slowly over several months, in just a couple of weeks, and sometimes within a few days only, and ups & downs of 10,20,30 percent (and more) are nothing unusual!
So, how to judge what’s going on with my profits?
Check the crypto economy - and don’t forget (I might now repeat myself): NiceHash is just a marketplace which runs on BTC; read below how this basically works out.
Check the mid/long term hashrate on NiceHash for your favorite algo(s) - the higher it gets, the smaller is the slice of the (payout) pie you will be able to acquire with the same equipment!
Check the news! Cryptocurrencies are a hot topic nowadays, and many people act on what is in the news; and whatever is going on will probably affect prices in either way and thus your profit.
Simple breakdown of the relationship of BTC payouts by NiceHash, BTC/ALT Coins rates, and Fiat value:
BTC quote | ALTs quotes | BTC payout | Fiat value ----------------------------------------------------- UP | UP | stable*) | UP stable | UP | UP | UP UP | stable | DOWN | stable*) stable | stable | stable | stable DOWN | stable | UP | stable*) stable | DOWN | DOWN | DOWN DOWN | DOWN | stable*) | DOWN
*) If the BTC payouts or Fiat values are really going to stay the same in these cases, or drop, or even rise, of course, depends on the exact delta of the changes between BTC and ALT.
Note: Since BTC is by far the leading Cryptocurrency, you will most probably watch ALTs drop when BTC drops quite often, but not necessarily see ALTs rise as soon BTC rises; all the Fiat (money) value they all together represent simply needs to come from somewhere, and it’s much more likely that new investments aka “fresh money” is pulled into BTC first, and trickles down to ALTs.
Some rather obvious remarks:
Many points are intentionally oversimplified - as otherwise this post would need to be at least ten times as long; the best you can do to stay ahead of the pack is to do your own research and learn about what you are doing here - ideally before doing it!
Even if NiceHash is often jokingly (more or less) called NoobHash, because it's that easy to start with, staying a Noob will pull you back, rather sooner than later, in an ultra-fast paced economy like this.
Don’t expect strangers here or elsewhere to hold your hand all the time, no matter how helpful some people still are. In the end, we all (also) compete against each other ;)
Keep yourself well informed to avoid nasty surprises!
Disclaimer: I'm a user - Seller like you - not in any way associated with NiceHash; this is my personal view & conclusion about some more or less obvious basics in Crypto mining and particularly using NiceHash. Comments & critics welcome...
A Bitcoin FAQ for GBS -Short version- 1) Should I buy bitcoins? No. 2) But if they drop down to a dollar, then I can snap some up and No. You are one of thousands of people who want to do this. Telling the thread that you are going to do this doesn't make you look smart. 3) How does this shit work? It doesn't make any sense! No, it really doesn't. It's impossible to explain bitcoin in anything less than tl;dr terms so you should probably just not worry about it. Go do something useful instead of reading this awful thread full of socially inept people laughing at another group of socially inept people. -Long version- 1) I really want to understand how bitcoin works. Please. Okay, you asked for it. With some severe simplifications and a painfully neutral pov: Bitcoin is a decentralized "cryptocurrency". It is a network of software that shares a common protocol designed to allow secure transfer of bitcoins between users. It uses distributed cryptography to verify transfers and balances. Bitcoin is also the subculture that has sprung up around this software, which includes additional software that is not part of the core design. The most high-profile of these are trading services that allow users to buy and sell bitcoins using US dollars and other real-world currencies. Bitcoins users have files called "wallets". This is sort of a misnomer, because these wallets do not actually contain anything except a cryptographic private key. One's bitcoin balance is actually recorded inside the distributed network, which is why you cannot edit your wallet file to give yourself more bitcoins. Bitcoins can be added to a particular balance using a public bitcoin address, which acts as a cryptographic public key. The private key is contained in the wallet, and bitcoins cannot be transferred out of a balance without that private key. (If you don't understand public-key cryptography, do some reading because you can't understand bitcoin without it. While you're at it, read up on cryptographic hash functions.) Transfers between wallets are recorded in "blocks", which are verified by the distributed cryptography system. The act of verifying transactions and then adding those transactions to the historical "blockchain" is called "mining". Transactions are stored in the blockchain using cryptographic hashing methods which allow the entire blockchain to be independently verified for consistency and integrity. In order to make blockchain verification an attractive prospect, the design of bitcoin gives "bitcoin miners" two reasons to tie up their computing hardware to maintain the network, both based around competition. The first reason is that bitcoin transfers can contain optional transaction fees which are paid to the miner that verifies the transaction. Paying a transaction fee makes it more likely that your transaction will be processed in a timely manner, because those transactions are more attractive to the miners. The second reason is that mining gives the miner a chance of receiving a batch of newly created bitcoins. The more cryptographic power one brings to bear, the more likely it is that the next batch of new bitcoins will be yours. There are a fixed number of bitcoins which can ever be mined, and the difficulty of the cryptography will continue to increase over time. An important aspect of mining is that the network is designed to handle one complete block (containing a specific number of transactions) every ten minutes. If more computing power is added to the distributed network, making the blocks take less time to process, the difficulty of the cryptography increases. The inverse is also true. This scaling difficulty is meant to help prevent a single user or group of users from gaining complete control over the network by using more computational power. The distributed verification process determines the "truth" of a transaction block by whether or not the majority of the network (as measured by contributed cryptographic work) considers it valid. The original designer thought it unlikely that any one user or organization could acquire a majority of the network's cryptographic power and therefore "cheat" the system in some way. Bitcoin verification power is typically measured in the speed at which a system can perform cryptographic hashes, which are required to verify the blockchain and to add transactions to it. The difficulty of the mining process is determined by the amount of "hashing" required to add a new block to the chain. These are the core aspects of the original bitcoin design. In short, bitcoins are assigned to "wallet" addresses, with balances stored in a distributed "blockchain". The accuracy of the blockchain is verified by "miners", who have a vested interest in doing so through a reward system. Attacks (such as double-spending) are prevented by the distributed nature of the network, where any invalid transactions will be caught by other mining systems. 2) That was painful to read. It was painful to write. 3) So what went wrong? A lot of things, some of which are due to problems with the original design, and others which are due to problems with the bitcoin community. Bitcoin was originally a proof-of-concept project by an anonymous crypto specialist who used the pseudonym "Satoshi Nakamoto". It is unlikely that he was actually Japanese, but his identity still remains a mystery. Bitcoin was meant to be a testing ground for theories about how cryptocurrencies might work. Initially, bitcoin was a curiosity and there was little participation in the network, as bitcoins had no real-world worth. This all changed as bitcoin was discovered by three types of people. First, there were the internet libertarian types who liked the idea of a currency that was not controlled by a government. For them, bitcoin represented an ideology. Second, there were people who wanted to use bitcoin as a semi-anonymous international currency for illegal transactions, such as drugs, weapons, or illicit pornography, as well as a possible method for laundering money. For them, bitcoin represented safety from the law. Third, there were people who viewed bitcoin as a method to get rich by getting in on the ground floor of a new kind of money. These people saw bitcoin as an investment. The history of bitcoin is too complicated to go into detail here, but these three groups shaped the bitcoin network and community into what it is today, which is a gigantic goddamn mess of idiocy, greed, and bad decisions. 4) What happened to the neutral pov? I'm tired. 5) Well, then where is bitcoin right now? Right now, the bitcoin community has been overwhelmed by the use of bitcoin as, essentially, a commodity to be bought and sold. Individual bitcoiners may talk about the future of bitcoin as a currency, but the vast majority of bitcoin transactions today are the buying and selling of bitcoins themselves using real-world money, and not the buying of goods or services using bitcoins. There is an extremely limited number of things you can spend bitcoins on without first converting them to dollars (or whatever), and many of those are done through third-party bitcoin-to-dollars systems where the merchant never sees any bitcoins. Bitcoins are purchased and sold much like other commodities such as gold, petroleum, and the like. Exchange services are set up, where people who wish to buy the commodity put forth "buy orders", where they offer to buy a certain amount of the commodity at a given price, and these buy orders are matched with "sell orders" put in by people who wish to sell that commodity. There are several bitcoin exchanges that let one buy and sell bitcoins using dollars and other currencies, but the most important one is "mtgox". Amusingly, Mtgox started life as "Magic: The Gathering Online eXchange", an exchange service for virtual Magic: The Gathering cards. When someone says "bitcoin is at $50" or something similar, usually they mean that the most recent buy order on mtgox was for $50 a bitcoin. The market prices for bitcoin have historically tended to rapidly inflate and then crash spectacularly. Bitcoin's market value has dropped by 50% in less than a day on multiple occasions. Regardless, true believers in bitcoin (typically the libertarians or the investors, who are sometimes one and the same) keep throwing more money at the speculative market, in the hopes that one day their currency will be treated with respect by the world, or at least they'll eventually make up for their losses. Neither scenario is likely. 6) Why is this funny? Because we're children who like laughing at dumb people, and bitcoin people are a truly spectacular level of stupid. 7) So could bitcoin ever be a real currency? No, for one simple reason. Bitcoin does not scale. The network is already creaking under the weight of relatively few transactions, and more importantly, the blockchain size is increasing rapidly. The blockchain file is currently several gigabytes in size, and the entire chain must be downloaded in order to mine or verify your own transactions. You can use a third-party service to store and transfer your bitcoins, but these services have historically tended to get hacked or just suddenly vanish, taking all your internet funny-money with it. If bitcoin actually became popular as a currency and not just as a speculative commodity, the network would rapidly become even more unusably slow than it already is, and the blockchain would swell to an absurd and unmanageable size. 8) Some people seem legitimately angry about bitcoin. Bitcoin would appear to be a mostly harmless way for idiots to throw money at each other, except for the fact that bitcoin mining has (not surprisingly) become an arms race to see who can get the most hashing power online. The original design of bitcoin did not account for the possibility of specialized, expensive hardware which could make mining without that hardware almost useless. Certain kinds of ATI Radeon video cards proved so effective at performing bitcoin hashing that mining solely on a general-purpose PC CPU gives negligible results, due to the vastly increased hashing difficulty. Miners purchased huge amounts of these video cards to create custom (and often hilarous) "mining rigs", essentially converting electricity into heat and bitcoins. The stakes have been raised again with the advent of specialized bitcoin-only ASIC hardware which is even more effective than the video cards were. The future of bitcoin mining appears to be in the hands of a small minority of users who can afford this specialized equipment, making the "distributed" nature of bitcoin something of a joke. The bitcoin network now must use vast amounts of power, far out of proportion to its actual usefulness and typically generated by fossil fuel plants, just to maintain itself. It is a tremendous waste of actual real-world resources that could be better used on something important (like, for example, watching cat videos) and this makes some people actually angry at the situation. 9) Wait, what about this "BFL" thing, and who's "Atlas"? What the hell are you people talking about? Look at all these fucking words I've already written. God, what a waste of effort.
tldr: why don't you go buy beanie babies or a wayne gretzky rookie card instead?
So I've promised to write this piece for a while now, i'm going to explain why I have little faith in the longevity of cryptocurrencies in their current form. The first three are things you've probably heard before. One: Valuation I see a lot of people point to the market cap as proof of market valuation. But market cap doesn't mean anything for cryptocurrencies. Its most likely used by trading bots to essentially do index trading to hedge risks, but that's about it. In the stock market, the market cap is the value if everyone sold all of their shares of everything at the current price. Its something that wouldn't happen, because the price of a stock would go down the more its sold, but each stock is linked to a company which is linked to actual physical assets which have an actual value. If you liquidated all of a company's assets, you'd get some amount of money which could be distributed to the shareholders. Selling shares below this value would be essentially forfeiting money. Cryptocurrencies do not have this, because there are no underlying assets. Two: Production of value All publicly owned companies produce value which is, in some way, returned or removed from shareholders. This is done by a number of different ways. Dividends and stock buy backs essentially directly give profit to the investors. Re-investment of profit into the company will drive stock prices up and indirectly give money to the investor. So the stock market is not a zero sum game, money flows into it, but it also produces new money and distributes it back out. The production of new money prevents the constant need for more people to invest to keep the system afloat. However... cryptocurrencies are an inherently deflationary system. For every trade that takes place, money is removed from the system and given to third parties (exchanges, miners). These third parties do not necessarily re-invest this money back into the system. If new money stops following into cryptocurrencies, the system will eventually collapse. It is mathematically impossible to continue trading cryptocurrencies unless more and more people buy into it. Three: Volatility Currencies can't be this volatile. It is impossible to establish a system of trade on something that can swing multiple percentage points after you click buy on something. Period. OK So maybe Cryptos derive value from being useful in ways that traditional money is not. They can be used anonymously, circumvent government currencies, the system for using it is almost unhackable because its distributed. These are valuable features. But these things do not replace traditional money... At the end of the day, you still want to convert money back into your country's fiat currency. So what is the purpose of tokens? It sounds like the useful portion of this is the blockchain, not the tokens. The only use I can see for valuing the tokens is for anonymity and to pay the system that upkeeps the network that allows transactions to take place. Since anonymous transactions is basically just codeword for money laundering and drugs, lets say we value tokens based on the cost to upkeep the network. We have to pay the miners to hash the transactions to make things continue to work. So as time goes on, it requires more and more infrastructure to support the blockchain as difficulty increases. So the underlying value of the token, derived by the cost of maintaining the network, grows. ... So why is that a good system? Thats a system that increases costs by design. What prevents someone from making a better, more efficient version that costs less to maintain and probably charges lower fees to use? What prevents people from switching to these networks if all they care about is traditional fiat? Nothing. What prevents the miners from switching their hardware to service this newer, better network? The price of the coins they've already mined? Which is derived from the difficulty of mining it? Which is derived from the cost of energy and the value of their mining equipment? Shouldn't the value constantly be going down as power and hashing technology improves? Why is it going up? Lets recap 1: No physical value 2: Produces no extra value 3: Continuously decreases total market liquidity... by design. 4: Coins give very little additional value to the blockchain. You can implement a blockchain without Coins and it wouldn't have to have the weaknesses of 1, 2, and 3. 5: The current systems are designed to inflate the value of the Coins through mining difficulty. Which in a perfect world would increase the incentive to release a competing product that doesn't. 6: There is no graceful way to re-issue destroyed money, so its not possible to adopt most of the less granular systems like bitcoin without a re-design. Its possible that a large potion of the pool of coins could be rendered unusable and unrecoverable within a generation. Thats not good design. (I didn't actually talk about this one above) TL;DR This writeup was a bit of a mess because I honestly didn't feel like spending the amount of time I actually need to fully detail out everything. I write slow, it would take me like an entire day. But these systems are designed like garbage and are irreparable. They do not solve the problems they need to solve well, do not scale, and are loaded with perverse incentives. Investing in the current coins is like investing in dial up modems. They're going the right direction, but you just can't fix these systems. They need to be re-designed. Blockchains have a future. Cryptocurrencies probably have a future, but not in this form. Also its possible that the entire market is controlled by bad actors and it could collapse at any moment. But thats a whole other story.
Novice, Intermediate or Expert? A Quiz to Test Your Bitcoin Knowledge
Think you know the ins-and-outs of bitcoin? Test yourself with 30 questions that grill you on Bitcoin’s history, technology and politics. The 30 questions are split up into three segments ranging from novice to intermediate to expert, and cover a wide range of topics across the Bitcoin landscape. If you get stuck or want to check your answers along the way, an answer sheet has been added below the quiz. Of course, these questions cover only a few points about Bitcoin so far — with so many new developments taking place, there is always more to learn. Good luck! Novice Questions 1. Who created bitcoin? a. Vitalik Buterin b. Gavin Andresen c. Satoshi Nakamoto d. Charlie Lee e. Jackson Palmer 2. What is the original document that proposed Bitcoin, considered by many in the space to be a “must read”? a. The Bitcoin White Paper b. The Golden Proposal c. E-Money: Bitcoin and the Blockchain d. The Bitcoin Manifesto e. The Bitcoin Constitution 3. What is the name of the bitcoin exchange from Japan that famously collapsed in 2014 due to a devastating hack? a. Tradehill b. Bitstamp c. Mt. Gox d. Blockchain.info e. Bit Trade 4. How many bitcoin will ever be created? a. Unlimited b. 77,340,109 c. 3,500,000 d. 21,000,000 e. 18,650,000 5. What is the name of the off-chain scaling solution that is being developed to mitigate bitcoin’s fees and long transaction times? a. Instasend b. Second Layer Network c. Lightning Network d. Quick Net e. The Bitcoin Payment Network 6. Which of the following statements is NOT true about bitcoin wallets? a. Wallets can come in many forms, as long as they hold your private keys. b. Wallets have addresses that anyone can use to see the current number of unspent bitcoins in them. c. The only thing someone needs to access a wallet is the private key. d. It is possible to send bitcoin by signing the transaction offline and then broadcasting the transaction later. e. To open a wallet you must submit a request to the wallet provider. 7. What is the name of the technology underlying Bitcoin? a. Bitchain b. Blocklink c. Blockchain d. CoinLedger e. Satoshisquare 8. True or false? Bitcoin can be sent to an Ethereum address. a. True b. False 9. The first underground marketplace on the dark web which used bitcoin as its native currency and was created by Ross Ulbricht was called: a. Black Onion b. BTC Market c. East India Trading Company d. Silk Road e. Worldwide Drug Emporium 10. Bitcoins can be divisible down to the eighth decimal point. What is that unit called? a. Bit b. Satoshi c. Naki d. Shill e. Bitsat Intermediate Questions 11. Which traditional stock exchange was the first to list bitcoin futures contracts? a. The New York Stock Exchange (NYSE) b. The Intercontinental Exchange (ICE) c. The Chicago Mercantile Exchange (CME) d. The Chicago Board Options Exchange (CBOE) e. None of the above. Futures contracts are only available on cryptocurrency exchanges like BitMex and Bitfinex. 12. The computers that find new blocks are called: a. Accountants b. Miners c. Mitigators d. Associates e. Verifiers 13. Which of the following is NOT true about Bitcoin Cash, a fork from Bitcoin? a. Bitcoin Cash was created over an ongoing debate within the Bitcoin community over scaling and transaction speed. b. Roger Ver uses bitcoin.com to convince new investors that Bitcoin Cash is the original bitcoin. c. Bitcoin Cash is commonly referred to as “Bcash” because (some) bitcoin proponents don’t want to give the forked currency the brand recognition that Bitcoin has accumulated since 2009. d. Bitcoin Cash uses the SHA-256 hash function (the same as Bitcoin). e. Bitcoin Cash removed its block size limit completely. 14. Where is the Bitcoin processing server located? a. Washington, D.C., USA b. London, England c. Undisclosed location d. The United Nations votes on a new location every two years e. None of the above — Bitcoin has no processing server 15. What date was the Bitcoin network launched? a. November 5, 2008 b. May 1, 2010 c. January 3, 2009 d. December 31, 2008 e. April 23, 2010 16. When was Bitcoin’s all-time high exchange rate achieved (as of 9/11/18)? a. January 12, 2016 b. July 15, 2017 c. December 17, 2017 d. August 3, 2018 e. January 10, 2014 17. Which of the following statements is true? a. Bitcoin is owned by the NSA. b. By 2030, all bitcoins will have been mined. c. Bitcoin has smart contract capabilities. d. Before Satoshi created Bitcoin, he and a group of developers premined roughly 1 million coins. e. Only select people can mine bitcoins. 18. How often, on average, can we expect a new block be found by miners? a. > 1 second b. 2 minutes c. 10 minutes d. 60 minutes e. 6 hours 19. What is Bitcoin Pizza Day, May 22nd? a. A day every year where people who hold bitcoin pay forward a random pizza to a stranger b. The day when a computer programmer, Laszlo Hanyecz, paid 10,000 bitcoins for two pizzas in 2010 c. The day Satoshi announced his favorite food is pizza d. The day Vitalik compared bitcoin’s security to that of a soggy pizza e. A day sponsored by Pizza Hut where you can pay for pizza with bitcoin 20. How many new bitcoins should be created each day with the current block reward, on average? a. 2,200 except for February 29 on leap years b. 1,800 c. 5,000 d. 7,200 e. 150 Expert Questions 21. What is the difference between a soft fork and a hard fork? a. A soft fork happens when the code of a project is copied with permission of the original developers. A hard fork happens when the code of a project is copied without the permission of the original developers. b. A hard fork is a backwards-incompatible protocol change because it makes previously invalid blocks or transactions valid. A soft fork is a backwards-compatible protocol change because it makes previously valid blocks or transactions invalid. c. A hard fork occurs when miners in a mining pool cannot agree on how the block reward should be divided. A soft fork occurs when miners in a mining pool collectively decide to change how block rewards should be distributed. d. None of the above. 22. What does ASIC stand for? a. Applied Socioeconomic Investment Compository b. Application Specific Integrated Circuit c. Anonymous Spending Instrument for Cryptocurrencies d. Alternative Synthetic Interoperability Circuit e. Antiquated System for Implied Cryptography 23. What does an ASIC do for Bitcoin? a. Allows consumer access to high-level investment information, similar to a Bloomberg terminal b. Allows users to trade cryptocurrencies between different blockchains c. Anonymously allows users to send cryptocurrencies that aren’t entirely private d. Performs one specific task of solving a mathematical problem in order to find a new block e. Allows developers to cross reference current technology stacks with older languages 24. Is Bitcoin truly anonymous? a. Yes, people who use bitcoin cannot have their transactions traced by anyone. b. No, bitcoin addresses are derived from IP addresses. c. No, all transactions are recorded on a global transparent ledger that can be traced using analytical technologies. d. No, addresses openly show the name of the user. e. No, bitcoins can be linked to a user’s social security number. 25. What is SHA 256? a. A secure hashing algorithm used by Bitcoin, originally designed by the NSA b. A set of rules that miners and nodes must follow c. A scheme devised by Craig Wright to convince people he is Satoshi d. An annual conference in New York for blockchain enthusiasts e. The language Satoshi and early developers used to communicate behind closed doors 26. What is a nonce? a. An empty value in each block that is filled by the miner of that block b. Another name for a node c. A mining device faster than an ASIC d. A part inside a processing chip used in mining e. A name for a troll in Reddit forums 27. What is “difficulty” in relation to Bitcoin? a. A measure of how hard it is to explain what Bitcoin is b. A measure of how difficult it is to find a hash below the target c. A measure of long it takes to send bitcoin between addresses d. A measure of how difficult it is for bitcoin to move a certain number of basis points e. A measure of how hard it is for Bitcoin to recover to its all-time high 28. What is multi-sig verification? a. An older method of confirming bitcoin transactions now replaced by single-sig verification b. Verification that a user is allowed to hold bitcoins in a certain address by requiring multiple signatures from friends and family c. A form of verifying if someone is telling the truth by having multiple signatures from people monitoring the event taking place d. A process by which miners select which transaction to verify by having three other miners create a signature giving permission for the transaction to be verified e. A technology to verify wallets by requiring multiple signatures to process a single transaction with enhanced security 29. Bitcoin consumes roughly 1 percent of the world’s energy consumption. What does this mean about its security? a. A malicious actor doesn’t need to consider the total energy consumption in order to successfully execute a 51% attack. b. Bitcoin is secure to the point that it would require approximately 0 .0001% of the entire world’s energy consumption to attack the network. c. Bitcoin is secure to the point that it would require approximately 1% of the entire world’s energy consumption to attack the network. d. A malicious actor would need 10 times the amount of Bitcoin’s energy consumption in order to successfully attack the network. 30. What is a Merkle Root in Bitcoin? a. A hash of all transactions in a block that allows any specific transaction to be verified without downloading the entire blockchain b. A series of complex data that uniquely identifies the owner of an address c. A program designed by David Merkle that uncovers the largest inactive bitcoin wallets d. A cryptocurrency developed by the chancellor of Germany e. A part of a complex system of underground “roots” that power the Bitcoin blockchain How did you do? Answers:
c. Satoshi Nakamoto
a. The Bitcoin Whitepaper
c. Mt. Gox
c. Lightning Network
e. To open a wallet, you must submit a request to the wallet provider.
d. Silk Road
d. The Chicago Board Options Exchange (CBOE)
e. Bitcoin Cash removed its block size limit completely. (The limit is actually 32MB.)
e. None of the above — Bitcoin has no central server
c. January 3, 2009
c. December 17, 2017
c. Bitcoin has smart contract capabilities
c. 10 minutes
b. The day when a computer programmer, Lazlo Hanyecz, paid 10,000 bitcoins for two pizzas in 2010
b. A hard fork is a backwards incompatible protocol change because it makes previously invalid blocks or transactions valid. A soft fork is a backwards compatible protocol change because it makes previously valid blocks or transactions invalid.
b. Application Specific Integrated Circuit
d. Performs one specific task of solving a mathematical problem in order to find a new block
c. No, all transactions are recorded on a global transparent ledger that can be traced using analytical technologies
a. A secure hashing algorithm used by Bitcoin, originally designed by the NSA
a. An empty value in each block that is filled by the miner of that block
b. A measure of how difficult it is to find a hash below the target
e. A technology to verify wallets by requiring multiple signatures to process a single transaction with enhanced security
c. Bitcoin is secure to the point that it would require 1% of the entire world’s energy consumption to attack the network. (side note: bitcoin mining, while energy intensive, can be done in an eco-friendly, even carbon-neutral, manner. And it’s getting better all the time.)
a. A hash of all transactions in a block that allows any specific transaction to be verified without downloading the entire blockchain.
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Mining bitcoin is not as easy as it might seem. In this video, we highlight the biggest reason that most crypto miners end up losing money. --- This episode is sponsored by Americas Cardroom, the ... Mining Bitcoin at home is no longer profitable, the Bitcoin mining network difficulty is rising much faster than the Bitcoin price. Lets review Bitcoin Minin... #Mining #Ethereum #Cryptocurrency Welcome to the 8th episode of CMDL , December 27, 2019. We go over talk a little about the difficulty of Ethereum , Bitcoin, Monero & LiteCoins difficulty for ... Genesis Mining was founded in 2013 Butterfly labs, bitcoin block, block erupter, difficulty, asic miner, Bitcoin, how much will bitcoin difficulty increase, bitcoin mining, what is bitcoin ... 01:18 Market Update 02:18 BTC Difficulty and Hash Rate Drop 05:01 Satoshi Nakomoto Won't Sell Bitcoin 07:28 eToro Market Analysis 10:59 Paxful in India 13:36...