What is Bitcoin ?

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What is Bitcoin ?

  • Malcolm Heights

    One of the first questions people ask and the hardest  question to answer is exactly what Bitcoin is. I’ve put together how I understand it but my understanding is open for refinement.

    Bitcoin is secure digital data that you control.

    When you deposit your money in the bank it goes on a centrally controlled ledger but the specific bills you deposited go into a general pool. When you own a specific Bitcoin it goes on an open ledger where you are able to hold on to that specific “coin” attached to a block chain. That’s gives you control over a specific “coin” that you have access too.

    If you loose your key then you have lost access to your coins and you have no recourse like you would at a normal bank.

    It is counterfeit proof because your specific Bitcoin within the block chain cannot be duplicated because it has a unique numerical signature.

    It’s utility comes from 1000’s of computers that interpret transactions and transcribe them onto an open ledger as well as verify if “coins” have been spent so that duplicate transactions are not made. Bitcoins contain no weight and don’t take up any space and the open source system’s ability to transmit value securely to anywhere in the world and do it free from transactions fees, creates a unique form of value.

    Actual Bitcoins are an abstract property maintained by a programed code with a set number of available “coin”. The set market cap of available coin is 21 million and they are slowly released into the economy through “mining”. The limited number of coins and the “valve” coded into the mining program keep Bitcoins from inflating in the same way a fiat currency would.

    These aspects, control of a specific “coin”and scarcity combined with a set code that defines the parameters of the program, creates what I would call an “abstract property”. It’s intrinsic worth is valued differently then gold but in its utilitarian value.

    If you look at what an “abstract of title” is Bitcoin fulfills those same obligations written into the open source code. It’s brilliantly conceived.

    “An abstract of title is the condensed history of title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and enc umbrances affecting the property and a certification by the abstractor that the history is complete and accurate.”

    Another aspect of Bitcoin that is different from typical Capitalist ventures is that it is not centrally controlled, owned any an one individual or under IP or patent law. It is collectively owned by people who have bought into Bitcoin. It is in a sense a world wide “natural” resource accessible to any one who can afford to buy into it.

    Cyber currencies are the money of the future.

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    • Chris Pacia

      I prefer this definition from Gizoogle:

      Bitcoin is the currency of tha Internet: a gangbangin’ finger-lickin’ distributed, ghettowide, decentralized digital scrilla. Unlike traditionizzle currencies like fuckin dollars, bitcoins is issued n’ managed without any central authoritizzle whatsoever: there is no posse, company, or bank up in charge of Bitcoin. I aint talkin’ bout chicken n’ gravy biatch fo’ realz. As such, it is mo’ resistant ta wild inflation n’ corrupt banks. With Bitcoin, you can be yo’ own bank.

      Bitcoins is pimped as a reward fo’ payment processin work up in which playas offer they computin juice ta verify n’ record payments tha fuck into tha hood ledger n’ shit. Called mining, dudes or g-units engage up in dis activitizzle up in exchange fo’ transaction fees n’ newly pimped bitcoins.

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        Toni Sopocko

        ^^What HE said^^

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      Dave Scotese

      Jeffrey Tucker’s recent piece on anarchy in deplaning got me thinking.  Bitcoin has some qualities for reasons of a slightly different nature than Malcolm wrote.  The reasons are because everyone agrees.  In fact, if someone wanted to disagree, they could make something like bitcoin, an “alt coin,” and try to get people to use it.  But everyone who does agree causes the following to be true, for the stated reasons:

      1) Bitcoins cannot be counterfeited because the software we use traces each bitcoin back to the previous address that held it, checking for any transaction that sent it somewhere else.  If you have software that broadcasts bitcoin transactions but doesn’t do this, the data you send to the Internet will be ignored.

      2) If you lose your key, you’re out of luck because the software requires that key in order to move bitcoin from your bitcoin address to another address.  If you have software that moves bitcoin but doesn’t require the key, you can use it, but again, the data you send to the Internet will be ignored.

      3) A bitcoin is created by a computer that finds a “magic number” which, when used in a “hashing algorithm” in tandem with all the valid transactions that people have broadcasted to the Internet since the last “magic number” was found, produces a very rare result.  Think about going to the beach tomorrow and finding in your eye again the one grain of sand that you plucked from your eye last week at the beach.  It’s a bit rarer than that, I think.  This has value because any change to any of the included transactions will change this result to one that isn’t so rare, and everyone will know a transaction was changed and ignore the change.  So the ledger is safe.

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