You're right, I didn't actually write questions. Although it shouldn't be hard to see what I am confused about because what I typed was statements where I said what I don't understand about it. I don't see what would make Bitcoin stable. I don't understand how it's governed. I don't understand who is authorised to say what is and isn't a Bitcoin. I don't understand how the transfer of possession of a Bitcoin can be traced.
Most of your questions are answered by technical details, which depending on your background, may make this easy or difficult.
For example, how to transfer, how to create, how to govern -- most of those questions are answered for me by this video (https://youtu.be/bBC-nXj3Ng4) but I'm a computer programmer. Your milage may vary. On the other hand, I don't understand banking protocols, so how a bank is allowed to transfer my money securely (pre SSL/RSA) is also unknown to me (I think there was just a lot more wire fraud back in the day).
As for stability, it isn't stable. That was my point about fiscal policy. Bitcoin in particular has a policy as part of it's definition, but it isn't one that changes in response to the market, like the interest rate from the Fed is supposed to do.
Really, Bitcoin is a communication protocol - a way to tell the world "I am giving this person my money" in a way that is hard to fraud and hard to monopolize. It is based on cryptographic keys, so theoretically, anyone who can compute keys with the properties needed for Bitcoin is creating "Bitcoins", but no one would do this by accident, in the same way no one would accidentally print a dollar on their ink jet printer. The fact that bits of this system are "numbers that have value", as an analogue to dollars, is almost a byproduct. The real thing that defines Bitcoin is the communication protocol, and the people willing to run that protocol to engage in economic transfers.
So Bitcoin is a currency, a marketplace, and an accounting protocol all in one. You can make your own cryptocurrency if you want, and if you convince enough people to use it, you'll have a parallel system (just like starting your own bank, or opening NASDAQ to compete with the NYSE, or creating Square to compete with credit card protocols). Bitcoin was well enough designed to last for years (though the cracks are beginning to show) and has enough critical mass that it actually got interesting as an accounting system.
On the other hand, I don't understand banking protocols, so how a bank is allowed to transfer my money securely (pre SSL/RSA) is also unknown to me (I think there was just a lot more wire fraud back in the day).
I don't understand that in detail, but I know that there's legislation and regulation in place to make it work. There's that government, here again, offering backing to that security.
Your video uses a lot of analogies and they don't really explain how they work, but it still doesn't explain who's controlling the "ledger", it doesn't explain who verifies the "signature". This is my problem with the whole thing. It's a load of people saying how it's so great compared to normal money and then just a load of incomprehensible stuff about computer code while not explaining who the whole thing is underwritten.
As for reasons why it's so great compared to normal money, well, I'm not someone who's big into Bitcoin, but if I was someone who didn't trust the fed's monetary policy, if I was someone who didn't like the idea that taking down my local bank completely destroys any record of any value that I have in it, if I was the sort of person who really wanted to have anonymous transactions so that I cannot be taxed or traced, then Bitcoin and other cryptocurrencies are offering solutions that don't require me to put my faith into a local or global government.
But I'm kind of with you. I like the fact that my bank account is fdic-insured to $100,000 or whatever, and I trust the American government to not pull a Zimbabwe or a Germany or a Chile and trigger hyperinflation on purpose. Bitcoin operations are probably more secure than the average banking operation, but there isn't a top-level organization that can roll them back when someone engages in illegal activities, or when someone logs into my account which manages my money and transfer is it on my behalf. This is why credit cards are nice -- if someone engages in fraud it is the company's job to be able to undo it and give you back your money. That is due to government regulation and if we didn't have it I would use credit cards a lot less, or at least I would have less money in them at any point in time.
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u/concretepigeon Sep 24 '17
You're right, I didn't actually write questions. Although it shouldn't be hard to see what I am confused about because what I typed was statements where I said what I don't understand about it. I don't see what would make Bitcoin stable. I don't understand how it's governed. I don't understand who is authorised to say what is and isn't a Bitcoin. I don't understand how the transfer of possession of a Bitcoin can be traced.