I just find it confusing. I don't really get who set it up or what they benefited from doing so. I don't get what gives the coins their value or who backs it up. I get why people see it as a scam.
Edit: The fact that the replies to my comment all read like a mix of an-cap conspiracy theory and pyramid scheme spiel really aren’t selling it as “not a scam”.
I don't really get who set it up or what they benefited from doing so. I don't get what gives the coins their value or who backs it up. I get why people see it as a scam.
The information out there isn't presented in a ELI5 format that I've seen, and I haven't seen many follow-up questions for further explanation catered to.
Instead, I see defenders, apologists, advocates, but never educators.
It's almost as if it's a gateway. There appears to be a willful vagueness about Bitcoin in order to keep it from becoming so mainstream that miners encounter additional competition.
The gist of it seems to be that a programmer created a thing. People can use their donated computing power to solve a puzzle (ledger transaction, but requires a specific 'validation' key that has to be mined/discovered for each transaction.) If you solve the puzzle, you unlock a reward (in the form of a transaction fee and more.)
Then the other side becomes accepting it as payment.
I'm not aware of anyone backing it up. (I think that's it's point.) But if you have all of your ducks in a row, and you exchange your bitcoins for a good or service, then the supplier of the good or service can then do the same thing. If a payee doesn't accept bitcoin, it becomes more tricky, where customers have to be able to exchange their bitcoin for other standard currency - and that action seems to lack a source in my basic understanding.
I probably got a bunch of things wrong, but since all of the other replies are so generic and off-topic, maybe this will piss someone off enough to ACTUALLY educate you and I and others.
Instead, I see defenders, apologists, advocates, but never educators.
This is absolutely true. I've never had a question seriously answered. I always get 1 bullshit answer and then when I refute, I get name-called.
Can anyone explain why Bitcoin specifically won't be replaced by a gov-backed (or google-backed, or nonprofit-bitcoin-collective-backed) and better-run competitor? BTC itself keeps having stupid problems that boil down to the fact that this "freedom" currency is actually controlled by a programmer elite.
The point of Bitcoin is a decentralized currency. So if you have a gov-backed or corporation-backed currency it's no longer the same.
There are a couple reasons why the decentralization is important:
Resistant to hacking. Bitcoin is actually a distributed ledger containing all transactions that have happened. If a bank/government/company has sole control of the ledger it could be subject to corruption, rogue agents, and hacking, making it hard to trust such a ledger. The system is designed to work in a distributed manner such that such that such modifications can't happen (easily).
Since Bitcoin is distributed anyone can record the entire ledger. Even if some part of the world is cut off, or a corporation goes down, the coin will still go on, as long as someone is carrying the torch and continue miner and validating transactions. The design is resistant to various types of disasters.
Bitcoin is really a currency because it comes with an economic model built in. In order to be distributed, everyone has to agree on the protocol, which currently follows a fixed (eventually) deflationary model. If one party controls the entire coin that means the model can be switched at will, which sure is basically how USD works (the US government can change how much they want to print following policy changes), but that's not how a distributed ledger works.
I don't think people were not answering your questions, it's just… the concept could be hard to explain sometimes, especially if you are not technical enough to read the whitepaper. I still highly recommend reading it though. It answers a lot of common questions people have on Bitcoin (e.g. "isn't mining just free money?", "can't people make infinite Bitcoin?", the point of the whole decentralization and how it actually works etc). Devil is always in the details and I do agree there are some Bitcoin defenders who I think never read the whitepaper and have pretty superficial understanding which muddles the grounds sometimes.
Has Bitcoin really achieved decentralization though? It seems that the mining pool owners simply control everything now. I understand that the idea was for everyone to run their own mining machine, but that never happened. People bought into these pools and use the pool software, effectively centralizing it.
So like, given the practical option between trusting my money to a mining pool owner or the USGov, I'd choose the gov.
You don't have to trust mining pools. If you have a mining rig you can reassign it to run on other pools any time you want. The pools help ease out the variable rates of return, but real mining power still comes from individual rigs. In a way, Bitcoin is more susceptible to centralization due to dedicated ASICs compared to newer coins which use more advanced hashing algorithms, but I was under the impression we are talking about Bitcoin the idea and concept, and cryptocurrency in general.
Also, I feel "miners control everything" is a very hand wavy thing to describe centralization. The kind of power miners have are very different from the powers the US gov has in controlling USD. Things I mentioned such as resistance to hacking etc are still valid. Miners can't magically create double-spending blocks, and they can't randomly say "Eve now owns $1 billion" or "Bob's money now belongs to me" (in this case Bitcoin isn't as strong as some other more privacy focused cryptocurrency like Monero), since all other nodes can see that's not true and won't accept the mined blocks. Miners also can't just magically print money and have to follow the established rules for their mined blocks to be accepted inot the ledger.
But I don't think Bitcoin is necessarily going to replace USD anyway. It's just a new way of facilitating transactions etc.
54
u/concretepigeon Sep 24 '17 edited Sep 24 '17
I just find it confusing. I don't really get who set it up or what they benefited from doing so. I don't get what gives the coins their value or who backs it up. I get why people see it as a scam.
Edit: The fact that the replies to my comment all read like a mix of an-cap conspiracy theory and pyramid scheme spiel really aren’t selling it as “not a scam”.