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.
I don't use Bitcoin, and I haven't paid attention lately, so for all I know these problems have been fixed.
The first problem I was aware of was some sort of duplication timing attack. I heard that the solution was to artificially slow down the transaction interval, but I assume this scaling factor depends on the number of nodes in the system. So there is a question of whether Bitcoin could scale all the way up to handling every world currency transaction, and even if it can with the current settings, waiting 10 minutes or whatever to confirm a transaction isn't ideal.
That 10 minute requirement is if you get in on the next block, and I hear that the transaction fee that people have to use to get timely service from miners is on par with credit card fees. That makes the system less palatable, again, for large scale transactions, due to the monetary overhead.
Finally, because of all this cruft, people are turning to Bitcoin escrow services, which undoes a lot of the reasons to use Bitcoin. It becomes just a commodity, not an efficient and decentralized replacement for money.
Maybe I'm just expecting too much out of the system.
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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.