
What in the Name of Zeus is Bitcoin? - AndrewGregory
http://www.linuxvoice.com/bitcoin/
======
thegeomaster
Although I really love crypto and innovative solutions with it, I am a little
embarrassed to say I've never actually put a lot of effort into understanding
how Bitcoin and other cryptocurrencies work under the hood. This article has
pretty much cleared it for me (although I'll surely refer to Satoshi's
original paper for some further clarification). Nice read.

Somewhat unrelated---I didn't know that the original Bitcoins were not spent!
That's really strange to hear; I can hardly imagine a person resisting the
urge to cash them in at some point (whatever the reason of resistance). Crazy
stuff.

~~~
btczeus
"cash them"? I think you meant "spend them". Remember bitcoin is money, why
convert it to another form of it? How would you "cash out" bills? Convert them
to gold? The "What is money" section of the article taught you nothing?

~~~
thegeomaster
Sorry, it was a slip of tongue and has to do with the meaning of equivalent
words in my native language---what I meant to say was closer to "exchange them
for a form of money you can buy a yacht with." Not sure why the hostility,
though, we are all wrong sometimes.

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btczeus
Stock price graphic plots should always use logarithmic scale. Spot the
difference:
[http://bitcoincharts.com/charts/bitstampUSD#rg60zczsg2012-01...](http://bitcoincharts.com/charts/bitstampUSD#rg60zczsg2012-01-01zeg2014-07-25ztgWzm1g10zm2g25zl)

~~~
chollida1
I'd disagree.

Plot MSFT US Equity over the past 10 years and tell me how a logarithmic scale
on the y axis would improve over a regular y axis?

Most stocks don't grow logarithmically, especially over shorter periods of
time.

Not to go all appeal to authority, but Bloomberg and Reuters, the two top
names in financial information show their charts using a regular, non
logarithmic scale. If you think logarithmic is always better you should take
it up with them:)

 __EDIT __, the link below actually illustrates my point as it says that
logarithmic is good for large jumps, which as I mentioned, don 't usually
happen over the time periods that people view returns.

~~~
btczeus
Well then think again. [http://stockforecast.wordpress.com/2010/03/05/using-
logarith...](http://stockforecast.wordpress.com/2010/03/05/using-logarithmic-
price-scale-for-stock-performance/)

So you say a jump from $30 to $31 is equal to a jump from $3 to $4. I thing
that is misleading.

When price jumps are small the error also gets small, but it is still there.

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jordigh
I like the last box. "What is money?" I think it highlights that we don't
really understand ordinary money, let alone bitcoins.

~~~
mcdougle
Yeah, I find that most people really don't know what money is. They think the
cash in their hand has some sort of intrinsic value, but can't explain it (and
don't want to think about it). I know I was like that until I graduated from
school and started thinking about (and researching) investing.

~~~
josu
This is a genuine question. What do you think that money is? Because I have
also asked myself that question, and I have read about it, but I don't seem to
be able to give a definite answer.

~~~
mcdougle
Well, let's see if I can put this into words well enough (I'm not great at
that sometimes).

In very basic terms, it's a medium of exchange.

"Money" is not some objective, universal concept (although people think it
is). It's not a naturally occuring phenomenon (I think I've read about chimps
using some very simple mediums of exchange in the wild, which is pretty cool,
but I think it's pretty exclusive to us and chimps). It's a human creation,
and a tool to make our lives easier, much like any other form of technology.

It was created as a storage of some value you produced. Basically, by doing
some work for someone, or giving something to someone, there was an exchange
of value -- your item or your time/effort was worth something, and it was
moved from your possession to theirs. If there was no money, you would need to
immediately receive something else of similar value, or else the value would
simply dissapear (you did some work and got some chickens, for example, which
you could eat). Unfortunately, not all work is equal, and not all items of
value are equal -- if you had 1 sheep, and your buddy had a cow, and cows are
worth 2 sheep at that given moment, you could not do business. It gets even
more complicated when services, rather than items, are provided. So we
invented a system of "owing" value.

"Money" is not defined necessarily by currency, or by gold and silver, or
anything else we've used throughout history. It can be anything, physically.
In fact, it probably started out when, in small tribes where everyone knew
each other, people simply kept track of favors and IOUs between friends and
family -- and probably grew into physical items (like gold, or even seashells
and tulips) [no citation, this is just my personal thoughts] once our
communities expanded to the point where people were trading with strangers, or
when it became to complex to trade mental IOUs (say I gave some guy 2 sheep,
now he owes me 2 sheep's worth of stuff. The guy traded some other guy 2
sheep's worth of stuff. The third guy has a cow, owes the second guy 2 sheep/1
cow, and I want a cow. He can give me a cow and all debts between the three of
us are cleared. However, even this simple example is pretty complicated). The
point is, "money" is a concept, not a physical object -- the physical object,
whatever it may be, is just a representation.

In fact, it basically boils down to debt. This is especially true in the
current economic climate (where all fiat currency is basically _backed_ by
debt rather than any tangible item) but the concept of money itself is
essentially "I did some service or provided some item of intrinsic value. I
was provided with X amount of money for that service or item. Now someone owes
me some service or item worth what I provided earlier." Another good analogy
might be a ledger of value transactions (in fact, this would probably be the
simplest form of money).

And so that's why we hear things like "the rich don't work for money, they
work for assets." I remember that being a hard concept to wrap my mind around
until I understood money as more than just what I buy stuff with. Money is a
man-made creation, is not necessarily consumable, and has no intrinsic value
beyond what society defines it to have (which can change at a whim). But if
you own something with intrinsic value (can be consumed or produces something
that can be consumed -- like a business/product, land, etc.) you can continue
to produce value that can be exchanged for whatever passes as "money."

I hope this makes sense. I think the hardest part of explaining it (and why
you probably can't find a definite answer) is because it's an abstract
concept.

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mateuszf
That's a very nice introduction for hackers:
[https://www.youtube.com/watch?v=Bhe61JaNFLU&index=2&list=PLz...](https://www.youtube.com/watch?v=Bhe61JaNFLU&index=2&list=PLzctEq7iZD-7-DgJM604zsndMapn9ff6q)

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VMG
Pretty good overall, some notes though

> It’s also possible to get wallets that are hosted online, for example, at
> blockchain.info

Strictly speaking their claim is that they're only hosting the encrypted
version. Whether that's the case and the client doesn't phone home is
difficult to tell.

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sarciszewski
I gotta be honest, when I read the title, I thought GameOver Zeus not the
Greek god.

