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| Jaicee said: Thank you for your help, everyone! I feel like I kinda have a slightly better understanding of what bitcoin is now...sort of. I'm still confused about some particulars though. Based on what's been shared about bitcoin being designed to increase in value over time through built-in shortages, it doesn't exactly sound like some populist rebellion against The Establishment like the bitcoin proponents here seem to be contending. If a currency is gaining value over time, that means a steadily decreasing share of the population has access to it over time, which means that it's designed to exclude most people and become affordable increasingly only to wealthier and wealthier people over time. The actual populists of old demanded just the opposite. They demanded the creation of "fiat currency", i.e. the replacement of the gold standard with the silver standard, and eventually paper money, so that they could afford to pay back their debts more easily by getting easier access to money. Bitcoin, by contrast, sounds to me more like rich people missing the exclusivity of the gold standard and rebelling against "fiat currency" to reassert something vaguely analogous thereto. By creating an increasingly scarce (scarce relative to population growth, that is) new currency that's designed to replace established national currencies that are subject to taxation and regulation by often democratically-elected governments, the hope seems to be to circumvent all remaining venues of democratic control over finance so that the capitalist class might avoid all remaining burden of social accountability altogether: all taxes and all responsibilities to the public. It sounds to me, in other words, like a thoroughly backward, reactionary, and deeply, deeply elitist concept. What I'm still not understanding though are the core mechanics of it. I'm not a tech wizard. I'm just a 39-year-old grocery store clerk who dropped out of college. How exactly does one go about acquiring bitcoin, for example? Like in English? And exactly how is bitcoin "mined"? Like is there a computer somewhere that's calculating that whatever-it-is magic math equation that creates bitcoins automatically and that computational process is just popularly known as mining or something? Also...how again does this cause ecological damage? As best I can tell, bitcoin is just an idea, and one that doesn't have a physical form like paper money at that, and as such it's not actually being physically mined from the earth and extracted from trees. Just like...bitcoin is such a bad idea that it pains the Earth and metaphysically causes ecological damage? |
(I could almost believe that actually. It sounds a sufficiently terrible concept to me!)I think I tried to explain the technical basics in my earlier post. Simply put: a block of bitcoin is a computer file, containing some bitcoin transactions and also verifying the block before (therefore creating a chain of valid blocks). Everyone could create a block, but to be accepted the transactions need to be valid and the block needs to fulfill a certain mathematical restriction. To fulfill this, the creator of the block tries to fill a field with different numbers and calculate the hash for the whole block. This hash needs to fulfill the mathematical restriction. If it doesn't, you pick the next number and try again. You need to try billions of times until you find a number, that leads to the hash of the whole block becoming valid. The first block found this way is accepted in the network and the next block is created. This process is called mining. The transactions in the block are validated through this process. The perk for the miner is, thta in the beginning he can put newly minted bitcoin in his own account. But this number decreses, until the number of bitcoin is fixed. The second perk for the miner is, that he can demand a fee for every transaction he puts in the new block. He can ignore transactions, which don't pay enough fees, and therefore may not be validated. As many computers make a lot of calculations in the process of mining, this process needs energy.
The question of sociological impact is more one of the society itself. Bitcoin is just a technical concept. It is not a savior of humanity nor the downfall. It is just a concept. In the end the ones who are powerful in society, will probably find out ways to profit the most.
How to get Bitcoin? One way is to mine blocks. The other is to pay someone who own Bitcoin any other currency and get him to make a Bitcoin transaction to transfer some of his bitcoin in your account. There are brokers that do this, but as this cryptocurrency stuff is mostly unregulated as of yet, there are a lot of scammers among them.
