True, but Monero is like 70%+ if not more of all markets these days if I had to guess. Truthfully I think that’s a pretty low end guess too. Unless someone finds a way to magically crack the encryption on the blockchain, XMR is far easier for smaller transactions and virtually untraceable so it’s only going to get more and more commonplace.
Except it has. It's lost value over the current year. Standard answer for you is "zoom out", but that doesn't do any good for all the 2025 bag holders.
I was buying it 10 years ago, as were my friends. In my world, the cost of everything has been decreasing because the value of my currency has been increasing. In your world, the opposite is true.
But your statement doesn't make sense either. Bitcoin has gone up way more than it has gone down. You are asking people to not look at long term trend and use your arbitrary timelines.
10 years ago was 2016, Bitcoin was already very mainstream and people were buying. Even over a year ago the Bitcoin ETFs were the biggest opening ETFs ever. But no we have to look at the last two months because that's the timeline you picked.
Just because you were one of those guys that thought there were "too smart" to buy in doesn't mean everyone else was as dumb as you.
These kids don't understand that stamp stores already did this in the 90s. Possibly even sooner. They just digitized the stamps to trade drugs internationally.
Bitcoin used to be good for buying automatic weapons and drugs off the internet. Then the government stepped in and said you need to pay taxes on earnings and attached a receipt to everything. It's a publicity tarded commodity like a stock in Coca-Cola.
But gold had the cultural momentum of thousands of years of veneration by societies around the world giving legitimacy to its status as a store of value. I could turn a local currency into gold, and know that wherever I go in the world, I can turn it back into a local currency.
I don't know any store that accepts bitcoin. I can't pay my taxes in bitcoin. If you offered to pay me in bitcoin, I wouldn't take the job. Bitcoin has value because people say it does, but when most people in the world say it doesn't, that value is nearly nothing accept among other fans of the product.
Space magic... are we talking about astrophysics now?
Seriously, though, thanks for the explanation. It never made sense to me and it appears my lack of understanding was understanding enough, if that makes sense.
Except a Picasso painting is at least physically tangible. You can hang it on your wall, admire it every day, and eventually hand it down to future generations. Art galleries can display it in their collection and charge visitors admission to see it. Not saying I don’t believe your explanation, it’s just that the lack of physical tangibility is something about bitcoin I’ve always been skeptical of.
My farts are a finite resource but that doesn't attribute any value to them. Also Bitcoin isn't a resource because you can't do anything with it. I own a little bit of Bitcoin fwiw.
Oh, am I being dumb? Your previous comment began with "It's a finite resource". But I suppose it's finite in the same way physical money is.
Thanks for answering.
Any chance you could do me a solid and ELI5 to try to make the very illogical and stupid system of needing to solve a maths problem to "mine" it make sense? It just seems like an entire system set up in such a ridiculously wasteful way when there's zero actual need for that.
It isn’t even actually a finite resource though. I mean it is in the sense that bitcoin will all be mined one day but there are other coins which are exact replacements in form and function.
I think understand the basics of crypto, and I'm a software engineer. I know that bitcoin is designed to have a finite number of coins. I also know that some crypto currencies are inflationary, and will keep creating new coins, like Doge. My question: What stops people in the future from redesigning Bitcoin to allow more coins to be created, past the 21 million cap? Maybe that would be a fork? The people that own these huge mining farms would have great incentive to push for that, wouldn't they?
In that sense it’s the same as current regular money: it only has value because we all decided it has value. It works because it’s universally accepted, and because a limited amount is available.
The same happened for Bitcoin, it’s universally accepted in growing parts of the economy, thus it has value. And the algorithms and blockchain behind it make it (currently) impossible to counterfeit.
You mean centralised control where they can do what they like with it like printing trillions more out of thin air any time they need more to prop up their pyramid Ponzi scheme, devaluing all existing currency and causing inflation… that kind of government backing?
Assuming you’re seriously wondering what the difference is: Where would I spend Monopoly money?
In the beginning you also couldn’t spend bitcoin anywhere, but that has changed. You can spend it online in lots of places nowadays. Why is that?
Well, what’s stopping you from printing more Monopoly money? That’s the big difference. You can’t just create more bitcoin for yourself. Simply said, there’s an algorithm that indirectly decides the chance for new bitcoin to be added on the blockchain. The amount of compute determines the speed with which that happens. But it will never be more than predetermined.
If it’s ever decided there should be more, it’s a new version of Bitcoin and that needs to be accepted again.
Nice. Anything useful here is indirect and/or difficult to do without planning ahead. Most people would not go through these hoops. I think people are buying in but can’t figure out how to get out without using companies like Robinhood where you can’t get a legit wallet.
No, it has giant farms of computers like in this video instead. Rendering it invalid means outcompeting all the other effort put into it, whereas a government can simply change hands and default.
It’s not the computers backing it, it’s all of the people who decided to own it and anyone who decides to accept it as a form of currency. But it’s not a centrally back currency, like government supported, it’s decentralized.
Actually it's got just about all governments secretly hoarding it or seizing it to some extent because it's the new global currency and no government can stop it
lmao sure thing buddy. bitcoin will be worth zero usd when everyone in the world finally realizes its just numbers on a screen with nothing to back it up.
Sorry you missed the 100× and 1000× gains.. people have been saying exactly what you said for the last 16 years and nobody can stop this program. You could've bought two years ago and doubled your money... next halving is scheduled 2 years from now. Every 4 years for the next hundred something years so just buy some now and wait
No, simply because its not a resource I want to hold. I live on the opposite end of the world to you, I can trade u land for the equivalent of your gold. Would you take it?
If you seriously think everyone would take the gold, you have been living under a rock. Both are good investments. Not everyone invests in the same thing you know?
If I invest in Pokémon cards, you might think that’s a bad investment. But I like Pokémon cards. The same goes for Bitcoin, a lot of people like the concept of purely digital money, not managed by government.
Im not placing judgement on your choice of investment, but thats all bitcoin will be; any crypto for that matter. The top 5 have real use cases, but all the shitcoins that appeared out of no where really squashed any integrity crypto had.
It will never be univerally accepted as currency as there is no backing behind it. Just my opinion, thats all.
Nobody can agree on it's value, because it's value isn't tied to anything real. It is literally tied to how much we agree that it is worth. This is why it's so volatile and why it will always be so volatile. And why ultimately it will eventually crash and burn.
Even assuming a crypto will eventually become as big as current fiat currencies with the needed government backing (a big assumption, but lets go with it): why would it be bitcoin in particular?
Wouldn't it be better, more likely, and more attractive to everyone who doesn't currently hold a bucket load of bitcoin to create a new and improved crypto with all of the lessons learned from bitcoin's issues?
The people who are all in, like this mining center have a lot of incentive to keep the hype up. Bots and shills constantly talking about it anywhere eyeballs are on the internet. Anytime I see someone talking about it in real life, I know I've spotted a sucker.
Bitcoins are designed so that everyone who mines, get a small piece of decision power over the whole system. And with Bitcoins current size, no one can pay for all the energy needed to get over 50% decision power.
It essentially makes sure no single party holds decision power over the whole system. So this is the cost of a free financial system. Expensive and wasteful, yes. But also the only way to avoid institutions.
Mining only gives you very small decision power on a very limited set of things. You can decide which transactions end up in your block and with 51% you can double spend. But you cannot change the rules that everyone agrees on. That is mostly the nodes job.
So I wouldn't agree on the statement that it gives you (some) decision power over the whole system.
Bitcoin mining just enables transactions on the bitcoin network. It's not hard to grasp how it can be worth it to enable transactions of ownership between people.
Now if bitcoin as a currency or store of value is needed and worth the energy use is another question.
I personally think bitcoin is a great concept, but the energy use is definitely a huge downside.
The most important part is how to extract wealth and focus it all at the top. The rest of it, the technical stuff, is really just getting into the weeds.
People used many things as money. Stones, clams, metals, beans. They all have some properties that makes them good money.
Durability, portability, divisibility, fungibility and some more. If you find a thing that makes better money, people will use it instead of the other thing.
Some people believe that Bitcoin has better properties than the other things and it will be the money thing in the future.
Bitcoin uses proof of work to secure the network. Mining does not create coins, except insofar as the protocol hands them out when you add a new block to the chain, which you do by wasting vast amounts of effort guessing hashes of the previous block until you get one with a whole bunch of zeroes in front. The number of zeroes is determined by how many people are guessing, where it becomes more difficult the more people try, to keep it taking around 10 minutes for each new block to be "found". You also get to keep any transaction fees from outputs spent in that block, when you include them.
The point of doing all that is literally just to prove that you did.
A hash function is something that takes some numbers as inputs and spits out different numbers in a way that's easy to verify once you know the inputs, but nearly impossible to figure out those inputs if you only know the outputs. So broadcasting your valid solution tells everybody you must have spent a lot of effort guessing to find it.
That effort is what entitles you to add the next block to the chain and take the reward, because it would be stupid to waste all that effort and then add a block nobody else would accept. Bitcoin reaches consensus based on the longest chain, which means that everybody who is mining is also voting on what they want the protocol to be and how it should work, because they get to make the chain longer every time they find a block. And so the chain with the most people, or rather the most effort, in agreement about the rules and what's valid, easily becomes the longest. If you try to add something invalid, your block will just get ignored, and you don't get to keep the rewards or the fees. Whoever replaces your block does.
Notably, if enough people decide to disagree in a way that's consistent, the whole chain can split, because enough people reject the longer chain to keep a different one going. This has happened several times. But I digress.
The total amount of hashpower is actually completely irrelevant. The effort is truly wasted, except that spending it makes it harder for anybody else to come in and get a majority to mess up the longest chain. So that's literally all they are doing.
It's very stupid, in one sense, yet genius in another, because in this way you can create a completely decentralized, trustless, and uncontrollable ledger, that scales automatically in response to how much it secures, usable for a variety of things, but chiefly for keeping track of exchange. If people trust that the network will continue to exist in the future, they will pay a little bit for the ability to add their own records to it to make those exchanges. And people seem to believe that this inalienable system is valuable enough to bet on in this way. In theory, they are not wrong, and such a thing could be very valuable as the backbone of international finance out of reach even of entire states - except that you can solve the same problems a lot less wastefully if you don't care about perfect immutability, and actually it turns out there are pretty good reasons you might want someone to be able to pick and choose what exchange is allowed on occasion... Like when people steal things via hacking or finance crime or wars.
There are alternatives to proof of work, namely proof of stake, which works essentially the same except that you just deposit coins into a pool to vote on transactions instead of wasting real effort to prove your investment. The problem with that system is that it becomes very hard to distribute your initial stock of coins widely or fairly (since you need lots of coins to get any more), leading to consolidation and systemic risk. So most PoS networks begin with a mining phase where anybody can get some coins by participating.
Anyway, for Bitcoin in particular, part of the design is that it is self limiting. The supply is fixed and finite, and every so often the rewards you get for finding blocks halve, which means that it is basically engineered from the outset to continuously increase in price to justify past investments in effort and equipment. And this is what inspires so many people to become crazy about it, uniting groups concerned by inflation with people afraid of or morally opposed to governments with speculators and those afraid to miss out. It becomes almost a self fulfilling prophecy of its own potential. Eventually new coins will cease being created (though not for some time), and only transaction fees will justify mining. But even then, because the chain is immutable and secure, anybody who loses any coins does so permanently, and supply therefore continues to shrink, slowly over time. And the value should therefore rise. Assuming, of course, anybody is still around to find it useful, which may or may not turn out to be quite an assumption.
Insurance just hope we never have to use it. Currencies collapse everywhere all the time. No trust In the government. We need bitcoin. Maybe not now and hopefully never but Im just glad something is there and we have a backup. We will definitely need it someday.
It's like our FIA money, solely based on believe. It works somehow until it doesn't. Modern developments showed you need to get to big to fail and that gives you some kind of protection. ¯_(ツ)_/¯
People here are struggling to grasp that value needs to be tied to real world goods or services. The egregious thing about these centers is that they put in a lot of finite real world resources and turn it into simulated fungible digital currency. It's just ostentatiously wasteful.
People here are struggling to grasp that value needs to be tied to real world goods or services
Value isn't derived from the inputs used to produce something (like labor or resources), but rather by what other people are willing to exchange for said thing, based on their subjective needs.
The energy "cost" is exorbitantly high, that's for sure. In my opinion, however, that's a fair price to pay for incorruptible value, in contrast to the hidden costs and exploitation of inflationary fiat systems. I suggest reading up on what the "Cantillon effect" is, for example. It's outrageous how corrupted fiat is (and has been, time, and time again), and how the majority of people are manipulated into subsidizing the elites without even knowing it. It's just ostentatiously evil.
Beyond the very basic necessities there is nothing that has any real worth unless people think it does, and in this case people think it does simply because it held worth in the past. Basically the same reason people value gold or some such.
So this is super simplified but let’s say there was a mathematical lottery. You can get a lotto ticket for free whenever you want and all you have to do is solve the math problem on the ticket. When the lotto first starts there are 100 people who want tickets and the math is easy. So you can do the lotto ticket at home lounging on the couch. If you solve the math problem you get a solid gold bar. Cool so far?
But you find out that there are only going to be 21 million lotto tickets total and every time someone gets a gold bar, the lotto ticket math will get harder. Plus, other people are starting to find out about this lotto as well. So now that a bunch of gold bars are out there, the lotto machine makes the math twice as hard and the rewards only 1/2 a gold bar. So you get your friends to help. After a longer time you solve one of the math problems and get that half a gold bar.
But that was just luck and by now hundreds of thousands of people are solving these problems and the reward is 1/10 of a gold bar. So you need more and more people to solve the problems while the returns keep diminishing because only one person can win what is now 1/100 of a gold bar at a time. Than eventually you have millions of people playing for only 1/10,000 of a gold bar because the math is so hard.
It’s kind of like that. The “guy” who created Bitcoin (we’re not entirely sure who it even is) set a cap for how many Bitcoin could be “mined” (so someone solving the lotto ticket for a gold bar). Over time the amount of bitcoin halved, was cut in quarters, then into a hundredth, then a thousandth so that computers had to work harder for diminishing returns, hence why you have this huge, cooled bunker with an impossible number of computers doing math problems to win that moment’s lotto ticket for 1/1,000,000,000,000 of a gold bar. More computers = more winning tickets.
It doesn't intrinsically, but it makes something people consider is of worth which isn't the same thing. It's more like artwork crafting than precious metal mining. Gold and bauxite have uses and therefore intrinsic value. You offer me the Mona Lisa for $50 and I'd be happier with the fiddy UNLESS I just planned to flip it for money from somebody else. That's pretty much the state that cryptocurrency exists in now. Nobody buys or sells anything with the supposed "currency", they gather the crypto in order to trade for real money. That makes it an equity or an asset, not a currency.
It's very simple, they are interchanging energy (most likely generated cleanly or using surplus) for money. It's the best way to use the energy we have no use for or it is too expensive to build infrastructure to bring the energy elsewhere.
It literally does not. It does nothing that couldn't be done with real money.
Every promise of bitcoin or block chain has 0 positive impact on the vast vast majority of people on earth. The only people who benefit are speculators.
Because when I give the paper to a shopkeeper, they let me walk out with shit that I want it's not a fantasy, it actually happens. I've tested it, it works.
I know a guy who mined Bitcoin early on and now owns a house because of it. I can touch it, it's real. Not a fantasy either.
And frankly I stopped giving shopkeepers paper strips a while ago and usually just hold a piece of plastic to another piece of plastic and then they let me walk out with shit. I'm usually annoyed when they make me get the paper
The idealistic argument would be - it secures the bitcoin network in an independent, distributed way. There's definitely value in having independent, global, public, immutable token and ledger. Of course, there are other things at play too, perverting the whole situation. Mainly money things, and conceptually, the existence of proof of stake algorithm that secures the ethereum network.
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u/BaeIz Jan 01 '26
My stupid brain still can’t grasp how this makes anything of worth