Poll of the Day > Someone explain cryptocurrency to me.

(+) Yeah! (+)

Seems like there's a fair number of people here who are into it... so. What's it's purpose, and more importantly, how will it get there?

Everyone I know who does anything with cryptocurrency does it with the sole intent of converting it back to fiat currency... which kinda defeats the purpose of it, doesn't it? If people are only investing in it to get rich, the "inevitable correction" everyone keeps talking about is guaranteed to be a crash that utterly destroys the cryptocurrency market, isn't it?

Second question... what's to prevent a government banning of it? I hear a lot of people saying they want a "deregulated currency that the government has no direct control over". So what's to stop a government from just saying "All transactions within the country not using our currency is strictly forbidden", thus driving it into only black market exchanges (meaning it can never actually replace fiat currency).

I'm just struggling to see the end goal and how it intends to get there. I see big companies "investing" in it, but I can't help but feel that's to line their own pockets as prices skyrocket and they sell off.
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Fake digital money

On a level I don't understand the"block chain" can be used in many computing scenarios.
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FellWolf posted...

On a level I don't understand the"block chain" can be used in many computing scenarios.

Alright, so how does that transfer to a "coin" (or 1 ethereum, 1 ripple, 1 whatever the current hot commodity is)?

That sounds much more like something a company would offer like a software. How does a person holding 1 coin help in computing scenarios? What benefit is there in trading these coins between people? How does supply and demand work?

I'm so confused.
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TheWorstPoster posted...

Fake

Not any faker than any fiat money.

It's a digital thing that can be exchanged for goods and services. Like WoW gold except much harder to obtain.

The point of it is that it is hard to trace to the only goods and services people bother using it for is drugs, guns, assassination, etc. You might as well use regular money if you're doing something legal. I'm guessing your friends aren't scum so are only in it for the money

It's already only used for black market currency. You can't pay your taxes with it so in the end of the day you're going to need to convert it to normal money eventually. There are some businesses that accept it but you're better off with normal money right now. So if they ban any legitimate exchanges of it for goods and services it doesn't matter much since it isn't primarily used for that currently
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Money can be exchanged for goods and services

JOExHIGASHI posted...

It's a digital thing that can be exchanged for goods and services. Like WoW gold except much harder to obtain.

The point of it is that it is hard to trace to the only goods and services people bother using it for is drugs, guns, assassination, etc. You might as well use regular money if you're doing something legal. I'm guessing your friends aren't scum so are only in it for the money

It's already only used for black market currency. You can't pay your taxes with it so in the end of the day you're going to need to convert it to normal money eventually. There are some businesses that accept it but you're better off with normal money right now. So if they ban any legitimate exchanges of it for goods and services it doesn't matter much since it isn't primarily used for that currently

OK, but say a drug lord gets the bitcoin for his drugs. Does he then sell the bitcoin for real money? And if you can't do that, it becomes useless, even in the black market? Because if you can't buy a mansion or Lamborghini or a yacht with a bitcoin, isn't that the entire reason behind being a drug lord? To make money?
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When all coins are made then the coin has a flat value based on the average money put in the currency. The advantage is that a global financial crisis doesn't effect the value of the currency as more can't be printed, there is a permanent set value unaffected by national success.

It doesn't matter if a government bans it as a stable currency is desirable, people can still trade it on a stable value and governments will have a hard time proving where people got their coins from.
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MannerSaurus posted...

OK, but say a drug lord gets the bitcoin for his drugs. Does he then sell the bitcoin for real money? And if you can't do that, it becomes useless, even in the black market? Because if you can't buy a mansion or Lamborghini or a yacht with a bitcoin, isn't that the entire reason behind being a drug lord? To make money?

Money is an abstract in the first place, it's representative of equivalent value. Why would a person accept paper notes for concrete, bricks and labour? You can't eat cash, but somebody will accept it in exchange for food equivalent to the value of your concrete, bricks and labour you gave to somebody else.

Why wouldn't Lamborghini or real estates agents accept cryptocurrency when it stabilises? it means the same thing as the nation's currency, only a national crisis won't force you to change your prices.
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MannerSaurus posted...

JOExHIGASHI posted...

It's a digital thing that can be exchanged for goods and services. Like WoW gold except much harder to obtain.

The point of it is that it is hard to trace to the only goods and services people bother using it for is drugs, guns, assassination, etc. You might as well use regular money if you're doing something legal. I'm guessing your friends aren't scum so are only in it for the money

It's already only used for black market currency. You can't pay your taxes with it so in the end of the day you're going to need to convert it to normal money eventually. There are some businesses that accept it but you're better off with normal money right now. So if they ban any legitimate exchanges of it for goods and services it doesn't matter much since it isn't primarily used for that currently

OK, but say a drug lord gets the bitcoin for his drugs. Does he then sell the bitcoin for real money? And if you can't do that, it becomes useless, even in the black market? Because if you can't buy a mansion or Lamborghini or a yacht with a bitcoin, isn't that the entire reason behind being a drug lord? To make money?

He should convert some bitcoin back into regular money. Too few businesses accept bitcoin so he won't be able to buy anything currently.

Even after it stabilizes the government doesn't accept bitcoin for property taxes, income tax, etc. So you'll still need what the government prints
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You use it for illegal shit or speculating on its value. If you're trying to hire a hitman or a hacker, it gives you more anonymity.
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JOExHIGASHI posted...

Even after it stabilizes the government doesn't accept bitcoin for property taxes, income tax, etc. So you'll still need what the government prints

fortunately you can convert your coins when national currency is cheap and buy back coins when the nation's currency is stronger.
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Dynalo posted...

Second question... what's to prevent a government banning of it? I hear a lot of people saying they want a "deregulated currency that the government has no direct control over". So what's to stop a government from just saying "All transactions within the country not using our currency is strictly forbidden", thus driving it into only black market exchanges (meaning it can never actually replace fiat currency).

The government can't tell you what to accept as a currency for your business or person. They can, however, tax it. But it's a bit of a two-edged sword for them. If they tax it, then that means it's a recognized currency of the government and makes it more 'usable' by businesses. If they don't tax it, then it tends to stay a little more obscure, but is obviously an exchange of goods or services that they don't get a piece of.

Think of it as a sort of barter system. I can walk into your medical practice and say, "I'll give you 10 salmon to give me a flu shot". The medical practice can accept that deal without a problem and the government can't say anything about it. They can, however, take 1 of those salmon as their tax.
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Smarkil posted...

Think of it as a sort of barter system. I can walk into your medical practice and say, "I'll give you 10 salmon to give me a flu shot". The medical practice can accept that deal without a problem and the government can't say anything about it. They can, however, take 1 of those salmon as their tax.

I really want to do that and send the government salmon fillets in the mail.
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Another fake currency designed to bilk people out of their usable currency.
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SunWuKung420 posted...

Another fake currency designed to bilk people out of their usable currency.

https://www.wheretospendbitcoins.co.uk/location/london
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SunWuKung420 posted...

Another fake currency designed to bilk people out of their usable currency.

I'm gonna let you in on a little secret sunny

All those sweaty dollar bills you get at the end of a night of slaving over a hot fry basket? Those are all just as 'fake'.
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Smarkil posted...

SunWuKung420 posted...

Another fake currency designed to bilk people out of their usable currency.

I'm gonna let you in on a little secret sunny

All those sweaty dollar bills you get at the end of a night of slaving over a hot fry basket? Those are all just as 'fake'.

That's not a secret. The difference is I can spend those dollars anywhere, genius.
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SunWuKung420 posted...

Smarkil posted...

SunWuKung420 posted...

Another fake currency designed to bilk people out of their usable currency.

I'm gonna let you in on a little secret sunny

All those sweaty dollar bills you get at the end of a night of slaving over a hot fry basket? Those are all just as 'fake'.

That's not a secret. The difference is I can spend those dollars anywhere, genius.

Can you? Can you hop in a rowboat over to France, get yourself a quinoa shake and give them a fistful of American dollars and have it work?

What about China?

What about Zimbabwe?
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Smarkil posted...

Can you? Can you hop in a rowboat over to France, get yourself a quinoa shake and give them a fistful of American dollars and have it work?

What about China?

What about Zimbabwe?

You probably could, but they would scam the fuck out of you probably. Also you should exchange your money before going to those countries because the exchanges there will cost more.
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Smarkil posted...

What about Zimbabwe?

USD is used in Zimbabwe since the economy keeps collapsing.

FellWolf posted...

you should exchange your money before going to those countries because the exchanges there will cost more.

The same is applicable to bitcoin.
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FellWolf posted...

Smarkil posted...

Can you? Can you hop in a rowboat over to France, get yourself a quinoa shake and give them a fistful of American dollars and have it work?

What about China?

What about Zimbabwe?

You probably could, but they would scam the fuck out of you probably. Also you should exchange your money before going to those countries because the exchanges there will cost more.

Theoretically, you wouldn't have to. Bitcoin could be a universally accepted currency. The only real difference between the US dollar and Bitcoin is that the US dollar has been around longer. It was once backed up my gold/silver but it's not anymore so it has as much inherent value as any other thing.

Right now, bitcoin and other cryptos are all speculative, sure, but they have a lot of potential to be a lot more. If you live in a country, like Zimbabwe, where your countries' currency is worthless - you could still trade with people and have it mean something.

I wouldn't bet my life savings on a crypto, but I think it will stick around in some form of another.
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Scam