What is bitcoin?

[blindguy]

A lot of you are into bitcoins so I have some questions about bitcoin? When I buy bitcoin who gets the currency I pay for the bitcoins? What is the persons name or company name who gets the currency? If I buy bitcoin what is the currency I pay for bitcoin used for? Are they curing cancer or fighting hunger around the world?  How do I know if I buy bitcoin the currency I pay for bitcoin is not being used for criminal activities such as drugs or human sex trade? Why do so many criminals use bitcoin? Hackers want their ransom payed in bitcoin, kidnappers want their ransom payed in bitcoin seem criminals prefer bitcoin?  And if crypto currency are so great why do the people who sell them want my U.S. dollars? Would they not prefer to keep their bitcoins?  I know you might make good money in bitcoin but until I know what and who is getting my currency I will not invest in bitcoin. My conscience will not allow me to do so. Jim

[FlorinCollector]

1 hour ago, blindguy said:

A lot of you are into bitcoins so I have some questions about bitcoin? When I buy bitcoin who gets the currency I pay for the bitcoins? 

The company you buy the bitcoin from e.g coinbase.

1 hour ago, blindguy said:

What is the persons name or company name who gets the currency? 

Say again if you were buying your bitcoin from coinbase. That is the company you are buying it from. I dont know there CEOs name but im sure its out there. 

 

1 hour ago, blindguy said:

If I buy bitcoin what is the currency I pay for bitcoin used for? 

Same as any company they can use the funds however they like. I think a lot of the exchanges invest in making the platforms more secure.

1 hour ago, blindguy said:

Are they curing cancer or fighting hunger around the world?  

I don't know of any that are. Im sure there will be a coin out there claiming it does but

1 hour ago, blindguy said:

  How do I know if I buy bitcoin the currency I pay for bitcoin is not being used for criminal activities such as drugs or human sex trade?

You dont but i think thats the same with most companies. HSBC were doing criminal activity for years without anyone blinking an eye.

1 hour ago, blindguy said:

Why do so many criminals use bitcoin? Hackers want their ransom payed in bitcoin, kidnappers want their ransom payed in bitcoin seem criminals prefer bitcoin?  

I think this is only because it is in its infancy. In the future it wont be a good idea because if your address is found out they will see every transaction you have ever made. They will not be able to funnel the money out. They also prefer btc to any other coin because it is known.

1 hour ago, blindguy said:

And if crypto currency are so great why do the people who sell them want my U.S. dollars? Would they not prefer to keep their bitcoins?  I know you might make good money in bitcoin but until I know what and who is getting my currency I will not invest in bitcoin. My conscience will not allow me to do so. Jim

I think theres different reasons some believe the US dollar will be replaced by bitcoin. Other reason  is because it is another currency and they would take your GBP, euros etc to. 

I believe some do have hoards of currencies in cold wallets. As back up and as divesificstion. 

I think if you look into what company you are buying the btc from youll be able to find out a lot more about them than you will from a legacy company. Most of the workers for these companies are on twitter etc and have open discussions.

[blindguy]

I ask my financial guy who owns bitcoin and all he could only tell me who was selling it. As far as I could find out no one knows. I could be a central bank of some country or even a drug king pin. Who out there who has bought bitcoin knows where and who their money went to?

[TheMadKing]

Bitcoin is like digital gold as it is a limited supply, there are 2 main ways of buying Bitcoin on an exchange and over the counter markets (OTC) most exchanges use know your customer (KYC) to be able to buy and sell, why would they sell? why would people sell 1 ounce of their gold for fiat? probably because they've made gains on it, that does not mean they are selling their whole stack, why do they use Bitcoin? because it is one of the only crypto currencies that is actually decentralized and not just claiming to be like most the others, giving people more control over their money.

[richatthecroft]

I bought some Bitcoin- £30 worth to see what all the fuss was about in late 2017 and I thought about buying more when I watched it double up to £60 and then it fell back sharply- I traded it for 2x silver Somali Elephants in the end- pleased to get shut of it.  I don’t think I would buy any again- I like a gamble, but this stuff is volatile with a capital V. 

[HawkHybrid]

bitcoin is a casino for gambling.

it is not an investment so only risk

disposable income that you can afford

to lose.

those who defend bitcoin as an investment

have a stake in encouraging people to risk

more than gambling money at the casinos.

 

HH

[FlorinCollector]

3 minutes ago, HawkHybrid said:

Those who defend bitcoin as an investment

have a stake in encouraging people to risk

more than gambling money at the casinos.

 

HH

Isnt this the same as anyone who advises someone to invest in something which they hold?

Those who defend gold tend to have a stake in gold and wish to see the price rise. 

Stocks the same.

?

[blindguy]

1 hour ago, TheMadKing said:

Bitcoin is like digital gold as it is a limited supply, there are 2 main ways of buying Bitcoin on an exchange and over the counter markets (OTC) most exchanges use know your customer (KYC) to be able to buy and sell, why would they sell? why would people sell 1 ounce of their gold for fiat? probably because they've made gains on it, that does not mean they are selling their whole stack, why do they use Bitcoin? because it is one of the only crypto currencies that is actually decentralized and not just claiming to be like most the others, giving people more control over their money.

Did they not  just start more bitcoin by calling it bitcoin gold? And still no one can tell me who runs bitcoin, what the money you buy bitcoin with is used for. When I invest in other companys I check who runs the company and what they make. For example, I would never invest in a company who makes nuclear bombs. I just want know where my money would go if I invested in bitcoin and no one seems to know?

[AuricGoldfinger]

27 minutes ago, JosephM said:

Isnt this the same as anyone who advises someone to invest in something which they hold?

Those who defend gold tend to have a stake in gold and wish to see the price rise. 

Stocks the same.

?

To a point yes, but gold has thousands of years of history unlike crypto.

Gold isn’t really an investment its a store of wealth, the price of gold COULD half tomorrow, but it will still exist and be worth something. Bitcoin could fade into the abyss. I honestly don’t think Bitcoin will be around in a thousand years (neither will i so who cares) BUT gold will be.

Nothing against Bitcoin at all, in fact i wish i bought some earlier this year, but its still a gamble on something so new and volatile. If i put all if my money into bitcoin when it was at around £2.5k earlier this year i would now be a very wealthy man but I’m still glad i didn’t as it’s a lot riskier than other investments. Getting rich quick rarely works but getting rich slowly does.

[Lr103]

50 minutes ago, blindguy said:

Did they not  just start more bitcoin by calling it bitcoin gold? And still no one can tell me who runs bitcoin, what the money you buy bitcoin with is used for. When I invest in other companys I check who runs the company and what they make. For example, I would never invest in a company who makes nuclear bombs. I just want know where my money would go if I invested in bitcoin and no one seems to know?

Nobody "runs" bitcoin, just as nobody "runs" gold.  The analogy to investing in a company cannot be made (just as with gold).  Companies use capital to earn a profit for shareholders.  If they are successful, they will generate free cash flow that can be paid out as dividends, or reinvested for growth.  Gold and bitcoin are non-productive stores of value that will either increase or decrease based on supply and demand.

There is no centralized authority that runs bitcoin.  Somebody created it, now it exists and trades. If you buy bitcoin, your money goes to the person or business that sold it to you. 

[blindguy]

Years ago I stopped buying diamonds because of the blood diamonds coming out of Africa. I like to know where my money will go if I buy bitcoins.

[Martlet]

33 minutes ago, blindguy said:

Years ago I stopped buying diamonds because of the blood diamonds coming out of Africa. I like to know where my money will go if I buy bitcoins.

Ultimately goes back to power companies and ASIC makers.   Otherwise, its simply whoever you buy from, thousands of people who've brought and sold over the decade, and those that mined themselves (like myself).  Rather like gold, even if you buy from a mint some of their raw material may come from criminal or immoral trade.  And unlike a diamond, which is not truly fungible. 

[HawkHybrid]

1 hour ago, JosephM said:

Isnt this the same as anyone who advises someone to invest in something which they hold?

Those who defend gold tend to have a stake in gold and wish to see the price rise. 

Stocks the same.

?

 

the difference is I don't defend gold or stocks.

(for the record I hold physical gold and some

stocks) I vote sovereigns at appropriate times.

if sovereigns is not for you, that's fine with me.

those holding it feel the need to defend bitcoin.

(is this because bitcoin will drop without the

hype?)

for those who defend bitcoin there's never a

good time to sell bitcoin. this is vastly different

to my recent 'take some profits on gold' as

there's a chance it'll pull back a bit from this

point(strategic move).

 

the difference is my successful investment in

gold is not dependant on me keeping alive a

ponzi scheme.

 

HH

[FlorinCollector]

@HawkHybrid Not everyone Peter Schiff defends gold and slams bitcoin. However, he has now admitted he holds some btc. He says they were recieved from people but if you have 0 faith you would sell. 

I wasnt meaning you personally. 

I just mean generally people who hold something defend it. Btc has a cult like following. This is because most people cant/dont want to see the other side of there gambling/investments. 

I agree with you if you its not for you thats fine with me but some people see it differently. 

[Cully]

1 hour ago, blindguy said:

Years ago I stopped buying diamonds because of the blood diamonds coming out of Africa. I like to know where my money will go if I buy bitcoins.

So if you bought an ounce of gold from someone on this forum would you need to know how they were going to spend the money? 😉

[HawkHybrid]

the problem is not so much defending bitcoin.

it's the way they do it.

people don't feel the need to defend gold or

stocks as both naturally rises given time.

(I'm talking about the stock indices)

for bitcoin it's like people are there defending it

to prop it up. this is a very bad sign for what

bitcoin holders call an investment. constantly

performing a service is called a job. people

invest in companies to let those employed by

the companies do the jobs. investors look for

a return on their capital. their intention is not

to actually do the jobs themselves.

 

bitcoin is about how high can people pump up

the price. it's not an investment, as the project

it will never provide a return. it's about selling

to others that buy at all time highs.

it's just that those that 'invest' in bitcoin are not

prepared to admit it. it's a get rich quick gamble

that they feel they will win. that's why many get

heated up defending their case because they

don't want to be the ones holding the bag.

 

HH

[TheMadKing]

1 hour ago, blindguy said:

Did they not  just start more bitcoin by calling it bitcoin gold? And still no one can tell me who runs bitcoin, what the money you buy bitcoin with is used for. When I invest in other companys I check who runs the company and what they make. For example, I would never invest in a company who makes nuclear bombs. I just want know where my money would go if I invested in bitcoin and no one seems to know?

There are plenty of alternative copies (ALT coins / Sh*t coins) Bitcoin Cash (BCH), Bitcoin Satoshi's Vision (BSV) Craig Wright lying scumbag, Diamond, Gold etc, There is only 1 Bitcoin (BTC) with a limited supply of 21 million there can never be more and already quite a few have been lost from people loosing their wallets & keys. Your money would go to the person who sold you their bitcoin and the buying fee depending on the exchange you used.

[blindguy]

I thought I heard that facebook was starting a crypto currency also. I wonder with facebooks billions of users will hurt the price of bitcoin. Another question if you do not mined, is bitcoin cash the same company as bitcoin?

[FlorinCollector]

Bitcoin cash is ran by someone else. Its not the true bitcoin but tries to act like it. And i dont think facebook will because they are looking at a stable coin.so it wont have the chance of riches everyone is looking for in btc

[HelpingHands]

@blindguy I'm a bit late to this thread but I just want to mention a few things in a fairly simple way.

 

There is not a central bitcoin company.  If you buy bitcoin you are buying a currency, so like other currencies you would be buying from another individual, group or a broker.

What bitcoin solved was how to have a digital currency which is not controlled by a central authority and also can not be spent twice.

If for example I was to send you a digital music file or an email you would receive a copy but I would still have a copy and both of us could make further copies.

To prevent bitcoins from being copied (spent twice) and without the need for a central authority the responsibility is shared across the entire bitcoin network by bitcoin miners.

Imagine many computers around the world checking that nobody is cheating and preventing anybody trying to spend bitcoins twice.

These miners are rewarded for maintaining the network with newly minted bitcoins.  Bitcoins have only been created by mining from the very start.  This is often how new bitcoins come on to the market and who you might be buying them from. 

Bitcoin mining has been designed to increase in difficulty over time to keep up with advances in technology as computers improve.

Over time new bitcoins become harder and harder to mine.   Also as more computers compete for the new bitcoins it becomes harder for each miner.  It becomes more expensive to mine.

The final piece of genius worth mentioning is the halving.   Every four years the rate of new bitcoins that can be mined is halved.    

This supply shock reduces the number of new coins on the market and causes even more expense for the miners.

The next bitcoin halving in May 2020.