Bitcoin - explain to a dummy

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RoninPA

RoninPA

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Dummy is me :D

What are Bitcoins and what purpose do they fill.

Can you buy a loaf of bread at the corner market with them?
Can you go to a gas station and fill up your car or truck and pay with Bitcoins?
Can you go to your trusted car dealer :wink: and tell them you want that $50K truck and "I'll pay you with Bitcoin"?
Can you go to your local gun shop and buy guns and ammo with them?

If you can't do these things, what good are they exactly? What niche do they fill in the worlds economy? Will they feed starving nations? Will they stop epidemics?

Exactly what good are they? They aren't backed by any government that I know of. What exactly do they do for the average Joe or Jane.

I heard today that 1 Bitcoin is worth 16K+ dollars -- to who?

If the worlds economy were to crash, I would expect after it was all said and done that the barter system would be in place for a good amount of time until a government arose to stabilize things. Can you eat Bitcoins :D (as far as that goes, you can't eat gold either - I'd rather have the skills that will feed and protect my family than gold nuggets, at least through the bad times).
 
RoninPA,

I'm with you.

So far, I've heard only one explanation defining "bitcoin' and it came across as doublespeak.

Unless something, no matter what it is can't be explained in 'plain English' I avoid it...

So far, there's seems to be no easy explanation.

That being the case, I start thinking ...scam.
 
The bottom line is that Bitcons are digits on a screen, or numbers on a ledger...but nothing which can be held in your hand. Now, that's not to say that they don't have 'value' in terms of being a medium of exchange (or leastways in some circles)...it's just sayin'.

All in all, not unlike our government's present FRN really, the main practical difference being that Bitcons are not as widely accepted in trade, so if using them as "money" is the objective, mostly you'd need to swap them for FRN's before hand...or if you're into using plastic and/or electronic digits instead of using paper instruments, have your Bitcon digits converted into FRN digits.

If all of this sounds like some sort of strange magic show or con game, that's because it is. But then again, when we're talking about 'money' in today's terms, it's all a magic show...meaning that there's no real money left anywhere in the world that I know of, just digits...or to a much lessor extent, paper...so what the heck, if ya like Bitcons, get some and see how they work out. I doubt that they'll perform any worse over the long run than the FRN has, which is presently down to what, about 3% of it's original value? :lol: :lol: :lol: .

DGW
 
DGW1949,

In furtherance to understanding, please elaborate on this paragraph: "All in all, not unlike our government's present FRN really, the main practical difference being that Bitcons are not as widely accepted in trade, so if using them as "money" is the objective, mostly you'd need to swap them for FRN's before hand...or if you're into using plastic and/or electronic digits instead of using paper instruments, have your Bitcon digits converted into FRN digits."

I'm not trying to be difficult, just trying to understand, why or how does one benefit if "the main practical difference being that Bitcons are not as widely accepted in trade" would I bother with them to begin with?

And thank you for your patience in helping us the 'ignorant of bitcoin particulars'
 
Another characteristic is that they are backed by no government; some would say, "so what?" But that really is a big difference. In many ways, bitcoin shares more features with gold than with actually money.
It reminds me of the tulip market in 17th (I think) century Holland. For reasons that I don't remember or maybe never knew, tulips and their ilk became an investment craze in Holland. Because they were really just flowers and bulbs, the market crashed (not surprisingly in hindsight). Caused a great recession.
If a person really wants to get stupid, I read one can now invest in bitcoin futures. Wow.
 
Here's a question for contemplation:

When the United States was founded, the "value" of our economy was only a fraction of it's current value.

Currently, our GDP (the value of all goods and services produced in the U.S.) stands at about $18 trillion USD. ($18,000,000,000,000).

In 1960, the value was approximately $1 T - https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=US).

Where exactly did that "value" originate?

From hard work?

From natural resources?

From thin air?

Where, exactly, is the origin for "value?"

Why does the "value" of your home or car or firearm change?

Monty

P.S. There was an interesting discussion on a radio show this morning in which was mentioned the possible use of crypto-currencies to provide more economic stability for unreliable 3rd-World economies which are manipulated by their unsavory governments.
 
FRN = Federal Reserve Note, the play money spit out by the Bureau of Engraving and Printing that's only backed by the good faith and credit of the federal government. A form of paper vaporware.
 
I plead guilty to being a Dummy. However, I have been in business, my own business that has provided a good living for my family and over 50 employees, totaled over 60+ years.

I believe the most important thing I have learned in my business is that there is a specific difference between price and value. This applies to bitcoin, stocks, tractors, trucks, cattle, labor, real-estate, bonds, jewelry, gold, silver, etc., everything.

I don't know anything about bitcoin and I have not yet heard or read anything to indicate that it has any value. Its price alone tells me nothing about its value. If I had operated my business, and my personal life, on the basis of prices alone, I would have gone broke 50 years ago.
 
Conservative said:
DGW1949,

In furtherance to understanding, please elaborate on this paragraph: "All in all, not unlike our government's present FRN really, the main practical difference being that Bitcons are not as widely accepted in trade, so if using them as "money" is the objective, mostly you'd need to swap them for FRN's before hand...or if you're into using plastic and/or electronic digits instead of using paper instruments, have your Bitcon digits converted into FRN digits."

I'm not trying to be difficult, just trying to understand, why or how does one benefit if "the main practical difference being that Bitcons are not as widely accepted in trade" would I bother with them to begin with?

And thank you for your patience in helping us the 'ignorant of bitcoin particulars'
Click to expand...

I wasn't saying that you (or anyone else) should "bother with them", or that they hold any more of a "benefit" than any other form of what is commonly referred to as 'electronic money' these days. I was simply trying to answer your question in terms of apples to apples, or if you prefer, digits to digits...that's all.

My apologies if I didn't do a very good job.

DGW
 
Well, the bitcoin is an instrument based on the confidence of those that use the internet.

but then the dollar is an instrument based on the confidence of the American people.

Either way it's just a confidence game that has the benefit of being legal.
 
DGW,

If I offended you - I apologize.

I'm simply trying to understand why would anyone 'truck' if you will, in 'bitcoin'?

Are you in the business of selling 'bitcoin' and I'm not saying you are, but you seem positive about it.

Am I wrong?
 
https://en.m.wikipedia.org/wiki

Link to wikipedia above
Key things about bitcoin are that they are not government run, no cental bank or administrator. Anybody can "make" bitcoin by mining (allowing your computer access to a network that uses it for math calculations)
more retailers are accepting it now, we have some local brick and mortar stores with bitcoin logo right next to visa
 
Galaxiedan said:
https://en.m.wikipedia.org/wiki

Link to wikipedia above
Key things about bitcoin are that they are not government run, no cental bank or administrator. Anybody can "make" bitcoin by mining (allowing your computer access to a network that uses it for math calculations)
more retailers are accepting it now, we have some local brick and mortar stores with bitcoin logo right next to visa
Click to expand...
What has a Australian cricketer have to do with Bitcoin? :? :?
 
WAYNO said:
19 posts, and there is still really not an explanation, but some information of its advantages and drawbacks. I have searched online, and I still find no real answer. Our local mall has a vending machine to buy bitcoin. Or is it bitcoins?

Digital currency. Again, with no power and no computer, how do you use it to pay for goods or services? And does it fluctuate in value like stocks? Kind've hard to buy a car with a bitcoin promissory, but tomorrow bitcoin crashes before the bitcoin is cashed. My head is spinning.

And since everything is done online, if a hacker wipes out your bitcoins, are you SOL?
Click to expand...

WAYNO -

Many of the OP's questions were answered here:

https://www.investopedia.com/terms/b/bitcoin.asp

Monty
 
Montelores said:
Many of the OP's questions were answered here:

https://www.investopedia.com/terms/b/bitcoin.asp

Monty
Click to expand...

And I need to sit down and read it to see if it answers my questions or just adds questions or confuses me :D

If a bitcoin is trading with a worth of 16K+ FRN's then does a candy bar selling for 1 bitcoin actually selling for $16,000? Or are bitcoins broken down into sub units?

Guess I really need to read that what was provided. Thanks for the link - I think :oops:
 
bitcoin is a means to transfer value and transact in the cyber world.
it is an attempt to undermine known currency....where hardware gets replaced with software.
problem is....if you buy them, who holds the money you paid for them?

technically, the dude that gets to hold your money IS THE gold standard.
if he decides to cash in the gold standard...your bit coins are worthless....just like all the other real currency.

im sticking to whats accepted as proven. cash, baby.

lol.
 
another way to look at it is...when you go to a fair or carnival, you buy tickets to ride rides. its only good AT THE carnival. the ticket represents the cash you gave the booth. the ride owner recognizes its value and lets you on.
but...if you don't use your ticket, and come back a year from now, and the color of the ticket is different, your ticket is worthless.

bit coins can only be used in cyber space. (the cyber carnival)
how easy would it be for someone to push a button and...........poof, your bit coin is worthless.
 
RoninPA said:
Dummy is me :D

What are Bitcoins and what purpose do they fill.

Can you buy a loaf of bread at the corner market with them?
Can you go to a gas station and fill up your car or truck and pay with Bitcoins?
Can you go to your trusted car dealer :wink: and tell them you want that $50K truck and "I'll pay you with Bitcoin"?
Can you go to your local gun shop and buy guns and ammo with them?

If you can't do these things, what good are they exactly? What niche do they fill in the worlds economy? Will they feed starving nations? Will they stop epidemics?

Exactly what good are they? They aren't backed by any government that I know of. What exactly do they do for the average Joe or Jane.

I heard today that 1 Bitcoin is worth 16K+ dollars -- to who?

If the worlds economy were to crash, I would expect after it was all said and done that the barter system would be in place for a good amount of time until a government arose to stabilize things. Can you eat Bitcoins :D (as far as that goes, you can't eat gold either - I'd rather have the skills that will feed and protect my family than gold nuggets, at least through the bad times).
Click to expand...


RoninPA.
That is above my pay grade. fer sure!
Blackie
 
Conservative said:
DGW,

If I offended you - I apologize.

I'm simply trying to understand why would anyone 'truck' if you will, in 'bitcoin'?

Are you in the business of selling 'bitcoin' and I'm not saying you are, but you seem positive about it.

Am I wrong?
Click to expand...

No offense taken on my part what so ever.
Just to be clear, I'm not at all "positive" in regards to Bitcon...or for that matter, any other of today's digital currencies and/or paper instruments. All I was saying in my first post on the matter of (possibly) investing in Bitcons VS FRN's is that I doubt that when it's all said 'n done, a Bitcon would do any worse in terms of holding it's value as an instrument of exchange than the FRN has...
In other words, I really don't have much faith in either. Fact is, I don't view any of this sort of stuff as being anything other than units of debt, or IOU's if you will...meaning that even if/when the IOU you may be holding gets passed along to the next guy for him to use, or even if one form of IOU get's exchanged for another form, exactly none of them will ever actually represent anything other than 'somebody owes somebody something'.

Hope that made better sense than my first try. :wink: .

DGW
 
Bobski, your 2nd post makes sense and brings the concept down to us mere morals level to understand. Thank you. And I guess the difference (or maybe not) is that you can't turn your unused tickets (bitcoins) back to the ticket booth and get your cash refunded. Well, I guess you can find someone that wants your bitcoins more than you do and will buy them.

DGW - your last post is very helpful and gives me pause to think. If ANY country defaults completely (say the USA does for whatever reason) then who we owe "takes over" assets here in the US. Lets say its 1 million apartment complexes. SO now the new "owner" has control of them. What if all the residents just say, screw it, we're not paying rent any more. What's the new "owner" going to do, evict everyone :D :D :D :D Those apartments are worth nothing to the new owners if the tenents don't pay with something. So I guess all in all it's just figures in a book somewhere. IIRC at one time a millionaire/billionaire "lost" a bunch of money on a stock market crash. When people asked him about it he just said "Hey, it's just some figures written down somewhere" (or something to that effect).

Still thinking - anyone ever see a Star Trek episode that dealt with the crew of the Enterprise getting paid? Inquiring minds might want to know :shock:
 
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