Noticed a few threads about Bitcoin which don't really point to the real reason why there's discussion of it in the media right now. Basically, it's because of this guy's blog post which went up over the weekend: https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7#.ojlovvx3b Complex issue, but it seems that the infrastructure needs patching, but because of Bitcoin "politics" among users this is not happening. Mike Hearn, who wrote the blog post and made the said patch, thinks it's all going to come crashing down. Not no sure myself, and I still think crypto-currencies in-and-of themselves are a good thing. Interesting times....
/s you forgot your slash s Craig Steven Wright claims to be Satoshi, but has not signed a private key to prove it. the current problem is an artificial 1mb per block (~10min) limit. the current solution is a Large transaction fee of $0.05 in the works is a raise in the limit, and there is currently a debate in how much that limit should be raised. there are multiple people that have to agree to the new limit to make everything work. Node operators, Miners, Developers, users.
I still cannot comprehend the concept of the bit coin. I understand that it is a digital currency and for use not only in the internet but the value is a real value. However, what is the central bank of bitcoin? Who holds the money? What I buy a bitcoin and then no one buys it back from me? Clearly I would lose. So I would go to the Central Bank to redeem my money. But where is the central bank?
From what I understand about bitcoin that sounds pretty reasonable. And the fee is still pretty damn small, certainly smaller than most financian transactions. So I don't think many users would object to that.
There is no central bank. bitcoin is not the same as a digital currency. paypal, skrill along with your brokerage, bank or credit union, credit cards 2nd life lindens (online game game) and others are a digital currency the companies have control of a spreadsheet or database with your balance and transaction history and can adjust it at their will based on their rules- paypal fees, paypal 30 day charge back, bank nsf fees. Bitcoin is a decentralized crypto currency. with bitcoin there is no central company. the balance is stored in the BlockChain. a file that is ~60gb and growing at a rate of upto 6mb per hr (on average). roughly 6000 nodes are in operation keeping this file up to date. anyone (with a decent internet connection and computer with 128gb hdd) can run a node. there are many more nodes that come online briefly. it spreads the file like bittorrent. miners perform many calculations per second to find a number that will verify the last 10 minutes of transactions and the previous verification. making all transactions permanent. bitcoin has its own set of rules. if you have bought 0.01 bitcoin (about $3.80 right now) as long as there is a Node, a Miner and another user you can transfer that bitcoin to someone else. bitcoin is its own currency and has its own exchange rate, so you would have to find someone that believes its worth is equal to what you think its worth to make a trade. the value is in the utility, and is decentralized/distributed. if a person is willing to trade it for gold, that person is backing that amount of bitcoin in gold, someone else may be willing to do 8hrs of work for a bitcoin, which backs it with labor, someone else would be willing to trade it for a hammer or... a bitcoin wallet is a file on a computer with your private keys and your public addresses. public: 19ie9SMtPghTS4VFmnwR74Zsa1qBd9ivv2 private: 5JPNHqqC4R6cLz2mYr7euwFBMEPYmR26gADgWWvrRJGdBKMiJRm you can give anyone your public address. do not give out your private key to anyone. the one here i just generated on bitaddress.org account creation can be done with 32 flips of a coin and a ti-83 calculator. or the wallet software that's out there and easy to use. I did not give out any personal info to generate that address. an exchange like coinbase or localbitcoins maintains control of the private key for you. if they go under (like mtgox) while your coins are there you loose (maybe you can take them to court and get some back eventually) if you have coins and only you have the private key to the address they are stored on, then only you have access to the money. software can figure out the public key from the private key. you can back up your private key on paper, or in stone, or on a usb stick. it can be encrypted with a password. or you can make a separate one then split it up between your lawyer a spouse and your kids or a business partner and do it in a way that requires 2 of 3 of them to agree before its spent.
And at the moment, there are incentives for certain miners - most notably from China - to not play along with the changes. As to why the mods at bitcoin.org are so upset with the XT patch, I still can't figure it out. Maybe it's just alpha beats fighting over territory. I don't honestly know.
There is no central authority on it, it's decentralized. That's part of it's beauty. Essentially it grows at a fixed rate. Everyone is responsible for updating it's ledger which is a list of who owns what bitcoins. When you trade a btc for something the ledge gets updated. You trust (just like you trust that central bank will back up the value of it's issues) that the network will continue to accept you btc has value. BUT you know that there is no central authority that can abuse the privilege of making bitcoins, they are created at a fixed rate. So the money supply cannot be manipulated for political, economic or social goals.
