Cryptocurrencies: Newbies Learning Zone

[timsk]

When it comes to cryptos, I'm on a par with a trading newbie who joins T2W and, in their debut post, asks what the bid ask spread is. Since the inception of this bespoke forum, I've taken a keen interest in this space but, if I'm honest, I'm finding it tough. Much of it is like wading through a quagmire of treacle.

For example, in spite of having read any amount of blogs and watched numerous YouTube videos etc., while I understand(ish) in broad terms what a blockchain is, I wouldn't want (or be able) to explain it clearly and succinctly to someone who's never heard of the term before. And that's frustrating, as I want to learn this stuff for two reasons. Firstly, I've held the view for many years that the current financial system is on its last legs and will almost certainly collapse sooner or later. Secondly, crytpos - in one form or another - look to be a viable alternative. One day, I suspect they will be the norm.

So, what's the purpose of this thread? It's for anyone who, like me, is struggling to get their heads around the topic and wants simple - easily digestible answers to basic questions. Ask anything you want, there are no stupid questions. Hopefully, those in the know will be on hand with the answers! I'll kick off with a question of my own in the next post.
Tim.

 

[timsk]

This question specifically relates to Bitcoin - but I suspect it would also apply to most (all?) other cryptos. I keep reading that the total number of Bitcoins is capped at around 21 million. Who - or what - dictates this figure and how did it come about?

 

[Pat494]

You can get up to the minute prices from Bitfinex.

 

[Pat494]

This question specifically relates to Bitcoin - but I suspect it would also apply to most (all?) other cryptos. I keep reading that the total number of Bitcoins is capped at around 21 million. Who - or what - dictates this figure and how did it come about?

As far as I know the secret gang that started it, said so - to keep prices up. There seems to be a shortage of not much.
But plenty of ...........

 

[timsk]

As far as I know . . .

You appear to be in the same boat as me Pat, i.e. you don't know!

 

[neil]

Some never learn

You appear to be in the same boat as me Pat, i.e. you don't know!

Tulipmania again.........if you don't understand it Tim, and you are no fool, then it probably belongs to those smoke like dreams that slip through your fingers because it is a virtual product as opposed to something solid like corn etc or even those bank notes with the queen upon it that at least carry a promise to pay the bearer. People will get hurt but they will ignore any exhortation to be cautious because they are blinded by the prospect of profit via volatility. However, something that doesn't exist other than as a concept in cyberspace can easily disappear completely, without warning. And remember this -when the panic starts and you want to sell, then you will need a buyer who is unfazed by a collapsing cyberspace creation. Assuming the entire concept doesn't disappear at the flick of a switch or viral decimation.
Best advice regarding any instrument ( including now those that are merely virtual concepts.) If you don't understand it despite applied study, then don't trade it.
I don't visit T2W very much now but it saddens me to see so many stupid people and the crooks that feed off them, swimming around the forums.
Many of these no-hopers cannot trade profitably on standard instruments so what makes them think they can trade the invisible and unregulated. But they continue to follow the herds of lemmings for that bit of easy cheese.
Apart from that -have a good Christmas everyone.

Food for thought: http://www.bbc.co.uk/news/business-42457983

 

[Quantt]

As far as I know the secret gang that started it, said so - to keep prices up. There seems to be a shortage of not much.
But plenty of ...........

Probably NSA, CIA or another 3 letters government agency, just like the "anonymous" Tor browser for the dark web

 

[Quantt]

This question specifically relates to Bitcoin - but I suspect it would also apply to most (all?) other cryptos. I keep reading that the total number of Bitcoins is capped at around 21 million. Who - or what - dictates this figure and how did it come about?

Is this the real number? How many forks we have already and how many more are coming in just the next few week? Every fork doubles the tokens and gives the "creators" few percent "pre-mined" coins to support the cause...

Talk about printing tokens out of thin air literally...

http://cryptocurrencyfacts.com/2017/12/05/upcoming-bitcoin-forks-2017-2018/

 

[Quantt]

Firstly, I've held the view for many years that the current financial system is on its last legs and will almost certainly collapse sooner or later.

Tim, do you really believe if the world as we know it (the financial system) collapses tomorrow, somehow the internet will still be around, so we can use the tokens to order stuff from Amazon?

We'll be back to the stone age hunting with bows and arrows... you cannot eat bitcoins, gold and diamonds and won't help you one bit to survive...

If you are afraid, stockpile on medicine, food, water, guns and ammo and have a few trusted friends around...

 

[Quantt]

while I understand(ish) in broad terms what a blockchain is, I wouldn't want (or be able) to explain it clearly and succinctly to someone who's never heard of the term before.

The technology has been around for let's say 8-9 years already, but can you name me one widely used product or service based on block chain?

Even more, do you think the hedge funds and traders will want all their transactions to be in one single block chain for every one to reverse engineer their methods?

For the "against the government type" people, do you want all your spendings and all your income to a cent be on a centralized block chain? Or your health records and meds you are taking - talking about a gold mine for the insurance companies...

This is like the gateway technology to 1984 and the total control of the population...

 

[timsk]

Tulipmania again.........if you don't understand it Tim, and you are no fool, then it probably belongs to those smoke like dreams that slip through your fingers because it is a virtual product as opposed to something solid like corn etc or even those bank notes with the queen upon it that at least carry a promise to pay the bearer. . .

Hi neil,
My philosophy is to try and keep an open mind and do my best to learn as much as possible about a market before deciding to trade it or, conversely, not to touch it with a barge pole. Certainly, I agree 100% that if one doesn't understand something then it's wise to avoid it until one does. On that basis, personally, I have no intention of investing in any crypto unless and until I've done just that. Even then, I may well steer clear of it altogether as I accept that it's waaaay more risky than almost all other markets.

As you know, T2W is intended to be a sort of one-stop-shop for newbie traders, a place where they can find a good amount of quality information on most aspects of trading. Regardless of whether you're a crypto evangelist or think the entire arena is populated by ne'er-do-wells out to con the gullible - the fact remains that at the time of posting it appears to be a major emerging market. One may not like it, but one can't ignore it. (Only last week a member posted stat's that showed the daily volume in cryptos is roughly equal to that traded on the NYSE.) It's for this reason that Sharky created this bespoke forum and why I think this thread could be a useful starting point for those that wish to understand it.
Tim.

 

[timsk]

. . .How many forks we have already and how many more are coming in just the next few week? Every fork doubles the tokens and gives the "creators" few percent "per-mined" coins to support the cause...

Hi Quantt,
Thanks for your posts, however, I don't propose to address the points you raise for two reasons. Firstly, the idea of the thread is not to discuss the merit - or otherwise - of cryptos. It's intended as a first base starting point for complete newbies who wish to get their heads around crypto basics. Think of it purely as the crypto equivalent of one of the First Steps threads in which newbies ask questions like 'what is a stop loss' or 'what does long and short mean' etc. The second reason leads on from this: you've used jargon that makes your posts tricky to understand. E.g. in the quote above you refer to 'forks', 'tokens' and 'per-mined' - all in one sentence. All good stuff no doubt - but best reserved for another thread!

Tim.

 

[Quantt]

Hi Quantt,
Thanks for your posts, however, I don't propose to address the points you raise for two reasons. Firstly, the idea of the thread is not to discuss the merit - or otherwise - of cryptos. It's intended as a first base starting point for complete newbies who wish to get their heads around crypto basics. Think of it purely as the crypto equivalent of one of the First Steps threads in which newbies ask questions like 'what is a stop loss' or 'what does long and short mean' etc. The second reason leads on from this: you've used jargon that makes your posts tricky to understand. E.g. in the quote above you refer to 'forks', 'tokens' and 'per-mined' - all in one sentence. All good stuff no doubt - but best reserved for another thread!

Tim.

Hi Tim, as you wish, but those are the questions a newbies need to ask...

To use your example, "what is a stock" and "what is a stock market" would be more along the example...

"Long", "short" and "stop loss" type questions are to be asked down the line after the basics are understood...

 

[Oscar Reed]

This question specifically relates to Bitcoin - but I suspect it would also apply to most (all?) other cryptos. I keep reading that the total number of Bitcoins is capped at around 21 million. Who - or what - dictates this figure and how did it come about?

Best answer I can find online.


Well when bitcoin was introduced for every block created one was awarded 50 bitcoins and that occurred every 10 minutes.

Because there are 1440 minutes (24x60) in every day, that means that 144 blocks were created so 144X50 = 7200 bitcoins per day

4 years are 1461 days (including the leap one) so the total bitcoins for the 1st 4 years is 1461 X 7200 = 10519200

Now .. since every 4 years we have to double-down the amount of bitcoins prize for every block found, the total bitcoins are 10519200 *(1 + 1/2 + 1/4+1/8 + … +1/2^n) = 10519200 *2 = 21038400 (its well know that 1+0.5+0.25+0.125+.. = 2 )

That number 21038400 is the theoretical limit since we cannot go forever mining a millionth trillionth of a satoshi. Actually (as for now) we cannot go less that 1 satoshi anyway. So the real number is just a little bit smaller than that, maybe 21038399.99999999 or 1 satoshi away from the theoretical calculation.

Now since every 4 years we have a double-down that means than in 40 years (in 2049) we will have 1/(2^10) = 1/1024 production of bitcoins, which means that since we started with 50 botcoins award after 40 yeras the prize of finding a new block will be aproximately 1/1000 of 50 bitcoin = 0.05 bitcoin per block (0.048828125 is the accurate result)


https://www.quora.com/Why-is-Bitcoi...bitrary-way-or-is-there-an-argument-behind-it

 

[Pat494]

The day I get schmuzzled into buying botcr*p is probably the day it drops through the floor.
S0ds law and all that.

 

[timsk]

. . .but those are the questions a newbies need to ask.
. .

Hi Quantt,
If you're referring to the questions that you posed in your post #10 above, I agree they are very good and warrant serious consideration. However, they concern the merits and viability - or otherwise - of cryptos in general and blockchain technology in particular. Surely, before one can provide satisfactory answers one must first have a reasonable grasp of what a blockchain is? That's the purpose of this thread. To attempt to address your points without first having a good handle on crypto basics is to put the cart before the horse IMO.
Tim.

 

[timsk]

Best answer I can find online. . .

Hi Oscar,
Thanks for your answer to the question posed. It probably makes perfect sense for most T2W members of average intelligence or better. But for ultra dense thickos like me, it's pretty meaningless. I suspect it was written by a techie geek who surrounds him/herself with other techie geeks and is so used to that world and language that they forget there are (a few) people outside of it who find it alienating and impenetrable. All of which is my problem - not anyone else's!
Tim.

 

[FXMJ]

Simple Question:
I want to buy certain cryptocurrencies, not trade them against currencies or other cryptos. How do I go about this? Endless Brokers out there, too many to deal with as I'm not sure who is good or legitimate. Plus most I've seen when looking at their websites are either trading against other cryptocurrencies, (pairs), or small outfits who say they can buy for you. I'm keen to get into this but fearful of ending up dealing with con artists etc. Any advice would be appreciated...

 

[Pat494]

Simple Question:
I want to buy certain cryptocurrencies, not trade them against currencies or other cryptos. How do I go about this? Endless Brokers out there, too many to deal with as I'm not sure who is good or legitimate. Plus most I've seen when looking at their websites are either trading against other cryptocurrencies, (pairs), or small outfits who say they can buy for you. I'm keen to get into this but fearful of ending up dealing with con artists etc. Any advice would be appreciated...

The best advice I can think of is - Don't.
Paying cash for hot air promises...........barmy.
Excuse me saying but from your post you don't come across as one of those oily geeks that are in and out like lightning plus profit.

 

[FXMJ]

The best advice I can think of is - Don't.
Paying cash for hot air promises...........barmy.
Excuse me saying but from your post you don't come across as one of those oily geeks that are in and out like lightning plus profit.

Hi and thanks for responding. I appreciate your response but have made up my mind as I have been monitoring for the last 6 months before venturing into this and have a specific sum to invest. So question still stands. And no I'm not one of those 'oily geeks' Just putting an affordable amount into cryptos which I will hold onto long term.

I have looked at so many brokers etc that expect me to either trade USD against the crypto or they convert my cash into Bitcoin and then purchase. I simply want to buy the crypto using GBP and holding securely in a wallet.

Thanks