Who’s Got Bitcoin? WooHoo!

But, but, but… Free Money! 🙄

That’s kind of it in a nutshell - they are really just spinning their wheels. I don’t know the exact calculations but it involves finding prime numbers and/or factoring others IIRC. It’s truly just busywork that heats up the computers doing it. It does find actual solutions to the calculations though.

I believe there are an infinite number of potential coins but they get progressively harder to mine. (I’m not an expert or a miner, or a buyer, though) That progressively harder part is why the energy consumption keeps going up. It’s a limitless finite supply in practical terms if that makes sense. It’s a lot like a tractor pull except there is no full run. The tractor always, always bogs down.

The blockchain is decentralized. Lots of copies all over the place and they all get updated and verified when you use crypto coins for anything (another energy and resource sink). You need to have an internet connection to write transactions to the blockchain so not so helpful in a grid down situation. Also, the blockchain grows with each transaction. Another limitless hog.

In addition, the blockchain is designed to be resilient and tolerate tardy transactions. That is also a vulnerability. The blockchain can apparently be fooled with bogus transactions if there are enough of them. There was an article recently that explained it, but a coordinated attack on the blockchain might be able to break it. The theory and details weren’t interesting to me so I can’t explain it, but I’m sure folks can find the discussions and read up. I saw enough to just know I’m not putting my money in bitcoin or any other crypto.

There are also fees (currently low) for recording each transaction that support the miners. Yay. Fuck the miners.

https://river.com/learn/how-bitcoin-fees-work/

Theft is a real issue. Hackers are looking for cryptocurrency wallets and malware is great for that. Download and run some infected application and it may raid your wallet. Lose your keys and even without theft, your crypto stake becomes orphaned and inaccessible. It’s safe but it’s not. Depends on how good you protect yourself from computer viruses and crime.

Crypto is a neat concept but ultimately doomed to failure (IMHO).

Thank you!

Thanks for helping to make some sense out of the insanity. I'm a computer guy, and understand computers/networking/the web pretty well. But how cryptocurrency accumulates value, or even exactly what a bitcoin physically is, has completely eluded me. Granted, I haven't wasted a lot of brain energy on such foolishness.

Knowing how systems operate, and are interconnected, one thing you point out just screams DON"T GET CLOSE TO THIS. That is that there are endless copies of the blockchain, and that it's decentralized. It would take a large essay or a small book to describe why that is such a terrible, terrible idea as a way to store your money. The hazards are endless.

You may correct me if I'm wrong, but here's an analogy to how this is working. You live in a medium sized town. There are 30 banks within your geographic area. In the morning, you go to bank A, deposit $1,000. That starts up the "mining" operation. Within hours, all 30 banks know about you, your deposit, what your shoe size is, where your 1st born goes to school, all of it. All 30 banks have access to your funds (you don't think they do, because they are all "secure". Bullshit. Your money is not in the bank you put it in. It's all over town.

Now, assuming everyone in the world is honest, that's no problem. Your money and your personal information are respected, and off limits to all but Bank A. Bank A gets robbed, your physical money is now in the hands of the robbers. Bank B burns down. Oh shit. Banks C thru J go off line due to the power grid failing in their area.

So now, not only is your physical money gone, the records of it ever having existed are now up in smoke. Take it steps further. You died on the way home, with the deposit information getting lost in the shuffle. Your wife, in severe distress, needs the $1,000 she knew you left with in the morning to put you in the ground. Oh, but you're gone, and there's no record of the money ever existing. And if it did, your wife has no access to it.

If this all sounds like a scenario you want to invest in, then great, plug that $1,000 into purchasing bitcoin, hope for the best. What fools.