Jun 20, 2017

update: this is part 1. part 2 is here. part 3 is here.

I began to reply to this thread, but soon had a novel typed and decided to make this its own thread...here's how it all works in simple terms:

the problems

• online purchases need to be verified by a "trusted 3rd party" today (think: paypal, your bank, credit card companies). this often incurs fees (paypal: 2.9% fee)
• real-world credit card transactions incur fees for the same reason, often picked up by the merchant, but the consumer ultimately will end up paying more to compensate (ccs: 1.5%-3.5% fee)
• today's money is centralized, meaning that all of the information is stored on a handful (probably quite a few, but nonetheless, limited in comparison to the below) of servers
• transactions today lack anonymity
• today's money, banks, etc. is controlled by the government

the solution
the "blockchain" is the technical basis for all things cryptocurrency & for all applications being built in that space right now. it gets really f---ing technical, but to put it in as simple terms as possible:

the blockchain is a way to decentralize (remove "trusted 3rd parties", banks, paypal, etc. from the equation) transactions. rather than having a single entity work to confirm a transaction (this is a big portion of why fees are incurred -- to confirm a transaction, these 3rd parties and banks need to verify the identity of the parties involved in the, to verify that the person making the purchase has enough funds to cover it, and to ensure secure handoff of the monies...there's more effort to accomplish this than it may appear on the surface), the blockchain concept allows to put the burden of transaction verifications & handoffs on the masses. that is, anybody with a computer can participate and be rewarded (in bitcoin) for doing so. once the transaction (a "block") is verified, it gets added to the overall list of ALL transactions (the "blockchain"). With the blockchain being a public record (all anonymous, all encrypted, of course), there are suddenly millions of copies of all of the transactions occurring, stored on everyone's machines; ensuring that a.) the validity is perfect, & b.) that it's secure and no single entity can hack it or shut it down. Likewise, it also means that since millions of people are working together to validate these txs, the fees are very very cheap. here's a visual representation:


update 1/18: this image is a little dated now -- due to bottlenecks and congestion, the fees for BTC are actually quite high these days

applications being built on top of the concept
i mentioned Siacoin in a post above. Sia is the application, while Siacoin is the currency that's used to pay for the application's services. i also mentioned that blockchain is the basis for all things in this space right now. Sia is an example of that, in the sense that it's attempting to decentralize large data storage (think: Amazon S3 & Google Cloud services). Rather than pay Amazon $100/mo to store 1TB of data in their cloud servers, the thought is that nearly every Joe Shmoe in the developed world today has a personal laptop/desktop with unused harddrive space on it. What if those willing to participate offered X amount of hard drive space to store other people's (companies, mostly -- this is a direct competitor to existing cloud computing services today and you and I would likely not be the target audience) data on their machines? The data will be redundant (stored across many of machines across the globe), fully encrypted, and fully anonymous.

Ex: I'm company A and I want to upload my 1tb file to the cloud. I would do so through the Sia application. I upload just as I normally/always would, and the data get's partitioned, hashed, & encrypted and is simultaneously sent off to many Joe Shmoe's internet-connected harddrives. When I want to call that data to download/access it, I would do so in the same fashion as I always would, but with this decentralized system, a lot of smart tech s--- is going on to gather that data and piece it back together and unencrypt it again (all while it looking like nothing special is happening to me, the consumer).

Those Joe Shmoes get rewarded (in Siacoin) for their participation, even though they really won't ever be able to tell the difference that their machine is working for them. And the companies will be rewarded due to the cost of cloud computing being 1/10th that of Amazon & Google today.

soo...what the f---?
i've watched a shitload of videos explaining this stuff just in the past few days, and these are the best 3 (plus 1 technical) to help break it all down in simple visual representations (again, it's pretty complex s---, and these are about as simple of terms as it gets...if you're still lost after watching, then you're likely not alone):

what is bitcoin:


non-technical how it works:


the most dumbed-down technical explanation of the blockchain:


technical:



how do i get in on this?
it's really as simple as exchanging your "fiat" money (dollar/euro/etc... basically, legal tender) for cryptocurrency. to do this, i've began using coinbase.com (use this link if you're going to sign up -- we both get $10 once you make a $100 investment). Coinbase will need to link to your bank account, credit card, or paypal to make the exchange. Once linked, you basically trade real-world monies for these "online monies" (if this sounds scary, it is: the value of these cryptocurrencies are in high fluctuation right now, and it should be looked at as investing in a rocky stock market, rather than exchanging one money type for another).

Coinbase allows you to input realworld monies, in exchange for Bitcoin, Ethereum, or Litecoin. Bitcoin & Ethereum are arguably the biggest 2 right now, and Litcoin is on the rise. However, that's where Coinbase's variety of cryptocurrency limitations end.

To invest in any of the many others on the rise right now, you'll need to exchange your newly purchased Bitcoin for what you're looking to invest in. To do that, I've began using Bittrex.com.

Essentially, you exchange your real-world money for Bitcoin via Coinbase. Then, you transfer your newly converted Bitcoin from your Coinbase account to your Bittrex account. From there, you can invest in pretty much all of the cryptocurrencies being developed right now. Think of Coinbase as a Currency Exchange at an airport. Think of Bitcoin as the USD. Think of Bittrex as E-Trade. And think of all of the cryptocurrencies on Bittrex as highly volatile stocks.

update 1/18: i would recommend using Gemini (gemini.com) or GDAX (gdax.com) over Coinbase due to them having cheaper fees. I still use Bittrex as my main exchange, but use Binance as well. As of 12/16/17 Bittrex is no longer accepting new sign-ups until they update their infrastructure. Please use my Binance referral link if signing up there.


mention me, rather than quoting this whole thing, if you have questions...I'm at a place where I think I can speak to some of the in-depth aspects to all of this.

shameless plugs:
BTC: 1ByE3HDdqCQZKj45zfnCMkqTf3qCB9anb8
ETH: 0x3B2287769566C2bBB1d6a98bc363160C177a6098
LTC: LRmCyDLA6qKN3z5xFj1qxfUKWQ8fPJTsSN

 

Jun 20, 2017

@Howie @Alchemist34 @Jehovah @TylerWaves @reservoirGod @theg

 

Jun 20, 2017

yeh at this point you're just going to be chasing your tail, trying to make back the money you invested into your rig, and if you're lucky enough to do that, then you'll have done it just in time to purchase more hardware....which will be just in time to try to make that money back again...

there's actually mining calculators out there which will tell you how much you can expect to make back, depending on your hashing power (primarily driven by GPUs, as GPU = 100x's more efficient at mining than CPUs):
https://www.cryptocompare.com/mining/calculator/btc?HashingPower=4730&HashingUnit=GH/s&PowerConsumption=1293&CostPerkWh=0.12

this, along with the fact that the mining market is saturated (and getting oversaturated), plus the fact that the difficulty of "solving" the hash self-adjusts (increases) every 2 weeks, means that it's pretty late in the game.

EDIT: i stand corrected. @Mike Tyson just got into mining (january 2018) and seems to be doing well so far... i'll eat my words.