Bitcoin is not money. It's an unregulated commodity that gets traded for barter instead of money.

[DetlefK]

Bitcoin is a virtual product that takes time and effort to create. -> Mining.

Bitcoins get their value from two factors:
* The supply of Bitcoin is limited.
* If you convert your money into Bitcoin, you can make an untracable financial transaction and the recipient can convert the Bitcoin back into real money.
* Bitcoin can also be stored as an investment, like that rare collectors-item you keep in your drawer. Or that celebrity-pic you took with your Smartphone.



That's why people are willing to buy Bitcoins at all. (Financial speculation aside.) They need Bitcoins for these kinds of financial transactions.
More people want to make these transactions. -> More people need Bitcoins. -> Price goes up.
Fewer people are interested in these transactions. -> Less people need Bitcoins. -> Price goes down.





Imagine living in a pre-industrial world where the hot new technology is the ability to transfer money via carrier-pigeon from one bank-account to another. Untracable for the tax-collectors. Secure from bandits.

That is Bitcoin.

Everybody will breed and buy carrier-pigeons. The carrier-pigeon-industry will boom and eventually flatten once the market has consolidated and there is ample supply of carrier-pigeons for everybody. And then, one day, carrier-pigeons get replaced by the next big thing.

[Tommy_Carcetti]

1. But I found a whole bunch of Bitcoin just laying around in this box in my closet!

[Kablooie]

7. That's mopcoin, not bitcoin.

and you can only buy tiny little squares of property with it and build houses only fit for ants.

Pheh!

[ffr]

2. Excellent description. It's basically a currency for the unscrupulous.

Thieves, killers, drug runners, organized crime, and the underhanded. In other words, perfect for the tRumpsters and the KGOP treasonweasels.

[FSogol]

11. Don't forget sex traffickers and international crimmal gangs.

[NCTraveler]

3. What will the next generation of bitcoin look like?

It currently has so many negatives and is surrounded by so much propaganda that for the time being it will stay the currency of criminals and investors. By current design it furthers the divide between the rich and poor. It's a model that cannot move forward much further in it's current state in a transparent market.

[DetlefK]

19. There are other cryptocurrencies, but...

but IIRC the differences are mainly in terms of how they get mined and how secure the money-transfer is.

An example would be Ethereum. Hailed as an improved version of Bitcoin.

[NCTraveler]

20. Thanks for the info. I'm not opposed to the general concept of cryptocurrencies.

It seems to be a direction we are heading and once one seriously takes off and gains acceptance I fell it is something that could actually help to stabilize economies on the macro and micro level.

[wiggs]

4. my impoverished but tech-savvy daughter bought a couple hundred dollars worth of bit coin and

it has quadrupled in a few months.

[DetlefK]

18. That's good for her, but she has to sell before the bubble bursts.

In a normal market, the price of a Bitcoin would be determined by supply and demand. But right now the price is driven by speculators. People are buying Bitcoins for the sake of buying Bitcoins.

That's a bubble. And it's just a question of time until some incident accidently or some investor malevolently bursts that bubble.

[cvoogt]

22. if she has not sold yet

now would be a good time to

[Kablooie]

5. Yeah, but you can still buy a bitchin' RAT that's completely FUD with it.

That's hacker talk.

RAT - Remote Access Trojan.
A program that is secretly installed to control a computer over the internet.

FUD - Fully UnDetectable by current computer security systems.

[WaitWut]

6. Bitcoin will be a facinating thing to watch for the next few years.

I would recommend reservation when trying to establish opinions on the future of crypto-currencies. I think that as we approach the automation age the role of a non-centralized currency for barter will become a global necessity. I am by no means an expert on crypto-currency but to watch this evolve from just a computer geek "what if" to a recognized commodity by the institutional investor is absolutely fascinating.

If I owned any, I would be developing an exit strategy, and if it pulls back enough I might be willing to speculate. But just to step back and say Bitcoin bad because bad people use Bitcoin is a little bit ignorant in my opinion.

But heck, I am just some old hippy on the internet...

[LexVegas]

8. I'm pissed that its driven up the price of graphics cards. nt

[Gidney N Cloyd]

9. I get the barter and conversion stuff but what's the 'mining' thing ?

'Mining' sounds like new bitcoins are being discovered and brought into circulation yet we're told the supply is 'limited.'

[WaitWut]

10. As I understand it...

The bitcoins are "mined" by having a computer work a math problem. The more coins that are mined the more complex the math problem. So theoretically, you have an infinite supply of bitcoin, it is just going to take longer and longer to actually mine one coin. Now, this is really an over simplification of the process, but for my pea brain this is how I understand it.

[Gidney N Cloyd]

13. But how can the supply be both "infinite" and (as the OP says) "limited?"

Also, who wants those math problems solved?

[Flaleftist]

15. It is limited.

Only 21 million Bitcoins can be created. There have been about 16.7 million created so far. Due to all the coins lost by people when BTC wasn’t worth much, the amount in circulation is lower.

[Orrex]

16. Bitcoin is not an infinite supply

It is limited to, I believe, 23 million, to be released according to some scheme in decreasing numbers over the next few decades.

You're correct about the "mining," and the whoever has the most super-duper computer gets a better chance at the periodic lottery.


It's some vague stand-in for a dubious analog of a shaky metaphor for money, to be sure.

[Maeve]

12. An investment, like those beanie babies in the back closet?

Or, to use an even older example, those rare tulip bulbs?

I think we need a buble emoji here...

[MisterProton]

17. Someone doesn't understand the adoption S-Curve

But hey - what do those geniuses on Wall Street know about money? Right?

https://www.wsj.com/articles/nasdaq-plans-to-launch-bitcoin-futures-in-first-half-2018-1511968313


?cb=1364307293

[Orrex]

14. How I purchase elephant tusks and rhino horn is none of your damn business, thank you.

I love reading the pro-Bitcoin advocacy on here from all the advocates who clap their hands to show that they truly, truly believe in this mythical faux-money novelty.

When the bottom drops out, a few assholes are going to be made super-rich, and all the rest will be big sacks of nothing.

[Steven Maurer]

21. Bitcoin's purpose is money-laundering

That's all it is. So if you want to support tax evasion and other crimes, buy it.

The bottom will drop out of the Bitcoin market when laws are passed to de-anonymize it.