Originally Posted by barrelbelly
I sure thought it was. I completely dropped interest in it after that top exec died in Europe under sketchy circumstances and the market cratered. I thought it was over and lost interest in it. You may very well be right though. Even though I still have no idea how it works. Sepecially in a normal retail transaction like Steam.
Bitcoin itself is open source, lots of companies are involved in it but no one controls it. You don't really need to know how it works under the hood to use it, you can use an exchange like coinbase to handle all of that and it's not terribly different from paypal at that level. Basically you have an account, that account has bitcoin in it. When you want to buy a game, steam will check the exchange rate, tell you to pay X bitcoin to Y address, then you just go to coinbase and do it, and once it's received you're all done.
I still think it's one of the most brilliant ideas ever - basically it's a massive open ledger that anyone in the world can inspect, like a bank that doesnt need bankers. So it can be used as currency because you can debit on one side as you credit the other, and everyone can see it. It's completely trustworthy because it actually doesnt require any trust at all since it's completely transparent. The part where the mining comes in is security. How can you keep a distributed, decentralized system fair and hackproof? By having the system automatically encrypt everything. The mining is a race to brute force open the lock - once someone finds it, transactions can be confirmed and it switches over to encrypting everything with a new, unknown key. The person who wins the race to open the lock gets awarded bitcoins, so there's plenty of motivation for people to do it. Then the race starts again with a new key. Because no one could possibly know the key ahead of time, there's no backdoor for anyone to abuse. Theoretically if someone had control of the majority of mining power they could abuse the system in a limited way, but because it requires SO MUCH computation to break that lock, it's not economically viable for anyone to try. Running 50%+ of the world's bitcoin mining gear would cost millions in hardware and electricity every day.
The reason it got a bad reputation from the start was because it was used to buy drugs online because it's anonymous (like an ip address) and law enforcement didnt understand enough about it to track it at the time. And governments really, really don't like it because they have zero control over it, they can't just print bitcoins like they can print dollars.