How Do You Make Change with BitCoin

AboveAll · Dec 8, 2013

There is NO agency, central-cloud-computer etc. Bitcoin is a peer to peer based system.

Biznik · Dec 8, 2013

biglia said:
What if Brad Pitt buys something on a webshop, he fills in his full details (name, address, phonenumber, etc) and pays with bitcoin. For legal transfers you need to fill in some personal information. Can the webshop owner reveals his bitcoin identity on the Internet, so everybody can see Brad's previous bitcoin transactions and how many bitcoins he owns?

Yes.

You can get around this by making a new address for each transaction. As long as you don't send transactions between your addresses, nothing will link them together.

bartosimpsonio said:
Also if each BC is worth 1000, and there are 11 million of them possible, is 11 billion U$ the largest the BC economy can get at any given time? I find this intriguing....

The limit is 21 million. What you're referring to is called a 'market cap'. Google it.

bartosimpsonio · Dec 8, 2013

jazzc said:
a) When you hand over a dollar to buy a newspaper, does it get marked as "spent" and thrown out of circulation?

b) BTC Price will go up to reflect the total market value; supply & demand style.

Interesting, thanks for the example. So the bitcoin remains in existence but a transaction is marked as having used it....

Also, BTC prices go up but they can be broken down infinitely? Can you have 0.00001 BTC if you want?

SkyrocketSEO · Dec 8, 2013

And another thing. How do you "steal" BitCoin. Don't you have to go through the computer-in-the-sky? Couldn't the computer just say "No"

Well, the same way someone steals your "real" money. They open your wallet ( in this case virtual wallet) and send money to their wallet.
Wallet is either downloaded to your PC or you can open wallet at btc-e or similar exchange site.

Can you have 0.00001 BTC if you want?

Yes you can.

jazzc · Dec 8, 2013

bartosimpsonio said:
Also, BTC prices go up but they can be broken down infinitely? Can you have 0.00001 BTC if you want?

Not infinitely, currently up to 8 decimal places -> 0.00000001 BTC.

Nigel Farage · Dec 8, 2013

Biznik said:
1. The 'computer in the sky' is comprised of every computer running the Bitcoin client. Think of it as the collective 'hive mind'. No one person controls it.

Okay so if you told me that the entirety of the BitCoin economy, from algorithm, to the discovery of the BitCoin Blocks, through every trade that has ever been made, every heroin, cocaine and crack deal, every single piece of the mined BitCoin "code" was stored into a single, big-ass file (like a 70 Gbyte porn compilation file) and this single file was all being simultaneously shared and modified in real time, every single transaction updating the porn compilation file simultaneously, then I suppose I could let go of the "computer in the sky", but I still can't accept that any single, shared file is going to be able to keep track of every single piece of BitCoin to the 8th decimal place.

I only read the 1st paragraph and asked this question. I have no idea what's next.

jazzc · Dec 8, 2013

Nigel Farage said:
but I still can't accept that any single, shared file is going to be able to keep track of every single piece of BitCoin to the 8th decimal place.

Why not, it 's not like our HDDs have a maximum capacity of 20MB

Nigel Farage · Dec 8, 2013

Biznik said:
6. Cryptography. You can tell the world that you have 100 million BTC, but the network will not believe you unless there is mathematical proof that this is true. This is advanced cryptography, and I do not even understand it fully myself. For all purposes, you can assume that it is impossible to cheat the network.

I really appreciate the value of the time, effort and expertise that went into this response. I most appreciate that you drew a line at the boundary of your expertise. This reinforces the legitimacy of all of your other answers. Still reading....

Macthetrix · Dec 8, 2013

Step 1: Buy cheap
Step 2: Sell expensive
Step 3: goto Step1

Patel · Dec 8, 2013

I wonder how long until bitcoin becomes the preferred method of payment for BHW services

Nigel Farage · Dec 8, 2013

Patel said:
There is no agency. There are miners, and miners join pools. So the pool finds the block first, and they are rewarded 25 btc + transaction fees for all the transactions in the block. As more miners find the block, they the number of confirmations per transactions increase.

jazzc said:
There is no agency, it's peer to peer based. In other words, other miners verify the fact that you got it. Once it 's verified, it goes into the public (shared) ledger and everyone knows it 's yours.

When you say it's "yours", you really mean that the BitCoin is recorded in the public ledger as being "owned" by a cryptographic code? long string of computer generated identifying numbers? do you pick your own ID code? is the code somehow tied to the cryptography of the BitCoin itself, like the relationship between public & private keys?

Is this the same thing as a "wallet"?

Nigel Farage · Dec 8, 2013

Contemplating the possibility that all of the world's currencies are taken over by BitCoin at some point in the future.

jazzc said:
Not infinitely, currently up to 8 decimal places -> 0.00000001 BTC.

Can someone do this math?

Total value of the entire planet's currency = the maximum number of BitCoins that can be generated.

What is the dollar value of 1.0 BTC ?
What is the dollar value of 0.00000001 BTC ?

Brain Popper:
What if 1 BTC is worth $10,000 this time next year?

jazzc · Dec 8, 2013

Nigel Farage said:
Contemplating the possibility that all of the world's currencies are taken over by BitCoin at some point in the future.

See here for a wildly inaccurate (but good enough for our purpose) calculation: http://bitcoin.stackexchange.com/questions/6088/what-is-the-maximal-value-of-1-btc

Hint: 1BTC -> $3 mil.

jazzc · Dec 8, 2013

Nigel Farage said:
When you say it's "yours", you really mean that the BitCoin is recorded in the public ledger as being "owned" by a cryptographic code? long string of computer generated identifying numbers? do you pick your own ID code? is the code somehow tied to the cryptography of the BitCoin itself, like the relationship between public & private keys?

Is this the same thing as a "wallet"?

Copy pasting from blockchain.info

What is a Bitcoin address?

A Bitcoin address is a unique identifier which allows you to receive Bitcoins. With PayPal you send funds to an email address, and similarly with Bitcoin you send funds to a Bitcoin address.

What is a private key?

A private key is a secret code which allows the user to prove his ownership of his Bitcoins. Every Bitcoin address has a matching private key, which is saved in the wallet file of the person who owns the balance. The private key is mathematically related to the Bitcoin address, and is designed so that the Bitcoin address can be calculated from the private key, but importantly, the same cannot be done in reverse.

prab1996 · Dec 9, 2013

i not know much about bitcoin . but i have a big experience of bittorrent.

in bit torrent all seeds/peers are counted by a tracker (a computer in air).
i can easily manipulate the number of seeds/peers in bit torrent (it's a secrete method)

but bitcoins looks different (how ?)
in bitcoins there is only one tracker and you can not add a new tracker yourself (you can add a tracker in bittorrent yourself )

The private key is mathematically related to the Bitcoin address, and is designed so that the Bitcoin address can be calculated from the private key, but importantly, the same cannot be done in reverse.

nope , you are going against the law of nature (every action has a equal and opposite reaction ) similarly in maths every method has a reverse.

-=-

Nigel Farage · Dec 9, 2013

jazzc said:
See here for a wildly inaccurate (but good enough for our purpose) calculation: http://bitcoin.stackexchange.com/questions/6088/what-is-the-maximal-value-of-1-btc

Hint: 1BTC -> $3 mil.

So it's possible that 50 years from now, when 1 BTC is worth 3 million dollars, people will be laughing about those retarded jackasses that bought BTC for a puny $750, then sold it for $1,250, and were so pleased that they MADE MONEY.

Check my math, but if 1BTC = $3,000,000 then .00000001 BTC = $0.03 or 3 cents. Meaning that BTC could easily be used to pay for all transactions a person needs to do, from buying a piece of chewing gum to purchasing a house.

jazzc · Dec 9, 2013

prab1996 said:
nope , you are going against the law of nature (every action has a equal and opposite reaction ) similarly in maths every method has a reverse.

Your intuition is correct! Here is the explanation:

The idea of cryptography is that it is based on very hard (read: time expensive) to reverse functions. To give you a visualisation, think of a hammer hitting a Chinese porcelain vase. The breaking action is fast, the reverse function (gluing the pieces together perfectly) is much much slower. Now imagine this gap, 1 gazillion times bigger in crypto functions.

So, in practical terms, you will be able to reverse it, but if it takes you 10 thousand years to do so, it is irrelevant. So, we say for practical reasons, it is not reversible.

jazzc · Dec 9, 2013

Nigel Farage said:
So it's possible that 50 years from now, when 1 BTC is worth 3 million dollars, people will be laughing about those retarded jackasses that bought BTC for a puny $750, then sold it for $1,250, and were so pleased that they MADE MONEY.

People who buy and sell tend to do it multiple times, especially if they made money once.

Check my math, but if 1BTC = $3,000,000 then .00000001 BTC = $0.03 or 3 cents. Meaning that BTC could easily be used to pay for all transactions a person needs to do, from buying a piece of chewing gum to purchasing a house.

Yes, but that doesn't mean something special. You still have to come to own that BTC at that time, it won't magically appear in your hands - just like $3 mil today don't.

Conor · Dec 9, 2013

Nigel Farage said:
Couldn't the computer just say "No". How do we know it's not the computer-in-the-sky that is stealing the BitCoins anyways. Those computers are frickin' SMART, and some of them have shifty, beady eyes like they are planning something sneaky.

This ^

I watched iRobot and Terminator 2, I wouldn't trust these computers as far as I could throw them. Although I think you might be confusing computers with Nazis. Newbie mistake. Computers have big anime eyes. Like Goku.

prab1996 · Dec 9, 2013

jazzc said:
Your intuition is correct! Here is the explanation:

The idea of cryptography is that it is based on very hard (read: time expensive) to reverse functions. To give you a visualisation, think of a hammer hitting a Chinese porcelain vase. The breaking action is fast, the reverse function (gluing the pieces together perfectly) is much much slower. Now imagine this gap, 1 gazillion times bigger in crypto functions.

So, in practical terms, you will be able to reverse it, but if it takes you 10 thousand years to do so, it is irrelevant. So, we say for practical reasons, it is not reversible.

you are correct ! but who knows about future

-=-

How Do You Make Change with BitCoin

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