Bitcoin and Cryptocurrency Technologies

Recently I have read a statistic about the people's jobs who are involved into crypto coins.
They are mostly IT people.

Besides of trust ...if you are playing a lot with coins you can lose them. One should know technical details then.
I am still reading posts of people who really do not know how crypto coins are actually working.

It took me hours to get the basics and when there are events such as a hard fork I had to read about again.
I do that because of fun.
I want to know all tech details and it is fascinating for me....

In the meantime there are dealing platforms and even banks involved. You can decide that they should 'care' for your coins and store them there. It’s actually made just like an online bank account. Using such you don’t actually need to know all the details. That's the reason why crypto coins become more and more popular.

Or you can store them in your private wallet (like I do). But if I'd lose my access to my private keys (HDD crash without backup or whatever) which are making me to the owner of the public BTC addresses I lose the coins. They would remain in the blockchain without regaining any owner again.

Concerning IT security bitcoins are safe already, though.

To me it's exciting I am curious how cryto coins are developing...

 

I read blogs about bitcoin and related stuff to stay up to date. Today I've found an article that tells not to invest in BTC. First I thought it's the usual stuff like "no inherent value" and it's "magically created by computers" and other stuff... but this guy has got some points.

https://www.whitecoatinvestor.com/5-reasons-i-dont-invest-in-bitcoins/

#1 Evidently, you can't invest in everything. Saving money for future expenses sounds indeed resonable.

#2 Very much agree. I wouldn't got as far as stating I understood bitcoin, but I guess I've got a general technical understanding and know it's risky/volatile. And instead of judging about things he doesn't understand, the author just says I don't understand it, I don't touch it ...

#3 I think many crypto currency related stuff and especially ICOs tends to be overrated. Don't get me wrong, bitcoin is a great development, but for mankinds salvation and eternal enlightment (so to speak) we need more than that.
There is so much money going in, blockchain has become a buzz word and everyone wants to get a new coin system, thinking it might gain as much value as BTC (i.e. investing a few USD and being rewarded with thousands or millions over the years).

#4 Since I don't invest into anything, especially not currencies, I can't judge on that. But still, he sounds reasonable.

#5 Instead of saying "you" or "everyone" he just makes a statement for himself. Fine.

 

Well one needs to make a few things sure when it comes to online 'banking'.
But I'd never do it if I feel uncomfortable with it.

Besides of a clean PC and at least sitting behind a router/FW one needs to be informed how the bank authenticates the account/owner.
Firstly it should be a safe connection (https).

Some are using mobile TAN where a reference phone number gets a number via SMS which is a short time valid to authenticate the current transaction.
Some are providing special devices where the customer has either to scan a QR code from the screen or a device that reads a moving bar code if you insert your bank card into the device.
Some are providing their special app for smart phones which you have to register.

Concerning bitcoins there is cold storage.
http://docs.electrum.org/en/latest/coldstorage.html

You can either create a watch only wallet, or make transactions offline, sign them and then broadcast them online. You can do that on an offline client and then broadcast it on another online client. I don’t do that, though.

At the moment when you sign a transaction your private keys need to be decrypted a short time, this process can be considered as vulnerable if your PC has a sort of leakage.

When you store the BTCs on a online platform or bank you actually need (only) a user name and password. Additionally they use 2FA.

I pay online for many years already. Anything went fine so far.
Just right now I have booked a flight and paid it via credit card.

 

With block 481.824 SegWit had been activated successfully. This is a soft update and does not cause a hard fork...

This can change on November, though. Miners who have the 'NYA' in their string signalling for New York Agreement, which includes support of segwit 2x. Contrary to segwit it means a new hard fork would happen (a permanent divergence in the the block chain).

This would mean bitcoin splits again into 2 different coins by creating an altcoin.....

https://www.weusecoins.com/hard-fork-soft-fork-differences/

 

I guess many people don't know about news and details of the bitcoin regardless if they've lived in the forest or not, lol.
Only one friend I know is familiar with it, too.

Cryptocurrencies like bitcoin are fantastic to study 'capital' or appearances of capital (bank)...
It's a virtual currency based on a concept of "satoshi nakamoto".
It's a concept with predetermined behavior/progresses. But it's also made to be improved. And it's made as a de-centralized bank without any owners.

Since we know that particular humans are greedy it is very exciting to watch that....
While years ago it was profitable to mine own bitcoins the times have changed.
Miners are now organized in mining pools, their political interests are sometimes different. The might game has become a game of mining pools.

Mining pools can signalize their ideas of a change. If a change will become locked in or even activated depends on percentage of signaling, there are special rules.
If a change leads to a permanent divergence in the the block chain then there will be a new coin. You get exactly the same amount of it as you already had 'old' coins before the fork.

The current 'issues' are because of the very much increased bitcoin's popularity and traffic. 2 mining pools supported a permanent change which has created bitcoin cash as altcoin.
Bitcoin cash has got technical improvements to handle the increased traffic. The disadvantage is it that it comes from 2 mining pools which might have some control on its future.

The bitcoin has got Segwit now, technical improvements which do not lead to permanent divergence in the the block chain.
People say it is not sufficient to handle future traffic, though....people expect a new hard fork (segwit2x) on November. (Block 494784)

 

@Yen 's calculation looks correct, judging by these news:

https://segwit2x.github.io/segwit2x-announce.html
https://www.coindesk.com/block-494784-segwit2x-developers-set-date-bitcoin-hard-fork/

Discussion on reddit:
https://www.reddit.com/r/Bitcoin/comments/6u30sc/block_494784_segwit2x_developers_set_date_for/

off-topic, more or less:
1 Megahash = 0,5 Kobe Bryant lol
http://www.phneep.com/wp-content/uploads/2016/03/Bitcoin-Exahash.jpg

 

Well one of issues caused by the popularity of BTCs is the current high transaction fees.
The original purpose of transaction fees is to prevent spammig the blockchain with lots of transactions!

Firstly your signed transaction gets into the Mempool. From there a miner needs to take it and write into the blockchain.
You can set your fee to whatever amount you want or you can choose dynamic fees. Fees are related to traffic a transaction creates. The more BTC addresses are involved the more traffic.

Or you can make a RBF transaction (replace by fee). This means you can raise the fee later if your transaction should be stuck...but only if you have decided to do RBF before your transaction is made.

Generally the more fee you assign to your transaction the sooner it gets into the blockchain and becomes confirmed x times. The miner who writes it into the blockchain gets the fee.
This also means transaction with a very low fee or even no fee might be stuck a very long time.

Since there are many transactions per second and everybody wants a conformation in a 'reasonable' time people are outbidding each other to attract positive attention at the mempool

Current improvement such as segwit and segwit2x will also lead to far less fees (again).

Recently I have decreased my fee for a particular transaction to ~1 Euro and it took 8 hours until it has got 6 confirmations.

Besides of all that consider how long it'd take to send the same amount of money £25 from Europe to a non European country (no SEPA) and the bank fees!

 

ATM you have no advantage when it comes to domestic transactions, except anonymity. Finally volatility of exchange rates can also be an issue.