Understood, and I get the point. Bitcoin isn't an actual coin that you can jangle in your pocket and toss across the counter at McD's.

But then actual coin is just chunks of metal that have less value than what's stamped on the face. It's just a way of recording the exchange of funds. Meanwhile, a swipe of your debit card is just one computer confirming the exchange of a sum of money to another computer in exchange for real-world goods...which is exactly like Bitcoin.

Just trying to make the mysterious world of Bitcoin a little less mysterious.

Unlike other currencies, where say the Bank of England can produce more bank notes, thats not an option with cryptocurrency.

I totally understand - and I share - your concerns about the underlying value of Bitcoin (which is why I don't own any...yet). But if you put that aside (difficult, I know) and just think of Bitcoin as a way of recording who owns what, then it becomes just like any other currency.

For example, countries used to issue currency based on the value of its gold reserves - the gold standard - so that the piece of paper (cloth, actually) that you have was actually an IOU for that much gold from the central bank's reserve. That was abandoned years ago and, now, countries issue currency on the basis that "they're good for it". So how does this differ from Bitcoin?

One notable difference is that Bitcoin has a limited supply: 21 million pieces. There will never be any more, so the worth of each coin will increase once that 21 million is entirely in circulation. Conversely, the Bank of England could mint a few hundred million more pound coins, devaluing what you've got in your wallet and bank in the process.

Lastly, the Bitcoin ledger is maintained in multiple locations on the web and verified constantly by the miners who independently verify Bitcoin changing hands and then validate that with other miners so as to render Bitcoin fraud as impossible. Time will tell on that front, but 2008 taught us all that a bank can go bust and take your money with it which is something not possible with Bitcoin's system that bypasses banks and central governments who can devalue or destroy the value of your money.

Of course, if the North Koreans take down the internet, then your Bitcoin is f***ed along with your actual coin!

Edited by Ray in Houston (28 Dec 2017 3.34pm)

I think this relates to how new bit coins are created through data mining, and that fundamentally by the point you reach 21m the probability of creating more bitcoins is unfeasible.

A curious side effect of bitcoin, is that whilst its value may very, the supply of new bitcoins is always controlled (as it becomes increasingly harder and more expensive to mine) and apparently this tops out around the 21m mark.

Unlike other currencies, where say the Bank of England can produce more bank notes, thats not an option with cryptocurrency.

My understanding is data mining is the payment for allowing you computer to be used to verify the block chain and transactions. So what happens when we hit the 21m mark do transactions no longer need verifying or does it get done for free.

Who do the (privately owned) Central Banks bail-out? Other banks.
Who pays to keep these failed banks and their never-ending streams of fraud and corruption in business?
We do.
Who tells you that we'll face armageddon if the financial system were to collapse?
Those that cause the problems in the first place.
Who is against the rise of crypto's because it's AN HONEST alternative to what we have had for many years now forced upon us?
The banks.

We have been absolutely fleeced for decades. Time for a change.