Bitcoin vs Banking

In my experience, it is not all that difficult to transfer money, which I have in a banking institution, to another institution, business or individual. Purchases can be made by credit or debit card, literally, anywhere in the world. I'm still a little foggy as to the advantage of giving my hard earned cash to an unidentified entity, who cannot be located, and hoping that the line of code it provides will maintain its value throughout my transaction? Can anyone put an answer into common sense, layman's terms for someone with a lot of money to invest? Neither do I understand how the supply of these lines of code can be limited. Thanks

payment

CommonCents41

Posted 2017-09-04T21:52:05.053

Reputation: 11

I think you may be interested in these related topics: What are the perceived advantages of bitcoin as a means of exchange? --- Is there any good reason to buy Bitcoins? --- What benefit does bitcoin provide over using a credit card? --- What are the perceived advantages of bitcoin as a store of value?

– Murch – 2017-09-16T21:11:00.520

Answers

I think you're a little confused about what a 'bitcoin' actually is. It is not a 'line of code'. Instead, it's more like an unspent cheque you've been given. Bitcoin is software which hundreds and thousands of people worldwide run on 'nodes', all enforcing the same rules on transactions such as limiting the amount of new bitcoin produced, and anyone can start their own node to do the same, even you. These nodes all keep track of all the unspent transaction outputs (the 'cheques') so that if you can prove you 'own' one, you can spend them and send them to someone else. This is known as decentralisation, you don't have to trust a bank or government to look after your money, you're part of that safety by running a node. No one can freeze your funds or make mistakes except you. If a node tried to enforce different rules, the rest of the network would ignore it, so everyone is forced to follow the rules by everyone else.

MeshCollider

Posted 2017-09-04T21:52:05.053

Reputation: 8 735

1The "only" problem with bitcoin and other alt-coins is that their value can change at any time unpredictably so if you were paid say $5000 in bitcoin last week, this morning you would only have about 4500 worth (unless you cashed it right then) because of market correction that has been happening for the last couple of days. So for me Bitcoin is as good as your ability to cash it right after the transaction – Andrey – 2017-09-05T03:08:52.303

with the danger, that this goes into a (non developper) political discussion or an opinion based thread :-)

bitcoin is a mathematical system running on computers to transfer values in an area, which can be described "unsecure". The design was to be able to transfer values/information, even if there are a lot of bad actors in the game. And you become your own bank. And yes, there is the risk of changes in price, cause it is market based, no instituion or government defines it price.

With FIAT money in the traditional world this is a centralized, controlled (and some people say manipulated) environment. In this world you may have less changes in the value, but it depends how you compare it. Compare the amount of goods for 100 Dollars 10 years ago and today (and compare this to bitcoin!). Or have a look at how you pay taxes, to save the banks. Or especially in the US, how you are a slave of the tax system.

Many people have problems with the idea of carrying a risk, and everyone has a different appetite for risk (in this case of change in value). So depending on this capability, the use case for bitcoin can make sense or not.

The ability to gain autonomy in financials and the possibility to change the world with these new crypto currencies is one of the most sexiest things currently happening. In general the bitcoin value grew over the last 10 years in 100s of percents. I just don't see the risk, but this is my personal flavour :-)

pebwindkraft

Posted 2017-09-04T21:52:05.053

Reputation: 4 568