Up until about a year ago, I was really into the Bitcoin scene but moved away from them for a number of reasons.

Reading through the thread here, there is some good basic info but also info that is not correct.

If you really want to how Bitcoin works, along with all the pros and the many perils, go to any of the Bitcoin concentric websites. I recommend BitcoinTalk to start with. Here you can read and post questions in the forum to people who are actually involved and knowledgeable in Bitcoins.

What can you actually use Bitcoins for? I mean, what can you actually buy with them? I think I've read pizza and maybe tacos from some Mexican restaurant. Maybe a few other things. But by-in-large, they seem to be a useless "currency" because of the simple fact you can't really buy much of anything with them. Just a few scattered things here and there. If I were, say, selling my car and somebody asked if they could pay with Bitcoins my answer would be "no". And I'm pretty sure you'd get that same answer from 99% of the car sellers out there.

So, are people just speculating that Bitcoins may become useful for buying something you'd actually want sometime in the distant future?

Telinhiker, I prefer to discuss Bitcoin on a non-specific forum site such as this. In a site dedicated to Bitcoin, people tend to confirm each other without fear of too much criticism from outsiders. However, for Bitcoin to survive, it must be explainable to a wealthy old person who is not tech savvy. This site is above-average tech savvy. If Bitcoin can't be explained here and promoted with enthusiasm, then that is a huge red flag for me and any other potential investor.

bitcoin...shmitcoin...

Frankly,it does not matter to me where you want to learn. The point I made, is that not all the info posted here is correct. I only suggested another forum that is specific to Bitcoin so that any person becomes well informed of the subject at hand...especially if they are thinking of venturing into it.

To me this is no different then this forum. I am currently shopping for a certain brand of truck. Although I could post here for perhaps some general info. Instead I am posting on a specific related truck forum where people have purchased the brand of truck and can inform me what they like about the truck and also tell what they don't like about the truck. I would rather interact with that forum in order to make the most informed decision when and if I purchase.

Bitcoin is based around a public ledger called the block-chain. The ledger says who owns what; you can think of it as a list of account numbers and balances. You move coins between accounts by publishing a transaction with the source and destination accounts and how much to move. Every 10 minutes or so, the miners collect all the new transactions, validate them, and add them in a new block to the end of the public ledger. The clever part is that Bitcoin is distributed; there's no central entity that manages the ledger, and anyone can post updates to it. The Bitcoin protocol keeps it all sane.

"Mining" means three things. First, it means validating the transactions. That means they check the source and destinations exist, that the source account has the amount specified, and that the transaction has the proper authority to move the money. Authorities are expressed using strong public key cryptology. Because of this step, you can't spend coins that don't belong to you.

Second, the miner has to solve a hard puzzle called the "proof of work". Doing this is computationally expensive in a way that can't be faked. This step is used to automatically resolve disputes when two different miners try to post different but equally valid updates. In effect they are voting, and the proof of work makes votes expensive so no-one can stuff the ballot box.

Third, the miner gets rewarded for doing the previous two things with transactions fees, and some new coins that are created out of nothing. This is the only way new coins are created. The process is called "mining" because it's doing work to produce value, much as digging in a gold mine is.

The upshot is that bitcoins are valuable for much the same reasons gold is valuable: they both exist in limited supply, are hard to fake, and facilitate trade. They are both imperishable and finely divisible. Bitcoins have the advantage over gold that they weigh nothing and can be sent digitally around the world cheaply.

Pretty much. It's not useful in an EOTWAWKI scenario.

I expect Bitcoin will evolve with the Internet. The core ideas are mathematical in nature, and as such are eternal.

Presumably.

The exchange rate will change. Bitcoin are almost infinitely divisible, and there's no problem if each bitcoin becomes worth a million dollars. We'll just trade in micro-coins.

I have some. I'm a computer scientist; I got involved because partly because it is intellectually fascinating. It is a kind of internet of money, in that the core concept is really about ownership, with currency merely the first application. Other systems will be built on top of it. Part of the attraction is that it enables permissionless innovation.

Another part is that it's a trustless system (more or less), in a good way. With dollars, you have to trust the government not to print too many of them. You have to trust the bank to look after your account. With Bitcoin, it's all based on mathematics and open source code. It's decentralised. This is important because when money is managed by a central entity, that entity has enormous power, and history shows that the power always corrupts eventually. The buying power of a dollar is a fraction of what it was 100 years ago, and that's one of the better currencies.

For some people (not me), the attraction is its potential for anonymity. Although the block-chain is a public ledger, it only stores account numbers, not real-world names and addresses. In that regard it is like cash; but with the difference that it can be sent over the internet.

For some retailers, the attraction is that Bitcoin has lower transaction fees and that transfers are irrevocable. Credit card fees and charge-backs are a big expense for retailers.

So there is a lot of potential in Bitcoin, a lot of value. And a lot of people can see that value. That's why it's still worth something, even after a long run of bad Bitcoin news. The final attraction of Bitcoin comes from this belief that it has a future, and that demand for coins will increase, and therefore buying coins now is a good investment.

Arguably Bitcoin is not very important in America, where the existing financial infrastructure is pretty good. It should be more important in emerging countries, where a lot of people don't have bank accounts (but they all have mobile phones).

I don't consider it very relevant to the interest of this forum. As a possible investment, it's very high risk. No-one should spend more on it than they can afford to lose. As a hedge against financial collapse, or hyper-inflation, gold is surely more reliable. (Or bullets, or first aid supplies, or toilet paper, or whatever.)

People argue whether gold has intrinsic value -- to me it clearly does for certain industrial uses, which may or may not be around in the case of financial collapse, hyper-inflation or whatever. Ammunition (loaded or components), first aid supplies, toilet paper, and so on have intrinsic value. The intrinsic value of paper currency is extremely low, and bitcoin has none.

I own stocks so I must be an optimist .

From everything I've read, stocks are supported by QE and the Russell 2000 has a PE of about 100 -- way overvalued. For those who have 10 minutes -- Michael Pento mp3