How does bitcoin derive its value from mathematics and code? I’m a software developer and I write code all day long. Do I own bitcoin? I understand that a gold bar has a certain amount of value and if I have a gold bar, that translates into x amount of US dollars (well it used to but I digress). My question is: What is it that I could/would own, that would translate into how many bitcoins I have? Satoshis?
@mikeBsUToob3 жыл бұрын
This is not a sarcastic comment. I’m in the crypto space currently. I want to understand it better.
@danulestariyanto34854 жыл бұрын
Fantastic explanation....
@Ninjahankin4 жыл бұрын
Things not mentioned about bitcoin that must be addressed. Scalability: the adoption rate of crypto is still low and bitcoin is struggling with fast cheap transactions. Imagine when adoption becomes more mainstream. Decentralization: ask yourself: can you mine bitcoin? Have fun looking at your electricity bill with no blocked mined. The mining power is in the hands of a few large pools. That doesnt sound like decentralization to me. Governance: bitcoin has had many forks leading to other cryptocurrencies. What measures are placed to prevent any others? Fixed supply: so if I made a bitcoin with 5m supply is my bitcoin more valuable? 21m is just a number that someone made up. Proof of work is already an outdated concept and there are other cryptocurrencies doing thing much more effectively and efficiently. 2017 is not the same as 2020. Much more competition this time.
@exodus4 жыл бұрын
All good points and I really appreciate sharing your thoughts. You are right and these items do need to be addressed in greater detail, however, this is outside the scope of this entry level video. I'll be making a more in-depth video about BTC in the near future where all these points will be addressed in detail but I can quickly address them here. 1. Scalability: Yes a problem to be solved and precisely why other networks have forked off of BTC such as BCH and BSV, the original chain does have limitations that people are now seeing BTC as a specific Store of Value rather than a settlement chain. Of course, the idea here is to only give people information and not try to decide for them. BTC is still the King as far as market cap and the moment has an almost 60% dominance in the entire cryptosphere. On one hand, this is because of its network effect and on the other, it's the most visible. 2. Decentralization: This means more than just mining and also includes node validators which is certainly the most widely spread independent network on the planet, including satellite accessibility. It's this that makes the network robust and censorship-resistant. Mining will become more centralized as it will require more and more capital investment to start mining operations to mine the less than 15% of all the BTC left. 3. Governance: Forks are a way of self-governance and a feature of the governance model of BTC. Even forks of forks end up being valid chains. And to be clear, there have been many hard forks of the code you have never heard about because they have not been contested. A fork is needed to add functionality to the network. 4. Fixed supply: This is just math and not an arbitrary number. If you made a fork with a 5M supply then it would not be Bitcoin, but only a fork, and you as the creator could decide if you ever want it to grow or stay the same. The beauty of math and code. 5. POW: This is a matter of taste. POW has its merits, how do you think all the early adoptors became whales. Just because the difficulty rate increases with the hashrate does not mean it's outdated. Again it's determined by math to keep blocktimes at about 10 min and network fees are distributed to whoever puts in the work (hashrate) to solve blocks. Are there other systems that also work, yes, are they better. The answer is going to be a personal opinion. and everyone has one. Again thanks for sharing your thoughts about all these issues with the BTC network. -Kris
@sophiarhchard79994 жыл бұрын
Woohoo what an amazing video
@exodus4 жыл бұрын
😎 🍀 -kf
@naylor20063 жыл бұрын
Still don’t get it, I know I’m the idiot but I don’t get how it held value in the first place. I can understand broadly that now there is only 21mil and most of it has been mined so there people ‘want’ it. I understand the mining, the transaction process, all of that but when did it first create value and why? Assuming at first you could only trade it on a niche internet based market, now actual real capitalist markets accept it I get its value, but what I can’t get my head around is the start!
@john42682 жыл бұрын
My concern is that there are whales that hold large portions of the coin and can crash the market at any time. How do we recover from that? Also how can you be sure about the liquidity
@frankmooresville24803 жыл бұрын
Very well done
@MagnusMcf3 жыл бұрын
Perfection 👍
@andrewg94573 жыл бұрын
The dollar is backed by the fact that you need it to pay taxes or you’re thrown in jail
@nightshift45873 жыл бұрын
It sounds like people need to switch of nonfiction in their brains to fiction. That sounds familiar.
@weschiller2 жыл бұрын
Great video, do we worry at all about how power outtages and long term energy sustainabiltiy (and gov control over energy use) will affect the value and ability to use bitcoin? (trying to avoid getting too tin foily here, but I think there's substance to the topic)
@exodus2 жыл бұрын
Never too tin foily Wes, you've got a point. Even before we lose all power, we could lose internet technically. And if you don't think I can hear you screaming in fear at that last statement, then you are mistaken! Seriously though, I think that's why folks are now focusing on things like PoS and green-cryptos like KlimDAO: coinmarketcap.com/currencies/klimadao/. Good to have an eye toward the physical world when working in the digital after all. -SL
@weschiller2 жыл бұрын
@@exodus thank you so much for getting back to me! I have been learning so much over the past day on your channel.
@exodus2 жыл бұрын
Oh of course, Wes! We love to help the Exodus squad. Feel free to reach out to us anytime. 💯 -BT
@chesterbuckenmaieriii15474 жыл бұрын
Great explanation. Should be a public service announcement. 👏
@LayahHeilpern4 жыл бұрын
Agreeeed 🤪
@CageThePeople3 жыл бұрын
Nice boat
@apolovzla_ccs4 жыл бұрын
Everything sounds good until you get to the volatility point (you didn't talk about that). It will not be widely used unless the volatility problem is addressed.
@SnakeDoc4554 жыл бұрын
Volatility can be positive. BTC doesn't just have to be money or store of value, it can be many things and for example as a speculative asset volatility is one of the greatest things ever. Also there are Stablecoins and other measures in Crypto which address volatility, since Crypto is much bigger than just Bitcoin.
@apolovzla_ccs4 жыл бұрын
@@SnakeDoc455 Volatility can not be any positive in anyway if BTC is supposed to be adopted by anyone.
@SnakeDoc4554 жыл бұрын
@@apolovzla_ccs "adopted by ANYone"? But it's adopted by me and I find volatility great. So speak for yourself and not for anyone or everyone. Also it doesn't have to be adopted by everyone because it's free and voluntary, unlike FIAT.
@apolovzla_ccs4 жыл бұрын
@@SnakeDoc455 Sure, can you tell me if your mother, your grandma (everyone's mother) will have some benefit taking their savings to a such volatile market? you are not a reference (not any single person is), you are aware of that, aren't you? If BTC is meant to grow in value, it should be stable and accessible for anyone, and right now it lacks of those characteristics.
@resendeznathan3 жыл бұрын
As market cap grows there should be less volatility
@quasarsword74794 жыл бұрын
Catching up👍
@exodus4 жыл бұрын
Hi Quasar, we hope you found the video helpful! Let us know what you think :) -SY
@quasarsword74794 жыл бұрын
Exodus Wallet I actually knew all this stuff ,and got me in to crypto. I’m looking forward to more videos
@exodus4 жыл бұрын
Thank you for the feedback! What topics are you looking forward to see videos on? -SS
@quasarsword74794 жыл бұрын
Exodus Wallet I really don’t know lol. I will be watching for more info. I got some link and am looking for others to invest in
@braddozie34014 жыл бұрын
You know LVX token will appreciate when it covers huge markets like Forex and Commodity
@varungadia13663 жыл бұрын
Fixed supply is a counter productive
@2dgamemania4 жыл бұрын
oh so satoshis are like change, this is like something from the matrix
@michaellydon12393 жыл бұрын
Can somebody explain how I buy VGX in the U.k?
@jeremiahjohnson58032 жыл бұрын
So it's not backed by anything
@exodus2 жыл бұрын
Good question Jeremiah, Bitcoin does not have backing in a standard like the original dollar on the gold standard. However, I encourage you to determine the full value of Bitcoin for yourself. The wiki has a really good set of ideas for you to evaluate if you're interested: en.wikipedia.org/wiki/Bitcoin Honestly, the whitepaper is pretty fascinating too, but I'm a crypto geek so... 😅 -SL
@trondemicofficial30564 жыл бұрын
Hi. U do KZbin review? How to contact u?
@exodus4 жыл бұрын
Hi Trondemic 👋 We don't do KZbin reviews, unfortunately. If you need anything, please contact our Support desk by email: support[at]exodus.io 📫 --cc
@Perfect_StormCPT2 жыл бұрын
What's the real reason more bitcoin can't be produced
@exodus2 жыл бұрын
Great question. Bitcoin is algorithmically limited to 21 million in total because that's the code it uses 🦾. Feel free to learn more about Bitcoin at this link: support.exodus.com/article/1480-bitcoin-faqs-learn-more-about-btc. I hope this helps! Don't hesitate to ping us with any questions. -BT
@exodus2 жыл бұрын
I'd also like to highlight this part of our knowledge base article about Bitcoin: ➡️ support.exodus.com/article/995-what-is-a-hard-fork#about "What defines a specific blockchain network is the set of "hard" rules that govern it. Bitcoin (BTC), for example, has a fixed supply of 21 million BTC, uses a 1 megabyte limit for its block size, and has a special algorithm to adjust its mining difficulty every 2016 blocks. These are only a few of its "hard" rules that cannot be altered. Since Bitcoin is defined by these "hard" rules (also known as Consensus Rules), changing even just one of them would create a completely new blockchain: we call this a hard fork." I hope this brings more clarity! 🔥 -BT
@fredhoffman19072 жыл бұрын
How does it feel knowing XRP will be a part of swift and Bitcoin is booted out
@RT-op6sz2 жыл бұрын
🙃
@MetalGearMk34 жыл бұрын
Bitcoin better than Gold.
@exodus4 жыл бұрын
Hear, hear! 😊 --cc
@simonh63713 жыл бұрын
Great now I can see who this is directed at I can explain how bitcoin works in their terms. Imagine I have a piggy bank. I tell you and 9 of your friends to each put in $100. Then I tell each of you separately that your $100 is now $500 because you're a special snowflake. After a while one of you comes and asks for your $500 so I say sure no problem and hand it over. Then I have to tell the other 9 that sadly their $500 is now only $55 but if they can go and find some suckers to put money in the pot, their $55 will increase. Rinse and repeat.
@geraldbelanger64702 жыл бұрын
00
@fuge5114 жыл бұрын
She baddd lol ngl
@jimmyjohnson68923 жыл бұрын
If you had a different accent you’d be fire
@bellmobilitysucks3 жыл бұрын
Just because its scarce does not mean it has value. Very superficial and disingenuous analysis!
@jimwest633 жыл бұрын
Yep. She left out the part about how bitcoin was going to remain differentiated from the unlimited number of new cryptocurrencies which can be created using blockchain technologies, each one of which will be able to set an artificial and arbitrary limit of how many can be mined making each one of them ever so special, rare, and counterfeit proof. An unlimited number of limited issues = unlimited supply. At that point, what gives bitcoin its value? Maybe an appeal to it being the "one true blockchain based currency"? Perhaps "its the original and the best"? That's the bit that nobody even tries to explain.
@simonh63713 жыл бұрын
@Johnny Z'Salt That's just a number on a screen it only has that value when you try to cash it in. And if everyone wants to cash in their coins there isn't enough money to give them all $30k so they're shit out of luck. However if one wants his $30k thats fine, but then the value drops because the other investors have just topped up his $200 to $30k between them. It really is that simple.
@simonh63713 жыл бұрын
@Johnny Z'Salt Only after you've cashed it in. Until you do that, it's like a lottery ticket, or the jackpot on a fruit machine. Otherwise that would mean that every bitcoin investor has gained. Where would that extra capital come from? A consortium of benevolent billionaires donating money out of the kindness of their heart? It's just a common pot into which all investors put their investment. If one walks away with more, that means the other investors lose. They can't all gain. Life isn't a fairy tale.
@simonh63713 жыл бұрын
@Johnny Z'Salt Basically as soon as a lot of people try to cash out, nobody will want to invest, and the value will plummet. This happened just yesterday as you know. But when there is a big enough stampede the value will plunge to zero. Seriously where the hell do you think the massive ''win'' is going to come from? You can only cash it out as long as there are still enough other investors in the game for that cash to come from. Imagine you and 4 friends each take $100 to a poker game. The winner can walk away with $500 but for that to happen all the others will leave with nothing. It's not possible in this universe for every player to walk away with $500 in his pocket lol. That's an analogy for the bitcoin game. Money isn't just produced from thin air..
@simonh63713 жыл бұрын
@Johnny Z'Salt What do you think? Of course. In reality what would happen is the system would slow down to a snail's pace and by the time you had finished cashing out you'd be getting next to nothing. Why what do you think would happen? Some generous trillionaire would donate out of the kindness of his heart, to make up the shortfall?