Tech nerds: Explain bitcoins

[WoodyO]

You don't use Tor? What kind of criminal are you?

 

[mrplunkey]

I am not mining, but I do have a Tor client that is configured as a relay.

https://www.torproject.org/

It's a routing scheme that uses PGP to wrap network packets. But it wraps a message multiple times and then routes the message through the unique set of servers that know how to unwrap the message and send it forward. That's what TOR stands for -- (T)he (O)nion (R)outer. Your hidden IP packet is wrapped in successive layers of PGP protection. Each server in the routing chain can unwrap only the outer layer, and then send the message forward. No one knows if they're a genuine exit node or if they're just routing the message on through the network.

 

[samoth]

You don't use Tor? What kind of criminal are you?

A criminal who doesn't know much about computers, apparently.

Can I buy a tor with bitcoins?

 

[mrplunkey]

A criminal who doesn't know much about computers, apparently.

Can I buy a tor with bitcoins?

RS wood.

 

[mrplunkey]

So this stuff functions completely outside of banks and legal entities? What's to stop that site from shutting down and taking my bitcoins with them? Is there, like, an FDIC equivalent?

Bitcoins aren't located in a central bank. The value of bitcoins is spread across thousands of servers that acknowledge the validity of transactions. There's no central bank to raid. There's no person to arrest. It's a distributed, virtual currency.

 

[samoth]

Bitcoins aren't located in a central bank. The value of bitcoins is spread across thousands of servers that acknowledge the validity of transactions. There's no central bank to raid. There's no person to arrest. It's a distributed, virtual currency.

But if they're not insured, what happens if my computer dies, or is the "bank" where my data is stored closes shop?

And if they're virtual, isn't it inevitable that someone will hack the algos and break the system?

I find the concept behind bitcoins and the like interesting, but I lack a basic understanding how they work.

 

[samoth]

RS wood.

I googled this and am now even moar confused.

 

[mrplunkey]

But if they're not insured, what happens if my computer dies, or is the "bank" where my data is stored closes shop?

And if they're virtual, isn't it inevitable that someone will hack the algos and break the system?

I find the concept behind bitcoins and the like interesting, but I lack a basic understanding how they work.

You need to backup the private keys in your bitcoin wallet.

Download bitcoin and set it up. I think I still have a few cents in my wallet. I'll send you a coin if I do.

And no, it's not "breakable" in that a whole host of servers maintain the chain of transactions.

 

[mrplunkey]

I googled this and am now even moar confused.

I used to make fun of Redsamauri for falling for any Earthy marketing trick. Vibrams, organic-food, locally-produced items, etc. etc.

He typed something one time that made it look like he had paid for a fast. Yeah, he paid for not eating.

So since then, anytime someone pays for something that shouldn't cost money, I say "RS wood".

 

[samoth]

I used to make fun of Redsamauri for falling for any Earthy marketing trick. Vibrams, organic-food, locally-produced items, etc. etc.

He typed something one time that made it look like he had paid for a fast. Yeah, he paid for not eating.

So since then, anytime someone pays for something that shouldn't cost money, I say "RS wood".

D'oh, I shoulda pieced that one together.