All bitcoin and most other cyrptos are trackable, In fact, every bictoin ever mined can be traced threw all wallets it's passed through since the day it was mined, and that going back to 2009. That's not a surprise and has always been known by anyone and everyone with even a basic understanding of how it works.
But it is anonymous, at least unless & until it passes through a wallet with an identifiable owner, such as a a crypto exchange. At that point, the exchange could be contacted and an account owner could be identified via the KYC thing they all do. This is why hacked/stolen crypto is such a problem for hackers to liquidate, and some hacked BTC has sat untouched for years after it's theft because it's digitally tainted.
But for those that want privacy, some cryptos such as ZCash and Monero address this by obfuscating transactions so they cannot be seen or tracked. This level of privacy is both a feature and a liability when it comes to hacking.
I hope you didn't take my teasing you too seriously.
I am not up to speed on cryptocurrency, I don't understand where the initial lump sum came from to start up. It seems like a really elaborate Ponzi scheme to me.
I hope you didn't take my teasing you too seriously.
Of course not! Usually I catch those things though.
There was no initial sum of BTC. All BTC in existence is the result of mining. The first mining done took about 10 minutes on an 15 year old computer and yielded the first 50 bitcoin. Every 10 mins after that, 10 more bitcoin.
Imagine your computer making $5 million dollars every 10 minutes while you are eating lunch.
But the current value is the open market value. A ponzi scheme has funds tied up inside of a shady business that only gives you promises and, if your are lucky enough to be early, pays you. Bitcoin is not that at all.
What is being "mined" is more bitcoin. The way mining works: Think of it as a warehouse full of Rubik's cubes. Computers are put to work solving them in a specific order, so all competing computers are working on the same cube. The first one to solve it wins and gets bitcoin added to it's crypto wallet, then the computers all start working on the next puzzle.
Every 2 weeks the bitcoin software evaluates if the puzzles are too hard or too easy and adjusts the "difficulty factor" of the puzzles so that one should be solved about every 10 minutes on average. If the average is less than that, the puzzles get a little harder, or if it longer than that, they get easier. That way no matter how many computers are competing to solve the puzzles, one will still be solved about every 10 minutes.
In addition to awarding bitcoin to the winner, bitcoin transactions submitted globally get recorded in the new block which is added to a long chain of previously solved cubes (the "chain" of blocks or cubes). Think of the solved Rubik's cube as a new block being added to the blockchain, and inside that cube/block are the latest bitcoin transactions.
That's basically how mining works. Although unlike with Rubik's cubes, there is no method to solve the puzzles. The work for the computers is simply in guessing very big numbers and see if each it guesses is the solution to the puzzle. There is no known method of computing the number. Brute force guessing is the known way to find it.
Every 2 weeks the bitcoin software evaluates if the puzzles are too hard or too easy and adjusts the "difficulty factor" of the puzzles so that one should be solved about every 10 minutes on average. If the average is less than that, the puzzles get a little harder, or if it longer than that, they get easier. That way no matter how many computers are competing to solve the puzzles, one will still be solved about every 10 minutes.
In addition to awarding bitcoin to the winner, bitcoin transactions submitted globally get recorded in the new block which is added to a long chain of previously solved cubes (the "chain" of blocks or cubes).
Where is any value being added to actual citizens and such?
Where is any value being added to actual citizens and such?
The value of bitcoin is in it's utility. It's a method of payment.
All economies NEED something to serve as a currency. Without currency, everyone can only barter with one another which is very inefficient because you want to trade your lumber for eggs but the egg guy doesn't need lumber, so you waste time finding someone that needs lumber that the egg guy wants. All that searching around wastes production time. Money was invented to solve this problem, and it also solved the problem of measuring the relative worth of completely unrelated goods.
So every economy NEEDS a money, a currency. That is a service crypto can provide, and providing that potential service to everyone is where it derives value in the market place. And bitcoin payments are made between people which is de facto proof that it is providing that service now.
The free market has clearly decided that bitcoin has value, and the above is, I believe, at least part of the reason why.