Richard Bucker

Follow the Money Bitcoin

Posted at — Nov 3, 2021

I’m still pulling my bitcoin hair out. I think if people truly understood all the moving parts they would stay the hell away. First of all credit and debit card transactions are simple and safe compared to ANY of the crypto-tokens. Second the Visa, Mastercard, and American Express bugs are generally accepted anywhere. In some cases you can still perform offline transactions. Last but not finally, generally speaking the merchant pays the transaction fees to the issuing bank which is sometimes shared with the cardholder. Futhermore if you pay off the credit or it’s a debit card then the transaction does not cost you anything.

So WTF is a crypto currency. Well it’s not legal tender so I suppose I should stop there. Right now it’s the same as a any stock you might trade except there is no company building something or investing in something else. You’re just betting against or for the price. And there is so much wrong with that.

Crypto currencies have a chicken and egg problem. Was the “system” primed with some tokens that were later assigned a value or what? Today I reason some of the bitcoin core docs and I got confused. Bitcoin Core is the software at the heart of Bitcoin’s transaction, ledger, and minning system… but how do you actually mine, sell and buy coins? Good question.

Apple co-founder Steve Wozniak: Bitcoin is mathematical purity with a very trustable format

Woz was a smart guy but there are limits to his KB. Bitcoin seems easily manipulated through social engineering and gouging. Starting at the beginning again:

Once your miner has acquired bitcoins or fractions of a bitcoin called satoshi among other names… you can sell them. You can sell them on an exchange or OTC or you can hold them. There are pros and cons for exchanges and OTC.

One problem here is that not all coins are available for sale at the same time. It’s just like the stockmarket… there has to be a buyer and a seller. Recently it was reported that there are 17M of the limited 21M coins and only 2.2M are actively working.

Now if you’ve got some cash (USD) burning a hole in your pocket then you need a wallet and you need an exchange or OTC with coins to sell. You will need credentials and you’ll need a way to pay for the coins. Using a credit or debit card will have processing fees in the 2%-4% range. ACH could be in the $3-$10 range. And this will go one of a few different ways.

If you connect to the sellers exchange or OTC then the you’ll have one set of fees from the exhange, and the pool or seller. And some sort of varialbe cost depending on how much you want to pay the ledger validator.

And if this is a big ticket item you might have a fee from an escow processor and that too will be variable. The wallet provider might have a fee too. Just think about any giftcard you’ve had.

But you say you have secrets and you can keep them. Well, that’s a joke. First of all…

And I have not gotten to human behaviour or USD going to zero. So just forget it.