# Where do bitcoins come from to start? **URL:** \ **Category:** Factual Questions\ **Created:** [March 1, 2021, 8:10pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057 "2021-03-01T20:10:40Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 4, 2021, 9:26pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/61 "2021-03-04T21:26:32Z")
> [@naita](#): > > If you make sure no one knows it’s your wallet, the transaction is anonymous. And if you really, truly make sure of that, then the bitcoin is useless to you. At some point, you’re going to use the contents of that wallet to buy something tangible, and probably multiple tangible things. And every one of those people you’re buying from will know what address to ship to, or who walked up to their counter, or have some other means of identifying you. And as soon as there are a few information leaks like that in the system, it becomes easy to piece together the rest of the information. Let’s say that the police nab a mid-level drug distributor, and as part of his plea deal, he identifies the bitcoin wallets he controls, and who transacted with him for what. Now the police know which wallets were used to make criminal payments. And if a bunch of those wallets also had transactions with some other wallet, that one is probably controlled by a criminal, too. You build up the whole network, and you figure out where the money laundering is, and which of those wallets are used to buy luxuries, and so on. ---
**Author:** ![Kimera757](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kimera757/32/3765_2.png) [@Kimera757](https://boards.straightdope.com/u/Kimera757)\ **Post date:** [March 5, 2021, 12:27am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/62 "2021-03-05T00:27:11Z")
They’re as anonymous as Swiss numbered bank accounts (that were anonymous once upon a time). I see then as nothing but speculation backed by nothing, but worse, the “little guys” use exchanges to store their cryptocurrency coins on. That’s like giving someone the numbers of your Swiss bank account and then trusting them not to rob you, get hacked, etc. (Some little guys use wallets, but some of the little guys aren’t too tech savvy and lose access to those wallets, so they feel exchanges are safer.) ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [March 5, 2021, 1:54am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/63 "2021-03-05T01:54:09Z")
> [@Kimera757](#): > > They’re as anonymous as Swiss numbered bank accounts (that were anonymous once upon a time). They’re as anonymous as a numbered Swiss account would be if the entire transaction history of the bank were available to the public. Which is to say: not very. ---
**Author:** ![FlikTheBlue](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fliktheblue/32/10972_2.png) [@FlikTheBlue](https://boards.straightdope.com/u/FlikTheBlue)\ **Post date:** [March 5, 2021, 2:00pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/64 "2021-03-05T14:00:26Z")
> [@Sam\_Stone](#): > > Bitcoin has been soaring in value for a couple of reasons, imo: First, a lot of big money players are getting scared about the stability of the dollar. Endless rounds of QE and low interest rates spell inflation if the velocity of money is restored. Inflation worries drive money into crypto Although inflation this is a risk, I still don’t understand why someone would see Bitcoin as a solution to minimize that risk. Wouldn’t euros, yen, Canadian / Australian / New Zealand dollars, or pounds be better alternatives than bitcoins? ---
**Author:** ![zimaane](https://avatars.discourse-cdn.com/v4/letter/z/a3d4f5/32.png) [@zimaane](https://boards.straightdope.com/u/zimaane)\ **Post date:** [March 5, 2021, 10:05pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/65 "2021-03-05T22:05:06Z")
I am not losing sleep about inflation myself, but I imagine the crypto bugs would say that the governments issuing these currencies are also irresponsibly borrowing and spending, and the euro/yen/swiss franc etc are also set to lose value. (One reason I am not overly concerned about inflation is that all the extra money being created seems to be going to asset purchases, rather than consumption. Assets like bitcoin.) ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [March 6, 2021, 3:55am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/66 "2021-03-06T03:55:27Z")
Why? All those countries are printing nonstop too. Bitcoin is up five fold in six months because everything is up x-fold in the last six months. Gold, oil, real estate, pretty much any stock at all. Medicine and education are more expensive than ever. Did bitcoin really rise in value? Or did fiat currencies just fall in value? ---
**Author:** ![Snarky\_Kong](https://avatars.discourse-cdn.com/v4/letter/s/a183cd/32.png) [@Snarky\_Kong](https://boards.straightdope.com/u/Snarky_Kong)\ **Post date:** [March 6, 2021, 5:21am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/67 "2021-03-06T05:21:29Z")
The djia is up ~15%, oil is up like 60%, gold is down… I’m pretty sure none of education, real estate or medicine are up 400% in the last 6 months. ---
**Author:** ![Great\_Antibob](https://avatars.discourse-cdn.com/v4/letter/g/e47c2d/32.png) [@Great\_Antibob](https://boards.straightdope.com/u/Great_Antibob)\ **Post date:** [March 6, 2021, 7:03am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/68 "2021-03-06T07:03:16Z")
> [@Snarky\_Kong](#): > > The djia is up ~15%, oil is up like 60%, gold is down… Precisely. Any analysis of the value of bitcoin over the last decade shows it’s been more of a speculative investment than a potential store of value/ hedge against inflation. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [March 6, 2021, 5:22pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/69 "2021-03-06T17:22:05Z")
You’re being too specific. I didn’t say everything was up exactly 400% in exactly 6 months. ---
**Author:** ![Bijou\_Drains](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bijou_drains/32/2814_2.png) [@Bijou\_Drains](https://boards.straightdope.com/u/Bijou_Drains)\ **Post date:** [March 7, 2021, 12:17am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/70 "2021-03-07T00:17:24Z")
Is it not true that people who are doing illegal things are big fans of bitcoin? And other cryptocurrencies? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 7, 2021, 2:36am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/71 "2021-03-07T02:36:40Z")
Yes, it’s true, because they believe that using bitcoin is somehow more secure than the alternatives. Criminals do all sorts of unwise things. ---
**Author:** ![Snarky\_Kong](https://avatars.discourse-cdn.com/v4/letter/s/a183cd/32.png) [@Snarky\_Kong](https://boards.straightdope.com/u/Snarky_Kong)\ **Post date:** [March 7, 2021, 4:29am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/72 "2021-03-07T04:29:58Z")
No, you didn’t say that because it’s ridiculous, but you implied it while leaving yourself the out of “just asking questions.” Go ahead and explain how fiat currency dropping caused BTC to soar while also causing gold to drop in value. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [March 10, 2021, 5:31pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/73 "2021-03-10T17:31:57Z")
The money printing has been going on since 2008. Gold most certainly hasn’t gone down. It’s 20%-30% higher than it was over the last decade, still, even after the decline since August. God knows why you think it’s down. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [March 10, 2021, 6:41pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/74 "2021-03-10T18:41:27Z")
> [@Chessic\_Sense](#): > > Gold most certainly hasn’t gone down. It’s 20%-30% higher than it was over the last decade, still, even after the decline since August. IOW, gold has risen almost exactly by the amount of inflation since 2008, yielding no net gain. There’s an investment strategy to follow. ---
**Author:** ![Heracles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heracles/32/487_2.png) [@Heracles](https://boards.straightdope.com/u/Heracles)\ **Post date:** [March 11, 2021, 2:17pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/75 "2021-03-11T14:17:09Z")
I really like the bugcoin analogy. The currency can be “forked”, using bugs on yellow casino chips instead of red chips. Other currencies (insectcoin, arthropodcoin) can use Golden Gate Park as a reference instead of Central Park. The allegory can also extend to a person seeing other people exchanging casino chips with insects taped on, and declaring it’s all foolishness and will never amount to anything – whereas baseball trading cards, at least, are backed by the National League. And secretly googling “how to buy bugcoin” in another tab. Oh, and you’ll find articles saying that bugcoin is wasting as much Scotch Tape as the entire nation of Austria. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 12, 2021, 7:32pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/76 "2021-03-12T19:32:51Z")
At any timescale, you can’t explain more than like 1% of Bitcoin’s price increase as being due to inflation. Inflation simply hasn’t been very large over the past decade, while Bitcoin’s price has skyrocketed. > [@Chessic\_Sense](#): > > Bitcoin is up five fold in six months because everything is up x-fold in the last six months. This is just wrong. Everything is not up x-fold in the last six months, for any x you want to choose. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [April 20, 2021, 3:48pm UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/77 "2021-04-20T15:48:42Z")
> [@Great\_Antibob](#): > > > [@Snarky\_Kong](#): > > > > The djia is up ~15%, oil is up like 60%, gold is down… > > Precisely. > > Any analysis of the value of bitcoin over the last decade shows it’s been more of a speculative investment than a potential store of value/ hedge against inflation. Yeah, I don’t really understand the practical purpose of Bitcoin (even though I own a small amount). Why would you buy anything with it if the price of Bitcoin keeps increase %300 year over year? Certainly nothing you buy is going to increase in value like that. Best I can figure, the main group of people I know who are into Bitcoin are like my weird technophile libertarian friends who like it because a) they believe it provides some sort of freedom from the tyranny of government monetary policy and b) they see people getting rich off it. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [April 21, 2021, 12:17am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/78 "2021-04-21T00:17:12Z")
So how were the original million bitcoins mined? I understand that it gets harder to mine as more are generated but does this mean that, at first, the math was trivially easy? ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [April 21, 2021, 12:35am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/79 "2021-04-21T00:35:29Z")
Essentially, yes. The rewards were also greater, 50 BTC per block mined. The difficulty comes from an artificial problem: tweak the input block until you get a hash that starts with N zero bits. There’s no known way to generate a specific hash value, so you just have to keep trying inputs until you get one that matches the desired result. If the hash just has a to start with a single zero, it’s unlikely to take more than a couple of attempts. If it starts with 30 zeroes, you have to try about a billion times. The current count is about 76 zeroes. That’s in the sextillions. ---
**Author:** ![Nars\_Glinley](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nars_glinley/32/8177_2.png) [@Nars\_Glinley](https://boards.straightdope.com/u/Nars_Glinley)\ **Post date:** [April 21, 2021, 12:46am UTC](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057/80 "2021-04-21T00:46:38Z")
Yikes and thanks! [Previous page](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057.md?page=3) [Next page](https://boards.straightdope.com/t/where-do-bitcoins-come-from-to-start/934057.md?page=5)