Governments have the power to legislate and that's all they need.  Governments can require any transaction using bitcoin be reported and the person transferring the bitcoin can can be made to show proof of the price at which it was acquired.  Put money in a checking account and the bank must issue a 1099 if a person receives any interest.  Us a bitcoin anywhere in non-black market commerce and the government will have the power to regulate it.   Bitcoin activity in blackmarkets can't be controlled but that may not be of much use to most people.   As the US keeps issuing more and more Fiat money, bitcoin could continue to rise but, the day it is ever transferred to buy something or pay for service, capital gains taxes will be due.   Engage in a transaction and do not report your gain and you are placing yourself in jeopardy.  Take your chances.  Do what you want but, you must know the law and know the consequences if you choose to ignore it.

That means nothing.   So you have a bitcoin, you can't buy anything with it.  You cash in at coinbase.  The US Congress passes a law requiring any exchange to issue a 1099 form for any conversion to cash.  What record do you have proving your basis price?  Don't have any,  bingo, the IRS says you have a 100 percent capital gain.  You can bet that legislation is in the works to get access to capital gains taxes on bitcoin transactions.  Buy a car and use bit coin, the dealer will be required to report the transaction.  Buy property with bitcoin, the transaction will be reported to the IRS.  Think carefully people.  Tax is one thing, tax and penalty at 20 percent interest is another.

Anyone  who thinks they can get around a power house like the US IRS is making a big mistake.  Drug dealers fill prisons and so can bitcoin tax evaders.  About all Bitcoin is good for is blackmarket transactions and, that is actually very useful.   

It's anonymous until you need to convert to cash at all these bogus exchanges.   Since we can buy almost nothing directly with a bitcoin we need to convert to dollars or some other tender to engage in real trade.  The US government will have no trouble locking down entities like coinbase whenever they feel the need.   Bitcoin is still and will likely remain a blackmarket tool  for a long time.  Try paying for a new car with bitcoin, good luck.

I’m having trouble understand what should be a simple issue and that is the use of the private key.  I know how public/private key pairs work.

I understand that I kind of need an address for people to send me bitcoin which is associated to a wallet.  But, once I have a bitcoin it is bound to a private key which is nothing but a big long number but I don’t know how to get at that simple number.  All this stuff about seeds for restoration just don’t add up.  Just give me the number so I can take it off line and protect it.   All these things to scan and wallets to maintain just to deal with a simple number, just a string of digits. 

All I need is the private key number,  I roll it out, protect it, get rid of all this wallet stuff until the day in 5 or 10 years when I want to send someone my bitcoin. Then I create a wallet and address and put my private key into it.

How do I get at my private keys.  It’s clear I just don’t understand enough yet and I just can’t commit to a currency system with the just “trust us, it all works”.  I keep reading and just get lost in all the details.

It is my understanding that

1 bitcoin = 100,000,000 satosi units

That's trillions of units.  So what is the point of bitcoingold, bitcoinsilver, bitcoincopper, litecoin etc etc.  Why is all this happening and where is the value.  It starting to look like what the Fed does with money printing. 

Forget the subject of smart contracts and lets focus just on a currency.  Why do we need anything other then just the bitcoin block chain?

If I send my bitcoins from coinbase to my trezor wallet, can I do the same or does the key change.  I know how public/private key pair encryption works but, I still don't completely understand the mechanics of how the block chain uses the keys.   If I send to my trezor wallet, will that private key have the ability to get to my BTG on a different wallet?  If my bit coins are sent to someone else, will that person be able to get to the  bitcoin gold if I have not done anything before the send?  If I just ignore all this and then send my bitcoins does the new owner have the ability to get to the bitcoin gold.   Seems like a lot of overhead and coinbase should do something to cover this for their customers. 

Thanks,  I really don't like they way all these wallets handle private keys.  It's just a string of numbers, we should have the option of dumping the raw numbers to a backup.   I hate the way trezor makes me play games with all these seed words.  Just give me the number.

Looked for threads about bitcoin gold fork but did not find what I was after.

Let’s say i have a small amount, 1000 in dollar value at coinbase, the same on my trezor and the same at my blockchaininfo wallet.  

Now we have a bitcoingold fork and suposidly I have some amount of coin in that block chain.   I don’t want them.  What is the mechanical process to sell them off?  Is the same key structure in place.   Are my bitcoin private keys the same.

I don’t like where all this fork stuff is taking us.  All I want is bitcoin and 1 process to manage them.

If there are threads which cover this pointers to them would be helpful.

Thanks.

The US banks move trillions and trillions each day and you think bitcoin is going to kill banks.  If that is your belief, you may wish to take a much longer look at the workings of the US Federal reserver and congress not to mention the ECB and China Central bank.

The US Federal Reserve, ECB and Central Bank of China can kill off bitcoin any time they want and turn it into nothing but a money changer for black market enterprises.

If the US Government decides to make bitcoin transactions illegal, would I risk my net worth by using it?  What could I possible gain by taking such a risk?

That was a big help.

Thanks.

Over time I make 1000 transactions,  when I startup my wallet app, i have a balance.   It has also been explained to me that no balance is held in the records for any given address or public key.  This implies that each time I send, a balance tied to my address must be generated.   Am I close on this assumption.

How are records stored,  is it similar to a table based relational system like mysql?  If not is some kind of hashing used to find records in the data for a given address?

"No central bank, or anyone, can create bitcoins past the 21 million limit."

Oh yes we can.  Bitcoingold, Bitcoinsilver.  We can fork this stuff till hell freezes over and that is a big hole in the system.


"As time goes on, the Fed will want to create more dollars.  (As it always has.)"

And so will the scammers who are taking over bitcoin and inflating the supply with these bogus forks.


"So, I'm still thinking that gold and silver, whose scarcity is secured by physics, rather than computer code, are the superior forms of money for improving our freedom from governments and bankers."

Right you are,   after thousand of years gold/sliver/copper are still holding value and bitcoin (AKA compute code) is already being corrupted and manipulated into being just another fiat.   It's looking like it was too good to be true after all.

This is all bad news.  We have been told over and over and over.  There will never be more then 21,000,000 bitcoins.  So how do we get around that so we can turn bitcoin back into fiat which can be inflated.

Bitcoin
BitcoinCash
BitcoinGold

what's next
BitcoinSilver
Bitcoin Platinum
Bitcoin Rhodium
Bitcoin Copper
SuperBitcon
LeftFootBitcoin
RightFootBitcoin

all will never grow past 21,000,000.  The cracks are starting to develop.  I'm selling out and going back to real gold and real silver.  Too bad, this could have worked but, in the end it can be inflated just like any other fiat which makes it fiat too.  It's just another fiat system only digital as is the Feds balance sheet.

I'm very disappointed in what people are doing to this.

If mining costs are around 1000, why is 6000 - 7000 rational?  To far out for me,  I sold and will not buy until the mining V market price spread closes.  I still can't use bitcoin at any place I need to do business and that forces me to the exchanges which defeats the whole purpose.

I wouldn't call it risky, I'd call it suicide.

The question is a total waste of time.   If quantum computing were to become available and 1 system suddenly had the computing power of all the computers ever built, bitcoin is the least of our troubles.   Bitcoin is built on top of asymmetric cryptography.  Well, so is everything else,   all of banking and all of modern digital commerce would fall under attack.   

If the concept of quantum computing becomes reality,   there will be a million things more important then bitcoin which may be destroyed.

You are asking a general question about the subject of encryption.

It's not a topic for a 1 line answer.

Google the following

"asymmetric cryptography"

"what is public private key pair encryption"

Find a copy of Simon Singh's book "The Code Book"

You will learn a lot more by starting there then what you are going to get here.

 -------

Key pair encryption is based on an obscure relationship between larger prime numbers and their products.

first prime number    982450151
second prime number 982451581

product

982450151 * 982451581 = 965209704103638731

The private is key is made up of 982450151 and 982451581
The public key is 965209704103638731

lets says our message is "good luck"
To encrypt the message, send the message  and public key of  965209704103638731 to MAGIC_FUNCTION_1 the result in something like "uhrn973hl"

To dcrypt, send "uhrn973hl" to MAGIC_FUNCTION_2 along with private key 982450151 and 982451581 and the message "good luck" is back

That's .001 percent of this monster from 10000 feet up.   If you really want to understand this type of cryptography you won't get the answer here, you will have a lot of work to do.  Once you understand the cryptography, then you can dive into the topic of digital signatures.   

The easy answers you seek are not here.

WOW!  Let me guess, you are a software engineer?

As a software engineer who has help others to understand public/private key pair encryption, I will tell you 90 percent of the population has no way of understanding what bitcoin is all about.    As was stated, geeks will eat this stuff up.   As for cut and paste, I find everything about smart phones to be stupid and the cut and paste implementation is as bad as Morse code.  Bitcoin in the hands of people who do not understand the concepts of encryption, digital signatures, linked lists, blockchains, network transport protocols is like investing with Bernnie Madoff.   “TRUST US”  They will be putting their funds into something they do not understand and that is anything but investing.   

Bitcoin for non-technical people is a bad idea at the current point in it’s evolution.   A ton of work still needs to be done for it to be a currency for the masses.  At this point it's not currency at all.

A better question is "why wouldn't bitcoin be used to support terrorists?".

Any unit of value gold/silver/platinum/bitcoin or commodity along with weapon, drugs which any 2 parties see as having value are now and will always be used by legal and illegal entities.   If a terrorist can transfer funds with anonymity being provided by cryptography of course they will use it.  The use cash and gold, why wouldn't the use bitcoin?

Looking at the past gets you nothing.