Quote:
Originally Posted by xpl0sive
thanks for the explanations. I'm not saying that it's not a worthwhile investment, I just don't get exactly how it works, that's why I'm asking you experts 
So the simple version is:
A person has a code stored on their computer or printed on paper. they say they want $10 for that code, for example. some one gives them $10 for it. Then that person goes to the next person and say they want $20 for that same code. Am I on the right track?
What I don't get is how do the retailers who accept these "codes" know that they will be able to get their money out? Say they have an item that they normally sell for $100. They took payment in 5 "codes" worth $20 each. Next day, the "codes" are only worth $10 each, seems to me that these "codes" fluctuate a lot. So essentially, the retailer takes a loss because they chose to accept "codes" for payment instead of actual currency. I think that maybe why only a handful of retailers are accepting these "codes" as form of payment. Regular currency doesn't fluctuate a whole lot, because governments do their best to make sure their money doesn't drop in value overnight. |
Your describing a double spend attack. Once you trade a bitcoin it asks miners to process the transaction and to check if this particular bitcoin transaction has not already been sent. This is known as confirmations. 6 confirmations is legit, 3 is 99% legit. However, a successful attack on bitcoins will fork the network and the attackers bitcoins will be legit and all others will be considered illegitimate. Known as double spending.
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