Bitcoin mining and crypto currencies

[Bin Hex 12]

Okay, okay, okay. Wait. The bitcoin company sells you these 'blocks' of data that have bitcoins (digital codes) in them. But there will only ever be a finite amount of bitcoins (they'll all be discovered eventually).

So, the faster computer/banks of computers you have, the more bitcoins you'll have. Buying the opportunity to mine them now, for whatever they cost, gives you a bigger share of the overall number of bitcoins...

They're propagating the currency. Tbh, it sounds well dodgy. How much is a block?

Yes, but as I said earlier, there's a catch with the difficulty metric.

The more computing power that's thrown at them, resulting in them being found more quickly, makes the rest even more difficult to find. The more that are found, the harder it is to find the rest.

 

[Happyhonkaman]

There are are finite number of Bitcoins. They are hidden in encrypted blocks - anyone can buy an unencryption machine and start mining blocks. They get a certain number of Bitcoins for every block they uncover, unlocking the extra Bitcoins.

The reward they get reduces eventually as the more they uncover the more the value of individual Bitcoins decreases.

Eventfully all bitcoin will be mined and no more will ever be created and they value my then rise, and rise.

How do you know when you discover one?

 

[Bin Hex 12]

How do you know when you discover one?

No idea. I presume the machine tells you.

The whole thing is peer reviewed through the exchanges - there is no "Bitcoin Company" per se.

They also monitor for fraudulent mined blocks.

It's really no different from any other type of commodity trading/processing.

 

[slick fingers]

How do you know when you discover one?

Through your bitclient

 

[slick fingers]

How much is a block?

Its unknown, theres some probablity equation out there alright to estimate it's value, like its going to take over 100years before its all mined

 

[Happyhonkaman]

Through your bitclient

Some internet programme that verifies the code?

I still can't fathom how a data package can have a value

 

[The Curious Lozenge]

I can understand the bitcoin itself, I think, but I am baffled by the mining stuff. What is the purpose of the computations?

it simulates the limited supply of something like gold. the amount of gold on the earth is finite and so we attach value to that. the bitcoin becomes harder and harder to "mine" as the problems become more complex to solve. the rate of new bitcoins decreases and its value increases. of course its value is linked to demand as well, but if the complexity of a bitcoin problem stayed the same it would quickly become worthless and the market would become flooded with them.

 

[The Curious Lozenge]

its not worth mining them for your average person now. you need a lot of capital to set up a decent mining rig. if you want to make money on them you should be buying them and waiting to sell when the value rises. but the ship has sailed tbh, they are vastly inflated right now and extremely volatile.

 

[Afro_Samurai]

it simulates the limited supply of something like gold. the amount of gold on the earth is finite and so we attach value to that. the bitcoin becomes harder and harder to "mine" as the problems become more complex to solve. the rate of new bitcoins decreases and its value increases. of course its value is linked to demand as well, but if the complexity of a bitcoin problem stayed the same it would quickly become worthless and the market would become flooded with them.

Best explanation I've heard of it yet.

 

[slick fingers]

Some internet programme that verifies the code?

Ya, or a software programme for your pc

its not worth mining them for your average person now. you need a lot of capital to set up a decent mining rig.

the new intel chips run on fairly low wattage, you could get a nice gtx video card aswell, ya could mine maybe 0.05 bits a week, if ya keep an eye on your electricity bill ya could do alright