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al_capwn
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April 05, 2011, 12:22:11 PM
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What exactly is the data being "mined" used for?
I can't find anything that states what people are computing.
For example, folding@home, we know the data is used for medical research.
What are bitcoin miners contributing to???
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April 05, 2011, 12:31:22 PM
 #2

Quote from: the FAQ
How does Bitcoin work?

Bitcoin utilizes public/private key digital signatures (ECDSA). A coin has its owner's public key on it. When a coin is transferred from user A to user B, A adds B’s public key to the coin and signs it with his own private key. Now B owns the coin and can transfer it further. To prevent A from transferring the already used coin to another user C, a public list of all the previous transactions is collectively maintained by the network of Bitcoin nodes, and before each transaction the coin’s unusedness will be checked.

In addition to hashing out new blocks, all of the transfers on the network need to be verified - so that's what your client is doing.
Jered Kenna (TradeHill)
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April 05, 2011, 12:54:56 PM
 #3

What exactly is the data being "mined" used for?
I can't find anything that states what people are computing.
For example, folding@home, we know the data is used for medical research.
What are bitcoin miners contributing to???

There's also a theory it's used by Al Qaeda. Or it would be so ironic if it was being used by wall street to calculate derivatives.....

moneyandtech.com
@moneyandtech @jeredkenna
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April 05, 2011, 04:02:50 PM
 #4

Search function. Use it.

You're essentially just running sha256 hashes with some salts. Nothing significant really.

What exactly is the data being "mined" used for?
I can't find anything that states what people are computing.
For example, folding@home, we know the data is used for medical research.
What are bitcoin miners contributing to???

There's also a theory it's used by Al Qaeda. Or it would be so ironic if it was being used by wall street to calculate derivatives.....

Don't spread misinformation please.
al_capwn
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April 05, 2011, 11:19:38 PM
 #5

Search function. Use it.

You're essentially just running sha256 hashes with some salts. Nothing significant really.

Ok, so the mining process uses a Secure Hash Algorithm (http://en.wikipedia.org/wiki/SHA-2), great.
I have just finished searching for a second time and came up with these results:

search string: "what is the bitcoin data used for?"

results:
C# mining library - http://bitcointalk.org/index.php?topic=4849.0
Offering my services - http://bitcointalk.org/index.php?topic=5413.0
..."technical analysis" and overconfidence - http://bitcointalk.org/index.php?topic=5339.0
bitcoin draft spec - http://www.bitcoin.org/wiki/doku.php?id=bitcoins_draft_spec_0_0_1

search string: "what is the goal of BitCoin?"

results:
What mechanism restricts the supply of bitcoin? - http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBQQFjAA&url=http%3A%2F%2Fwww.bitcoin.org%2Fsmf%2Findex.php%3Ftopic%3D2055.0%3Bwap2&ei=a6GbTY6sA8SZ0QG7u8zjAg&usg=AFQjCNGS_-OmA3rVoDUSYNiDpfFcQLITvA
Myths - Bitcoin - https://en.bitcoin.it/wiki/Myths
bitcoin - http://encyclopediadramatica.com/Bitcoin

Notice there is no explaination of what the data our computers are processing is used for.



Similar distributed computing projects clearly state what the data is used for:

Seti@home (http://setiathome.ssl.berkeley.edu/):
"SETI@home is a scientific experiment that uses Internet-connected computers in the Search for Extraterrestrial Intelligence (SETI)."

Folding@home (http://folding.stanford.edu/):
"Our goal: to understand protein folding, misfolding, and related diseases
You can help scientists studying these diseases by simply running a piece of software"


Yet no where on BitCoin.org is it stated what the data being processed is used for.
Why so secretive?  Why have to pay people money to process the data??
theymos
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April 05, 2011, 11:23:37 PM
 #6

The work is used to create blocks, which are necessary for the Bitcoin network to function. That's all. It's very different from @home projects in that the work is totally useless outside of the network.

al_capwn
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April 05, 2011, 11:27:36 PM
 #7

so this is non-productive
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April 05, 2011, 11:29:33 PM
 #8

Yet no where on BitCoin.org is it stated what the data being processed is used for.
Why so secretive?  Why have to pay people money to process the data??

It's not that anyone is being secretive, but rather it looks like there's no simple, one-stop "What is this Bitcoin-thingy, anyway?" which can answer your questions.

No, wait - maybe this will help. Go to Bitcoin's main page, click on the "FAQ" link, and read the topics that deal with how it works. Be sure to click on the link to the white paper.

Like my answer? Did I help? Tips gratefully accepted here: 1H6wM8Xj8GNrhqWBrnDugd8Vf3nAfZgMnq
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April 05, 2011, 11:58:40 PM
 #9

This is a better explanation
https://en.bitcoin.it/wiki/Man_page
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April 06, 2011, 12:23:49 AM
 #10

The bitcoin miners contribute to the security and strength of the network - we actually have proof that bitcoins exist - have any aliens been found yet ?   Tongue



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April 06, 2011, 12:33:34 AM
 #11

sorry, but this will never be sustainable... on a small scale where nothing really happens, perhaps.  But this whole thing requires a never ending supply of electricity, a never ending supply of labor to maintain computer hardware components and software, a never ending input to combat cyber attack (not simply counterfitting, but damage to the network and destruction of credits), diligent FAITH in the false assumption that the internet will always be there, investment of too much time and effort... just to become familiar with the currency, let alone find a seller in the real world who will bypass instant payment in the form of commodities/barter or fiat currency.  And what's with the association of black-market items like controlled substances??? ummmm...  do I need some dope to make me feel like this will work???   And this Gavin Andresen is so deluded that he feels that preaching "the only downside is that this is so new (http://www.youtube.com/watch?v=4cxFeSIYNq8)," "in 50 years this MIGHT just replace the dollar as the world currency," will convince smart money to jump in.  Wow.  NEWSFLASH: the dollar is already dying and is losing its position as the world currency as I type this.  It has been so for quite some time now.

Hey everybody, this is legit! The source code tells us so!  The unalloyed, immutable source code!! TRUST US!!!
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April 06, 2011, 12:49:30 AM
 #12

Quote
sorry, but this will never be sustainable...
Everything you just said applies not only to Bitcoin, but any electronic currency, even USD.

Quote
And what's with the association of black-market items like controlled substances???
You know that paper USD (cash) is often used for illegal transactions, right?

Quote
Hey everybody, this is legit! The source code tells us so!  The unalloyed, immutable source code!! TRUST US!!!
We know Bitcoin the software works because anybody can look at the source and verify it for themselves. We know Bitcoin the currency works because people are using it.

I have a strong opinion that you are a concern troll, but in the case that you are serious, it would help your case if you could discuss things in a rational manner, rather than digitally foaming at the mouth.
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April 06, 2011, 12:58:08 AM
 #13

sorry, but this will never be sustainable... on a small scale where nothing really happens, perhaps.  But this whole thing requires a never ending supply of electricity, a never ending supply of labor to maintain computer hardware components and software, a never ending input to combat cyber attack (not simply counterfitting, but damage to the network and destruction of credits), diligent FAITH in the false assumption that the internet will always be there, investment of too much time and effort... just to become familiar with the currency, let alone find a seller in the real world who will bypass instant payment in the form of commodities/barter or fiat currency.  And what's with the association of black-market items like controlled substances??? ummmm...  do I need some dope to make me feel like this will work???   And this Gavin Andresen is so deluded that he feels that preaching "the only downside is that this is so new (http://www.youtube.com/watch?v=4cxFeSIYNq8)," "in 50 years this MIGHT just replace the dollar as the world currency," will convince smart money to jump in.  Wow.  NEWSFLASH: the dollar is already dying and is losing its position as the world currency as I type this.  It has been so for quite some time now.

Hey everybody, this is legit! The source code tells us so!  The unalloyed, immutable source code!! TRUST US!!!

Do you have any bitcoins to sell?

(gasteve on IRC) Does your website accept cash? https://bitpay.com
al_capwn
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April 06, 2011, 12:59:31 AM
 #14

This is completely rational, but to say something irrational would be... ohhh, I dunno... to say USDollars need the internet to be sustainable.
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April 06, 2011, 01:00:15 AM
 #15

No, of course I don't have any bitcoins to sell.  It's quite obvious I just discovered this.
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April 06, 2011, 01:06:50 AM
 #16

The bitcoin miners contribute to the security and strength of the network - we actually have proof that bitcoins exist - have any aliens been found yet ?   Tongue

A lot of people learn about mining and think it's a waste of energy, but the way I look at it, that couldn't be further from the truth.  Mining activity ensures the security and strength of the bitcoin system.  And if that helps bitcoin become a sound, digital currency, it's hard to over-estimate the value of that.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
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April 06, 2011, 03:06:45 AM
 #17

Some people skills, anyone?  Treating newcomers as opponents without taking the time to figure out what they're saying is pretty early on the list no matter where or how you learn them.

@al_capwn Don't treat those few responses as representative.  I will be happy to answer your questions--no one should be expected to magically understand something as complicated as BitCoin without some detailed, patient feedback.  BitCoin does work, it just takes a little while to fit into your head exactly how.  Don't give up yet--I wouldn't want you to miss out on something this cool just because you didn't get your questions answered by the right people.

Your question about what miners are doing is perfectly legitimate, and I agree with you that very few sources on bitcoin explain this properly--it's one of my pet peeves, though I also understand that most BitCoin early adopters aren't exactly customer service professionals.

In order to answer it effectively, let me first explain what BitCoin is and what problem it solves.  These two things are not typically well explained on most websites, and it is difficult to appreciate just how effective BitCoin is until they are understood.

What BitCoin is:  An agreement amongst a community of people to use 21 million secure mathematical tokens--"bitcoins"--as money, like the Iroquois used wampum.  Unlike wampum, there will never be more bitcoins, they are impossible to counterfeit, they can be divided into as small of pieces as you want, and they can be transferred instantly across great distances via a digital connection such as the internet.  This is accomplished by the use of powerful cryptography many times stronger than that used by banks.  Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.

Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed.  They are like a local currency except much, much more effective and local to the whole world.  As an example of how effective the community is at "backing" the bitcoin, at the beginning of this week someone sold 30,000 bitcoins on the largest exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3.  But within a couple of days, the price on the exchange has fully rebounded and bitcoins are again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trade.  The ability of such a small economy (there are only 5 million out of the total 21 million bitcoins circulating so far, or about 3.75 million USD worth at current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins are already working beautifully.

What problem BitCoin solves:  Mathematically, the specific implementation of the bitcoin protocol solves the problem of "how to do all of the above without trusting anyone".  If that sounds amazing, it should!  Normally a local currency has to trust all kinds of people for it to be able to work.  So does a national currency.  And in both cases, that trust is often abused.  But with bitcoin, there's no one person who can abuse the system.  Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else's coins without having direct access to their keys.  People who break its mathematical "rules" simply end up creating a whole different system incompatible with the first.  As long as these rules are followed by someone, the only way bitcoin can fail is for everyone to stop using it.

This marvelous quality of not having to trust anyone is achieved in two ways.  First, through the use of cutting-edge cryptography.  Cryptography ensures that only the owner of the bitcoins has the authority to spend them.  The cryptography used in BitCoin is so strong that all the world's online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen.  It's like if each banknote in your pocket had a 100-digit combination lock on it that couldn't be removed without destroying the bill itself.  BitCoin is that secure.

But the second way of securing the system, called the "blockchain", is where the real magic happens.  Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been "paid" to someone else, you could sign over the same coins to multiple people in what's called a "double-spend attack", like writing cheques for more money than you have in your account.  Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don't exceed the amount of money you have.  Even so, most people won't accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, even if they are kept in a digital form.  Not to mention, sometimes a bank employee can abuse their position of trust.  And, in traditional banking, the bank itself doesn't have to follow the rules you do--it can lend out more money than it actually has.

The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called "mining".  If you're interested I'll be happy to explain specifically how this happens, but this is the work bitcoin miners are doing--they're not doing any other work for anyone else, and it is very easy to check this both in the sourcecode and also just by observing a running miner carefully, because this is the only data that enters and leaves the program.  In return for this critical role, the bitcoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule.  As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another--again in a highly competitive market to ensure the lowest possible cost.  The transactions are verified and locked in by the computational work of "mining" in a very special way that means no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.

This means that no matter where or how you process bitcoin transactions, the network remains secure.  Which is incredible--no one else has ever tried to create a system that worked this way!  All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks.  BitCoin doesn't.  So it's very fair to ask what amount of energy goes into securing the bitcoin network, but you need to understand what BitCoin gets in return for this.  And as someone who's worked extensively in IT, I have to say that all security costs money.  I strongly doubt, however, that a bank could afford to secure their financial systems as cheaply as BitCoin has, nor as effectively.  And unlike banks, every element of BitCoin is laid bare for people to look at.  If there is any way to attack BitCoin profitably, people are welcome to try.  At least 3.75 million dollars' worth of trust is sitting there saying it can't be done.  And as BitCoin scales up, the coins become worth more--thereby leading to higher and higher security.  BitCoin truly is a beautiful technology.

Ask me anything you need to about the parts you don't understand.  I'll be happy to explain them to you.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
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April 06, 2011, 05:33:01 AM
 #18

That's a nice intro eMan, thanx (please remind me of this post in a couple of weeks when i expect to have my desktop machine working, and my wallet retrieved, and i'll send ya a tip Smiley )

(I dont always get new reply notifications, pls send a pm when you think it has happened)

Wanna gimme some BTC for any or no reason? 1FmvtS66LFh6ycrXDwKRQTexGJw4UWiqDX Smiley

The more you believe in Bitcoin, and the more you show you do to other people, the faster the real value will soar!

Do you like mmmBananas?!
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April 06, 2011, 08:34:05 AM
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That's a nice intro eMan, thanx (please remind me of this post in a couple of weeks when i expect to have my desktop machine working, and my wallet retrieved, and i'll send ya a tip Smiley )
Thanks TiagoTiago, and feel free to copy + paste it, everyone.  I only advise that you do so under situations where you or someone else is able to offer meaningful follow-up help for people who have further questions.

If you found my post helpful, feel free to send a small tip to 1QGukeKbBQbXHtV6LgkQa977LJ3YHXXW8B
Visit the BitCoin Q&A Site to ask questions or share knowledge.
0.009 BTC too confusing?  Use mBTC instead!  Details at www.em-bit.org or visit the project thread to help make Bitcoin prices more human-friendly.
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April 06, 2011, 12:38:23 PM
 #20

Search function. Use it.

You're essentially just running sha256 hashes with some salts. Nothing significant really.

What exactly is the data being "mined" used for?
I can't find anything that states what people are computing.
For example, folding@home, we know the data is used for medical research.
What are bitcoin miners contributing to???

There's also a theory it's used by Al Qaeda. Or it would be so ironic if it was being used by wall street to calculate derivatives.....

Don't spread misinformation please.

Sorry I guess the sarcasm didn't translate properly. I should of said I'm joking and it's been posted before, search or go to the FAQ.
 

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@moneyandtech @jeredkenna
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