Bitcoin Forum

"Generating coins" perpetuates the mistaken belief that, well, miners generate coins.  We need a community shift to the mental model that all coins were created mathematically right at the launch of the bitcoin protocol, and that we as bitcoin users award the coins to miners in return for the processing of transactions and for securing the blockchain.  The use of "generating coins" terminology is a source of great confusion for newcomers and the most common reason for the belief that bitcoins are worthless or "imaginary".  The true source of value in bitcoins is the fact that the community chooses to value them due to their unique properties, limited amount, and inherent security, and we need to start presenting this simply to newcomers.

It is good to also change this on the official client.
"Mining" instead of "generate coins" :)

Excellent Point!  I second this!  The mining analogy works excellently!

+1

+2

Miners do generate coins. If all miners stopped mining, then no more coins would be created.

Neither would any more blocks, and the network would either have to be redesigned or revitalized somehow, or collapse.

Here's a mix proposal :

No more coins would be awarded.  We're the ones who create the coins by using the bitcoin protocol--they were all hardwired in as soon as the code was finalised as, essentially, an agreement between the people who use it.

To someone who already understands BitCoin this might seem like a head-game, but it's a critical difference for newcomers.  I think we need to intentionally reframe this in our terminology.  All these different ways of explaining the math are just abstractions, but we should be using an abstraction that leads to as little confusion as possible.  For a newcomer, if computers can just generate coins, then they're worthless.  Saying that they do is literally like going back in time and trying to sell people on paper money by saying that printing presses create dollar bills.  It's the restrictions on them and the community valuation of them that makes them bitcoins instead of just meaningless numbers.

+1.  The people I try to explain Bitcoin to have the same initial objection -- "but anyone can create coins."  It's only after I explain how the block chain works with respect to "generation" and fees that they understand.

Dude if you can explain to the average computer user how the block chain and have them understand it you'd be da man of English usage and clear communication..

Having been a geek for most of my life and not having people understand me, I started figuring out how to effectively express ideas via analogy while in college.  That helped a lot.  :)

So far I've taught two friends how it works.  I tried explaining it to my wife, but I honestly don't think she cares about Bitcoin.  ;)

I've been able to explain it well enough that people who still ask me to buy their computers for them have purchased a combined total of close to 2500 BTC between them all.  Analogies, as cdhowie points out, are key--human beings think in terms of existing concepts.

That's a special case if there are 0 miners.

If there were 99% less miners, the same amount of coins would be released.
If there were 100000% more miners, the same amount of coins would be released.

When you mine, you don't increase the supply of coins... any coins you "generate" come at the expense of other miners...

There are a fixed average amount of coins released per hour. Mining is just a competition for who gets them. Think of it as a coin fountain with miners standing around it catching them...

Users don't create coins. Miners do all the work: they do the difficulty adjustments, they create blocks, and they verify other blocks. A network with no users other than miners would still generate coins. A network made of just one miner would still generate coins. Users certainly give these coins value, but the miners create them.

Bitcoins are imaginary, and this aspect of the system is important. They were not created "mathematically" at the start. You can change the end total number of bitcoins by adding just a single "0" to the code that determines block value. These new coins would be worthless, of course, but they would still be created.

Real-life example: Due to a bug, billions of bitcoins were created in one transaction. These coins were recognized by the entire network for a while, even though they were not taken from some "global pool".

Can you clarify one thing for a n00b? I was given to believe that while yes, miners generate the blocks, the blocks are validated by every user that stores a copy of the blockchain. Is that incorrect?

If that is true, then the contention that the network as a whole, miners and non, awards bitcoins by validating generated blocks that contain them, is valid. More importantly, it would be a valuable tool in describing the system to people who don't want to know the math.

Theymos, I understand where you're coming from--but saying miners create coins is exactly like saying that printing presses create dollar bills.  It confuses the sequence of the thing with the source of its identity in the eyes of anyone who doesn't already know how the whole system works.  Coins don't take any work to create:  the work the miners are doing is to verify transactions and create blocks.  The reason we treat that one transaction they include to themselves as valid is because it allots them a subset of the pre-agreed-upon 19 million, according to the pre-agreed-upon schedule, all of which was mathematically defined from the get-go, or none of us would have started using bitcoins as money.  It is because of that mathematical definition that the multibillion coin block was considered a bug rather than just a very prolific miner, and why everyone went to so much trouble to correct it.  If the network as a whole makes a change, the network as a whole will have to agree to it before it happens, thus changing the community agreement that BitCoin is.  It's the same as the difference between testnet and BitCoin--only the latter is money, barring the emergence of a separate testnet community with their corresponding agreement.

Don't confuse the implementation with the abstraction--when you are teaching someone how to use a computer you tell them that the mouse "moves" the pointer even though technically what happens is that based on the electronic signal from the mouse's optical sensor pixels on the screen are varied in colour and intensity so that a pre-existing pattern is displayed using a different subset of pixels.  Coins are exactly as imaginary as a mouse pointer--for human beings we choose an abstraction of the underlying mathematics that makes sense without creating unnecessary confusion.  For the average user a mouse does move the pointer, the windows are the computer programs, you do click a dialogue button, and bitcoins are awarded to miners for their essential work.  And that's how all the literature and software should describe it.  Power users will know the difference.

Borogrove you are completely right about block validation, and you also make a good point.  We need to change the abstraction we present to new users.  Anyone who digs into the technical details will learn the implementation of it themselves.

That is what I would say... The bills are created by printing presses. They're given value by the people.


This is currently true, but in the future almost everyone not using an EWallet service will be using simplified payment verification. With this, you rely on confirmations to verify transactions and blocks, and confirmations are made by miners. If one collection of "allied" miners has more than 50% of the network, and they give themselves higher block rewards than are allowed, SPV clients will accept these transactions.

Additionally, if bitcoin.org releases a version of Bitcoin with different block rewards, miners could block the change even if most Bitcoin users switch to the new versions. The people using this new version rely on miners to defend them, so changing the block reward to 0 will not work even if every non-miner moves to the new system. The system will have few miners of its own, and miners on the old system will attack the new system to make it unusable. Everyone will have to either move back to the old system, make a new system with rules that the miners will accept, or abandon Bitcoin.

The "payed by the network" terminology is fine for explaining the effects of coin distribution to newbies, but it's confusing elsewhere.

Very well put eMansipater! +1

That's why I think we should explain to bitcoin newbies that the system is just like the "real" money they're already using, but better. We should keep the explanation simple and uncluttered with undue technicalities. If anyone has the desire to deeply understand how the bitcoin monetary system works then they can do so. It's just like the existing fiat monetary system we all still use - most people don't really understand how it works, nor do they care.

lol I can just imagine a book called "Bitcoin for Dummies" coming out ;)

I think it's more about changing the *mindset* for newcomers...

Anyone starting to learn about "elsewhere" is going to use a higher-detail abstraction anyways.  What this comes down to is, when introducing someone to paper money for the first time, do you tell them that printing presses create dollar bills, or that trusted organisations do by employing printing presses?  You can explain the details of the relationship later.

All I'm suggesting here is that we:

• Change our terminology for directly explaining BitCoin to newcomers at the simplest level
• Change the mining forum sub-title to something technically accurate like "Block-chain generation"
• Change the client menu option to something technically accurate and simple like "Participate in network processing"

Personally, I'm getting really tired of having to explain to 80% of all people who hear about BitCoin that bitcoins aren't "worthless because anyone can create as much of them as they want."  The whole mining thing is far and away the #1 source of confusion slowing adoption.

But if anyone can generate bitcoins, they're worthless!!!

j/k  :D