Thanks for the thorough response DannyHamilton it helped a lot.

Sorry I was a bit fuzzy on the way i was talking I do realize about the halving and that its actually more on asics than gpus I was just speaking in casual terms.



I think I understand. So the pool is like a wrapper around every participating miner. And all the miners agree to sacrifice the reward if they receive it for the good of the pool?

so miners are only generating guesses then, not performing the entire mining function in it's entirety? The pool would be doing the final check?

this leads to my next philosophical question.

OK, so at least people are getting a FAIR SHARE of what they are doing. Due to mining pools. But the question is WHY?

Think of it this way.
Maybe I am an accountant. I need to add the numbers from the sales for the company i work for for the whole year.
That would be considered a "job."
It is useful work being completed every time I add on the next transaction.
Now obvously i'd use a computer for this in today's world.

Hence, each step of the computer's computation time is considered "useful work." It generates information that is useful to my business owner, hence i get paid, hence i get to eat food and be happy. Understandable.

Now. Guessing a block.

OK everyone sees the value of finally getting the block.

But the act of guessing astronomical amount of numbers just for the sake of making a number on a computer screen change, could be equated to sheer silliness from a superficial perspective.

To use my prevous statement. OK so each step of computation time is making progress towards the goal of finally getting the number. So you might think, well buddy, it's the same thing as what you were saying. Each clock cycle is doing useful work towards the end goal.

But we only have to do it like that because the designers TOLD us it had to be that way.

we litereally set up a system that says, BLARGH IM JUST GONNA RUN THESE GIGAFLOPS SO FAST AND THEN U'LL KNOW BUDDY, ULL KNOW FOR SURE I GOT HELLA HASH POWER BUDDY SO YEA THAT MEANS MONEY!

lol it is so screwy.

it seems to break down into nonsense.

But we are creating something.
But we are creating something by doing non-useful nonsense tasks.

I guess you have to think of the social value of bitcoin. That it is a decentralized option, has good security, all the pros we know about. However on thing that is bogging it down is high transaction fees. You can't really use it as-is. You have to put it into cash form or use it within somewhat proprietary frameworks to avoid transacting too much.

But on the other side, it feels like a lot of wasted energy for the sake of sheer greed.

What I'm trying to say is that the "difficulty" concept seems arbitrary. I'm just trying to imagine a system LIKE bitcoin but that wouldn't require so much nonsense. Can you grasp what I am thinking?

Can we have decentralization, ease and security of transaction, speed of transaction, to anywhere, to anyone, all that. Without asking our computers to just guess blindly at things?

Can computers do anything more useful? Or can they only manufacture greed and heat?

You know what i mean?

Hello.

I've been paying a lot of attention to bitcoin and crypto for several weeks with mostly intense effort. (like most, I've known ABOUT it since the early days of silk road, but never paid much attention other than that.) I've absorbed a lot of information on almost every facet of the cryptoverse, and now feel semi confident on the topic of many altcoins, and bitcoin, and also now have a modest bittrex portfolio to compliment my newfound knowledge.

However, I still have some significant gray areas in my learning, part of the purpose of this thread is to raise some not-so superficial questions regarding the bitcion mining system, specifically pertaining to the proof-of-work and mining rewards concepts.

Beyond that, I have some "deep thoughts" about the way things maybe could or should be different, and I'd like to to hear what others might have to add or say about that.

Let me start with what I think I know.

The reward for signing a block is 12.5 BTC.
only one person gets the reward.

Now, as far as I've learned, completing a block ammounts to guessing a single string that, when appended to a completed block hash, hashes down to the "answer" known by the network.

So everyone is collectively spending over $1,000,000 USD per day to run GPUs that are essentially guessing at this string.

and then you are telling me that just ONE person gets the WHOLE reward?
Either i am wrong somewhere or this is in fact the case.
I'm kind of unsure.

presuming I'm correct on this picture.
1. how are mining companies able to produce evenly distributed contracts if potentially they won't keep getting "lucky" enough to get the rewards?

2. what other rewards are there, like transaction fees? How much do miners get? how do they get them, and how distributed are they?

3. Is it possible to run a successful cloud mining company just off the transaction fee rewards? Or will you tank if you never get a signed block reward?

4. Could any PC anywhere suddenly, and very very luckily just guess the right string out of nowhere and get 12.5 btc? AKA could i mine 12.5 BTC with an apple II by hitting the jackpot?

This brings me to the philosophical discussion. Shouldn't the reward be somewhat distributed? Can't there be some sort of "cooperative proof of work" where the "puzzle" is somehow actually "worked" on instead of just guessed at and the amount of contribution each miner put towards it can be measured, so they get a proportional reward? That way one lucky guesser doesn't get all the bank while all the other miners are left out in the cold?

What would a system like this look like? How would it be implemented?
I am a former class of 2009 computer science major from RPI, and I'd be interested in working with some one or some people on implementing some crypto solutions that involve cooperative work methods rather than competitive as there is in BTC and LTC. (ETH going proof of stake) ifyou don't want to just blurt out your thoughts on this i'd welcome private conversations through PM, my email cryptomancer16@gmail.com, or my blog https://cryptomancerblog.wordpress.com

would this be better, worse, why?

Let's start with a few small facts.
I live in the usa.
I am a US citizen, natural born.
I am homeless.
I lost my id (as in, literally misplaced it) and don't plan on getting it back any time soon. I don't have a bank account.

I do have btc. I got 36$ worth by buying a 50$ visa gift card at CVS and then selling it for btc on paxful.

This is the only way that I have come up with for me to get btc. I will repeat this purchase a few more times probably once I get enough change outside of 7 Eleven.

That's not important though. What is important is how do I get my coin out of paxful and into an exchange system where I can convert between coins for the least amount of fees possible.

Also what advice is there regarding trading with small sums? Would bots help?

The bottom line is this. Paxful takes over $3.20 for a coin transaction. Out of 36 this is a lot. I need to move it all at once to a platform I can use to do as much as possible with. So that way I only incur this ludicrous fee one time and can stabilize at $32. The question is what platform and why? Remember I don't have my id so don't say poloniex or anyone who has rigorous verification methods like that. I'm thinking kraken might be good. Am I wrong? I've gotten through registration there but I'm still afraid of fees. I've seem things such as .26% on kraken, now is that .0026 of the transaction or .0026 coin or? Thanks for any advice or tips on trading with small amounts.

-The Cryptomancer