Anyway, thank you guys for your replies

I don't even understand how regular money works... why does it have value and why does bitcoin have value?

Or how business charge more for the cost to buy something, how does it not end up in debt? When you charge more for the original cost of something. Service, work, knowledge, value. My microencomics class did not help me much, it would seem. (Macro is what I could have used too)

A person slaves away digging a ditch, and someone hands him an address so he can get paid? As opposed to handing him money, or better yet food.

I remember when PayPal was new and I could only spend it at Home Depot using a phone number, I lived on that for a bit buying peanuts and Iced Tea.

Anyway, thanks more reading I must do

Also what happens when quantum computers become common place?

What is this 21 million cap governed by?

They say "solve a math problem" when you look up Bitcoins

example or as an analogy, some says divide add 400 to 300, you could do 400 + 1, 401 + 1, 402 + 1 or 400 + 100 + 100 + 100 or 4 + 3 + four zeros... do you see what I'm asking?

Anyway, part of me is asking this because when I see warehouses filled with computers dedicated to bitcoin mining, I wonder if I even have a chance who does not have access to these number of computers and that much power...

I looked through a sample block

taken from stack overflow:



Here is an extremely simplified sketch of the problem, but it should give a pretty good idea of what the problem is.

The data:

This is the hash of the last block (shortened to 30 characters):

00000000000001adf44c7d69767585

These are the hashes of a few valid transactions waiting for inclusion (shortened).

5572eca4dd4
db7d0c0b845

And this the hash of one special transaction that you just crafted and which gives 25BTC (the current reward) to yourself:

916d849af76

Building the next block:

Now, let's use an gross approximation of what a new block might look like (the real one uses binary format). It contains the hash of the previous block and the hashes of those 3 transactions:

00000000000001adf44c7d69767585--5572eca4dd4-db7d0c0b845-916d849af76--

Now let's do mining by hand! Our goal is to complete this block with a nonce (a piece of garbage) such that the hash of the new block starts with 13 zeros (considering the previous hash, it seems that 13 zeroes is the current difficulty!).

Mining (trying to finalize this block):

Let's try with nonce=1, and compute the hash of the block (I'm using the md5 hash algorithm, but Bitcoin uses double sha256):

> echo "00000000000001adf44c7d69767585--5572eca4dd4-db7d0c0b845-916d849af76--1" | md5sum
8b9b994dcf57f8f90194d82e234b72ac

No luck, the hash does not start with a 0… Let's try with nonce=2

> echo "00000000000001adf44c7d69767585--5572eca4dd4-db7d0c0b845-916d849af76--2" | md5sum
5b7ce5bcc07a2822f227fcae7792fd90

No luck…

…

If we pursue until nonce=16, we get our first leading zero.

> echo "00000000000001adf44c7d69767585--5572eca4dd4-db7d0c0b845-916d849af76--16" | md5sum
03b80c7a34b060b33dd8fbbece79cee3

For nonce=208, we get two leading zeroes!

> echo "00000000000001adf44c7d69767585--5572eca4dd4-db7d0c0b845-916d849af76--208" | md5sum
0055e55df5758517c9bed0981b52ce4a

Continue like this… If you finally find a hash that has 13 leading zeroes… you're a winner! Other miners will now build upon your block, you've just got 25BTC.

But you'll have to be fast!

Back to step 1…

If someone manages to build a block before you do, you'll have to start again from the beginning with the new block's hash (the one of the winner).

Is there only one way to solve hashes for bitcoins or can you come up with better/more effective ways aside from the processing itself eg. number of gates/electricity... ?

I don't know if I can get across what I am asking, can you make a more efficient solution to a mining problem that doesn't require as much processing power?

And then I started to buy old computers and started stringing them up together and they worked together as distributed computing

Powered by the water... what is it 3' head height = 4 to 8 kw? ( not sure )

but what can say a single core, 3GHz pentium 4 or graphics cards...

or should I instead opt for servers racks...

Also how much of this is dependent on the algorithm/software as opposed to the hardware eg. standard vs. quantum, number of gates, cycle, voltage...

yeah it was just a dumb idea anyway thanks for your responses

I had this idea of mobile computers that were basically boxes that had four robotic legs with solar panels on the surface, they walked around and could group up, network, share power, etc... but what were they for? Bitcoin bots? haha

They produce bitcoins, place em on some remote location...

just a random thought, probably idiotic

So I guess I'm okay?

I guess I'll look into bitcoins more thoroughly then, thank you for your responses.

I have read about people buying bitcoins that technically could not / should not have been sold because they were illegally possessed so legally the bitcoins could be taken away from you, despite having paid for them... is that true?

Also out of curiosity, is there any form of money (particularly interested in bitcoins) which are protected from confiscation?

Can you ever be safe with money that is online aside from cash which I'm not a fan of either.

thanks for any help