totally_noob requiring help :(

[totally_rad]

Hey guys. Sup?
I am totally new to the bitcoin world (2 days), I actually pretty much get everything till now but there is that thing I don't seem to be able to find anything on...
When you mine coins, what is it that you actually do? What is the data that you process? Who gives them to you? And finally how do they make profit out of it?

P.S. I got a Dell l702x with a geforce 555 m 3gb and an i7-2670qm... will it do anything worthy?

Thanks in advance....

[Statesman]

I'm also relatively new to Bitcoin, but my advice to you on learning about bitcoin and the mining portion would be to find Satoshi's PDF file on Bitcoin. I have it on my HDD, but I've forgotten where I downloaded it from.

That being said, the nVidia architecture is pretty useless compared to ATI cards. I forget the specifics, but it has something to do with the core designs. ATI uses basic, but more ALU (Arithmetic Logic Units), whereas nVidia uses more complicated CUDA cores, which are "better" for gaming, but not so great at the repetitive, mass information processing of BTC/LTC mining.

That's a simple explanation from someone who is also new, so take it with a grain of salt. If you're lucky, some super-user will drop their knowledge on us.

[beekeeper]

Hey guys. Sup?
I am totally new to the bitcoin world (2 days), I actually pretty much get everything till now but there is that thing I don't seem to be able to find anything on...
When you mine coins, what is it that you actually do? What is the data that you process? Who gives them to you?

You attempt to find a  number which added to last transactions string and then hashed with sha256
will result in a number of 0. Its a computr power consuming job and it is constantly adjusted by the network to take a certain amount of time. When a block is solved, the one who solved gets 50 btc which are created from void by network agreement.

[CIYAM]

When you mine coins, what is it that you actually do? What is the data that you process? Who gives them to you? And finally how do they make profit out of it?

It depends upon whether you are mining solo or for a pool (and without extremely good hardware there is no point in mining solo) - but basically the main thing you are doing is trying to find a "random" number when hashed using SHA256 along with other data will produce a hash with a large enough number of leading 0s (according to the current "difficulty").

If you solve the problem (i.e. find a "correct" random number) and your work is able to be included in the "next block" then you will be sent 50 BTC (if solo) or a proportion of that amount (if in a pool). Also note that the 50 BTC reward drops by half every 4 years (and will do so soon).

To finally make a profit (in a fiat currency at least) you would have to sell your mined bitcoins to someone else.

P.S. I got a Dell l702x with a geforce 555 m 3gb and an i7-2670qm... will it do anything worthy?

As the other poster stated this hardware (and it's really only the graphics card that matters) will not do so well (so don't even attempt solo mining with it as you will just be wasting a lot of electricity for no reward).

[Stephen Gornick]

P.S. I got a Dell l702x with a geforce 555 m 3gb and an i7-2670qm... will it do anything worthy?

That card is weak sauce, sorry.

GPU mining is just about at the end of its run anyway, so it probably wouldn't be worth your effort even if it was a halfway decent bit of mining hardware like a $100 AMD 58xx card.

[totally_rad]

Thank you all guys for your replies...

It depends upon whether you are mining solo or for a pool (and without extremely good hardware there is no point in mining solo) - but basically the main thing you are doing is trying to find a "random" number when hashed using SHA256 along with other data will produce a hash with a large enough number of leading 0s (according to the current "difficulty").

If you solve the problem (i.e. find a "correct" random number) and your work is able to be included in the "next block"

You attempt to find a  number which added to last transactions string and then hashed with sha256
will result in a number of 0. Its a computr power consuming job and it is constantly adjusted by the network to take a certain amount of time. When a block is solved, the one who solved gets 50 btc which are created from void by network agreement.

Know I am even more confused... So the thing I'll do is just try and find numbers, that are generated by a program, for no actual reason? What's the point of it? There is no one behind that? No big man making profit from me? If that's the case how can BTCs actually have any value?

[nobbynobbynoob]

Thank you all guys for your replies...

Know I am even more confused... So the thing I'll do is just try and find numbers, that are generated by a program, for no actual reason? What's the point of it? There is no one behind that? No big man making profit from me? If that's the case how can BTCs actually have any value?

I'm a n00b too so bear with me but I think these calculations serve to verify the validity of transactions in the block.

[Gabi]

Go read the wiki and read some guides.

Mining is not a get rich quick scheme. And anyway with your gpu you would not become rich. And as other said, gpu mining is finally coming to an end when ASIC comes out.

Yes, there is no one behind bitcoin. No company. No president. No one. And yes it have value. Why? Well, your precious dollars have value and they are just printed paper wich banks keep printing at will. Why bitcoin should not have value? Especially given the fact that the total bitcoin number is limited and there is no one that can print trillions of them on a whim!

Mining serves to secure the network and the transactions, while rewarding the miners

I think these calculations serve to verify the validity of transactions in the block.

Nah, verifying if a transaction is valid or not is very easy, every bitcoin client does that.

Mining find blocks. Yes, it find a right number wich respect some requirements (difficulty and blablabla) wich is used to create a block.

[DannyHamilton]

So the thing I'll do is just try and find numbers, that are generated by a program, for no actual reason? What's the point of it?

It's not "for no actual reason".  There is a very important reason for this effort.  It is called "proof of work" and it ensures that transactions are not removed/modified after they are complete.  The effort of the miners is a service to the entire network.  To encourage people to participate in this effort the protocol is designed to reward those who choose to be miners.  Every time a new block is added to the blockchain, a reward is created that assigns a predetermined amount of BTC to the miner.

There is no one behind that?

There is a protocol behind it.  An agreed to set of rules that are unable to be changed unless a significant number of participants all agree to the change.

No big man making profit from me?

No.

If that's the case how can BTCs actually have any value?

The value is in the usability.  People desire to have them for their usability, since you have them and someone else wants them, they are willing to pay for them. Therefore the desire translates to a value.

If you are mining gold out of the ground, who is the "big man making a profit from you".  You dig up some gold.  Other people want the gold for its usability. They give you something that you value (maybe USD ?) in exchange for the gold that you dug up.

Note: mining BTC does require certain resources (electricity, computer equipment, etc).  So the providers of those resources are certainly making a profit off of you.

[totally_rad]

I think I basically got it. thank you all

[jord4n]

What is this ?