What does mining do?

[Gamesfreak13563]

Why do we mine for bitcoins, anyway? I understand it has something to do with the transactions, but I'm not entirely sure -what- it does.

[Blazr]

It secures the Blockchain and helps make transactions permanent and non-reversible.

It also protects against double-spends.

It's also a good way of distributing the currency fairly.

[Gamesfreak13563]

It secures the Blockchain and helps make transactions permanent and non-reversible.

It also protects against double-spends.

It's also a good way of distributing the currency fairly.

So it would be possible to double-spend your coins without the mining?
It's a form of encryption, then?

[Blazr]

So it would be possible to double-spend your coins without the mining?
It's a form of encryption, then?

Of course. Because without mining there would be no blocks generated, hence transactions would have 0 confirmations. It would be extremely easy to double spend.

It's not a form of encryption. Basically the computer tries to solve a mathematical puzzle, it needs to do a lot of work in order to do this. When it solves it, it broadcasts proof that it solved the puzzle to every PC on the Bitcoin network, hence proof that it did the work.

[antimattercrusader]

Two questions: Once all the Bitcoins are mined, I"m guessing miners will be rewarded via transaction fees?

Next: Are you the girl in the photo? Because you should be. Girls into bitcoin, hot stuff.

[Blazr]

Two questions: Once all the Bitcoins are mined, I"m guessing miners will be rewarded via transaction fees?

Yep, that's the plan, however, all the Bitcoins won't be mined for over a 100 years.

Next: Are you the girl in the photo? Because you should be. Girls into bitcoin, hot stuff.

Yes I am

[antimattercrusader]

Nice & Niiiccccceeeeeeee

[Heathrow]

It's also a good way of distributing the currency fairly.

O RLY?  That's something that's easily debatable.  If by "fair" distribution of currency you mean something like "distribution of currency to early adopters and serious tech heads with tons of awesome expensive tech gear", then ok.  But that's not what most people would mean by the English word "fair".

[lassdas]

If by "fair" distribution of currency you mean something like "distribution of currency to early adopters and serious tech heads with tons of awesome expensive tech gear", then ok. 

Not sure what Blazr means by "fair",
but in my humble opinion it's pretty "fair" to distribute the currency to those people that keep the system working.
Miners make the system work, without miners, there wouldn't be a system.

What could be more "fair"?

[Deafboy]

antimattercrusader, sorry to ruin your excitement.
https://encyclopediadramatica.se/Boxxy

edit:
Unless Blazr is Boxxy... That would be cool!

[snaxion]

Early adopters of Apple stock are doing quite well. Seems fair to me.

[420]

Two questions: Once all the Bitcoins are mined, I"m guessing miners will be rewarded via transaction fees?

Yep, that's the plan, however, all the Bitcoins won't be mined for over a 100 years.

Next: Are you the girl in the photo? Because you should be. Girls into bitcoin, hot stuff.

Yes I am

you turn me on so much; you're the hottest girl on here Blazr

[Heathrow]

Early adopters of Apple stock are doing quite well. Seems fair to me.

The earliest adopters of Apple stock picked it up at Apple's IPO.  And that was perfectly fair.  Not quite so early adopters bought it on the stock market.  Also perfectly fair.  So I suppose we agree.

If you want to argue that that IPO's are analogous to the early BitCoin farming days, you're going to find yourself shit out of luck.  If you want to argue that what follows an IPO is analogous to later BitCoin farming days, you'll also find yourself shit out of luck.  In short, you're shit out of luck friend.  Don't bring shit arguments from analogy, which are almost always shit arguments.  I hope you weren't trying to bring shit arguments.  I'll assume you weren't.

[lassdas]

If you want to argue ...

The point is, that all those early-adopters-got-rich-and-i-dont-that's-not-fair-whining argues that early adopters made a shitload of money because they were mining early.
That argument is false.

IF (and that's a big IF) early adopters made a shitload of money, it had nothing todo with mining, it had todo with keeping the coins, or hoarding as people like to call it.
You fail in your arguments by assuming that it was easier AND more (or as) profitable as it is today, which is untrue.

As an early adopter you might have been able to solve 2Blocks a day, giving you 100BTC, but with a price of 0.01cent per coin, that would've been just $1 a day (not counting power used).
Today you might no longer be able to solve 2Blocks  and 100BTC a day on your own, but even at a mere 0.025BTC per day and a price of $40 you'd still make the same $1 a day.
Where's the advantage of the early adopter here?

An early adopter could have made as much money (or even more) by just buying the coins when it was around 0.01cent,
you'd probably still say that'd be "unfair", although it has nothing todo with the initial distribution.

[Premium]

I think it just decryptes stuff

[Heathrow]

You fail in your arguments by assuming that it was easier AND more (or as) profitable as it is today, which is untrue.

It was easier for people to mine BitCoins in the past.  If you don't believe this, you are a fucking moron.  Mining BitCoins is soon becoming the province of people with very expensive mining-devoted rigs.  In the future, you will have to be rich to mine BitCoins profitably.  A lot of folks would think you're a stupid moron if you call that "fair".  I'm one of them, but I'm not going to argue over the definition of "fair" with an idjit who can't think clearly.

The rich get richer and richer in our (I'm in the US) current economic/govermental system.  This leads to radically unequal income distributions.  Some folks, who are quite reasonable, would say the system is not fair.  It rewards the rich, and allows them to become even richer, while the poor are all screwed.  The poor are also all screwed out of BitCoin mining.  That's the province of the rich (or soon will be).

But maybe you're some kind of stupid Randian wannabe capitalist conservative nutjob who listens to Rush Limbaugh.  In your response, maybe you'll quote from _The Fountainhead_ or try to take over the golden microphone. 

[lassdas]

It was easier for people to mine BitCoins in the past.  If you don't believe this, you are a fucking moron.  

You didn't get it.
Of course it was easier, but the price per coin was also lower, so it wasn't more profitable to mine back then.
You were able to get 2pizzas for 10000BTC back then and it took a while to mine those 10000BTC.
If you mine for a while now, you'd still be able to get 2pizzas, so there's no big difference in profitability.

And for the "very expensive mining-devoted rigs", a Jalapeno is way cheaper than a good mining-GPU, so it doesn't really get more expensive to start mining.

So, what was your point again?

[Heathrow]

You didn't get it.  Of course it was easier, but the price per coin was also lower, so it wasn't more profitable to mine back then.

This is confused.  It might not have been more profitable a past moment t to mine at moment t.  But it was still more profitable (all things considered) to mine at t.  Suppose there is a penny stock that shoots up to a stable and reasonably valued $100/share.  It's more profitable to buy the stock when it's a penny stock than it is to buy it at $80/share.  That you couldn't buy too much with a share of the penny stock when it was $0.01/share is irrelevant.

And for the "very expensive mining-devoted rigs", a Jalapeno is way cheaper than a good mining-GPU, so it doesn't really get more expensive to start mining.

It's very inexpensive to start mining.  In fact, it's close to free if you already own a computer and mine while you're using your computer for other purposes.  If you mine with your laptop while you wouldn't otherwise be using it, your cost to start mining is your electricity cost and the depreciation of your hardware.

Whether or not it is profitable to mind on a laptop now, of course, depends upon how high the value of BTC goes.  If it skyrockets, I suppose laptop mining now could be profitable.  Of course, mining with a $30,000 machine will be immensely MORE profitable in that scenario.  In that scenario, the rich early adopters of $30,000 rigs will become vastly more wealthy than everyone who can't afford the $30,000 rig.  I take it that, to some extent, LiteCoin has done a better job here.
   

[iwilcox]

Whether or not it is profitable to mind on a laptop now, of course, depends upon how high the value of BTC goes.  If it skyrockets, I suppose laptop mining now could be profitable.

This is confused.  Even if BTC became worth more later, you'd be better off changing your fiat into BTC than mining at a loss now.

Of course, mining with a $30,000 machine will be immensely MORE profitable in that scenario.  In that scenario, the rich early adopters of $30,000 rigs will become vastly more wealthy than everyone who can't afford the $30,000 rig.

In general, to make worthwhile income as a miner, your kit needs to be faster than everyone else's.  It's all relative.

I take it that, to some extent, LiteCoin has done a better job here.

It didn't really work.  There's basically no proof-of-work that you can't design specialised hardware for that beats the crap out of CPU miners.  All relative, remember!

[Heathrow]

This is confused.  Even if BTC became worth more later, you'd be better off changing your fiat into BTC than mining at a loss now.

Not everybody mines at a loss, mook.  A lot of folks with "free" electric don't mine at a loss.  You need to think harder and qualify your claims better.