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Author Topic: Bitcoins.lc What is it?  (Read 737 times)
DroppedM
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June 12, 2011, 05:05:20 AM
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Solving blocks & recieiving free Bitcoins? 
Making "workers" & mining?
Downloading mining programs?

what is all of this?  Any help would be great.

Thanks.
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June 12, 2011, 05:32:08 AM
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Well, I am looking to increase my post count. (The following might have some misunderstandings in it, but should give you the right idea.)

Mining is the process that creates new Bitcoins. I should really read up on the details, but there's a hash function that gets applied to a block (of transactions) to produce a number. Hashes take a bunch of data, or a long number, however you want to think about it, and reduce that to a fixed-length number.

In order for a block to be accepted, the hash produced has to be below a certain threshold, so there's some data that gets fiddled until the hash is a small enough number. This is a brute force operation that requires lots of tries. Graphics cards are especially good at that kind of thing. When you "solve" a block by getting the right hash, the first transaction in the block is 50 new Bitcoins that now belong to you.

Now, everyone on the entire Bitcoin network is competing for the same block at any given time. Because there's so much computing power on the network, chances of you being the first person to happen to get a valid hash is very low. Enter mining pools. When a mining pool solves a hash, the created Bitcoins are distributed among members of the pool based on how much computing power they contributed. A decent-sized pool will solve a good portion of the blocks, so members get a steady stream of smaller quantities of Bitcoins.

You need one worker per graphics card you apply to a pool. It's just a username and password that you use when pointing your mining program at whatever pool's address.
CoinCidental
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July 19, 2012, 01:12:16 AM
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Solving blocks & recieiving free Bitcoins? 
Making "workers" & mining?
Downloading mining programs?

what is all of this?  Any help would be great.

Thanks.


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fsk141
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July 19, 2012, 02:20:40 AM
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It's the amazing world of BTC; it's like a digital currency playground with no limits!
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July 19, 2012, 04:11:05 PM
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Well, I am looking to increase my post count. (The following might have some misunderstandings in it, but should give you the right idea.)

Mining is the process that creates new Bitcoins. I should really read up on the details, but there's a hash function that gets applied to a block (of transactions) to produce a number. Hashes take a bunch of data, or a long number, however you want to think about it, and reduce that to a fixed-length number.

In order for a block to be accepted, the hash produced has to be below a certain threshold, so there's some data that gets fiddled until the hash is a small enough number. This is a brute force operation that requires lots of tries. Graphics cards are especially good at that kind of thing. When you "solve" a block by getting the right hash, the first transaction in the block is 50 new Bitcoins that now belong to you.

Now, everyone on the entire Bitcoin network is competing for the same block at any given time. Because there's so much computing power on the network, chances of you being the first person to happen to get a valid hash is very low. Enter mining pools. When a mining pool solves a hash, the created Bitcoins are distributed among members of the pool based on how much computing power they contributed. A decent-sized pool will solve a good portion of the blocks, so members get a steady stream of smaller quantities of Bitcoins.

You need one worker per graphics card you apply to a pool. It's just a username and password that you use when pointing your mining program at whatever pool's address.
Is it an integral property of these blocks that brute-force is the accepted and preferred method? The intricacies of mining are a little over my head what with how little research I've done, but I would think that there ought to be a more efficient manner than brute-forcing, such as an algorithmic approach. Would such an approach inevitably introduce issues that brute-forcing wouldn't?
DeathAndTaxes
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July 19, 2012, 04:16:39 PM
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Is it an integral property of these blocks that brute-force is the accepted and preferred method? The intricacies of mining are a little over my head what with how little research I've done, but I would think that there ought to be a more efficient manner than brute-forcing, such as an algorithmic approach. Would such an approach inevitably introduce issues that brute-forcing wouldn't?

Yes.  I recommend you read Satoshi white paper but blocks are SUPPOSE TO BE HARD.  They are a "proof of work".  If the work is easy/trivial then it isn't a proof of much is it.  The blocks prevent double spending coins.  Making the blocks difficult to produce means an attacker needs more computational power than all "the good guys" combined.  The economics of mining mean that even if an attacker had that much computing power it would be more profitable to "do the right thing".

Obviously you could make producing blocks "easier" but the system would be easier to attack.   Locating a solution by brute force has two major advantages.  Solutions are found random.  This prevents large miners from locking out smaller miners.  If blocks were found in a deterministic manner then larger/faster miners would always win.  Essentially the miner equivelent of a central bank.  The second major advantage is that FINDING A SOLUTION is difficult but VERIFYING A SOLUTION is trivial.  This means once a solution is found the rest of the network can verify it in a fraction of a second.

I strongly strongly strongly recommend everyone interested in the technical aspects of Bitcoin to read Satoshi paper.  Once you read it (and read it again) you start to realize the elegance of the system.  It is at the high level very simple and yet very robust. 
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