what bitcoin resolve??

[KrameX]

Hi, I'm new in this called bitcoin.


Bitcoin... I understand almost everything except one thing.

What is it calculated? Hashes? for what??


For example,  Foding@home calculates protein folding ... SETI@home analyzes data from radio telescopes ... but... What the Bitcoin network resolve?? For what are the results used? to hack cellphones hashes??



or are just a complex mathematical problems  made randomly that are created to have the machins occupied? and the result is for nothing more?


thanks  

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[CaseyHeinzism]

I read somewhere that the bitcoins people earn from mining blocks...
Are to keep making and solving new incrypted puzzles, as well as new bitcoins..
To keep the system safer from hacking.. not sure if that is true..
Please correct me if I understand this wrong.
- Casey

[KrameX]

yeah...

but: what are we mining? what are we solving?


this solutions are useless? (except to BTC generation ) or there are a use for the block that we solved? This solutions are for what? in what will be used?

[Grant]

Mining does what those extremely expensive and power hungry skyscrapers full of staff and computers do at RL banks:

Verify transactions, but in non-centralized and more cost/energy efficient way. And they also collectively do what the FED does, issue new currency.

[Ricochet]

You're not folding proteins or looking for aliens, no.  You're trying to score a winning hash so you can write transactions to the public record. 

You don't have to generate just to use Bitcoins of course, and that's why it was removed from the main client.  You only need to use CPU power if you want to try your hand at solving blocks to strengthen the Bitcoin network.  Just, uh, make sure you use the Bitcoin Difficulty Calculator before thinking of it as a "money for free" thing.

[dabest1]

Hi, I'm new in this called bitcoin.


Bitcoin... I understand almost everything except one thing.

What is it calculated? Hashes? for what??


For example,  Foding@home calculates protein folding ... SETI@home analyzes data from radio telescopes ... but... What the Bitcoin network resolve?? For what are the results used? to hack cellphones hashes??



or are just a complex mathematical problems  made randomly that are created to have the machins occupied? and the result is for nothing more?


thanks  

You could say that the calculations are pretty much done to keep the computers occupied. The results of this calculations cannot be used for anything useful.

Computers race to solve the next hash problem, to show that they have more computing power. As long as 50% or more of the computing power is in the good guys hands, then the bitcoin network is secure. If the bad guys take over, then they could double spend bitcoins or cause other issues.

[KrameX]

So... we are calculating the "holes" in the security of bitcoin to make it more stringer to hackers's intrussions?


or only demostrating who has the bigger dick in the computing world? 

[Ampersand]

Wow, I'm interested to hear more about this. I never really understood what the purpose of mining was, or why miners basically get free money. But it makes sense that miners are using their CPU to protect this fledgling currency's security flaws. Really fascinating.

[frutza]

These complex and difficult calculations are what keeps the block chain secure. In other words, it's what guarantees that bitcoins are not double-spent, transactions cannot be reversed etc. There is no other use, but isn't that enough?

[Ampersand]

So basically, instead of the creator putting tons of money into servers to take care of the security of bitcoin exchanges, the miners are being paid to use their rigs to do that job?

[frutza]

Sort of  But it also eliminates the single point of failure that such a centralized server would be.

[frutza]

Nobody can shut down all the miners and all the users. That's the power of bitcoin!