[1050 TH] BitMinter.com [1% PPLNS,Pays TxFees +MergedMining,Stratum,GBT,vardiff]

[christhegoth]

ChrisThe Goth:

I think what is confusing you is the crypto-currency label.

the crypto does not mean encryption. Encryption is to hide something in an unbreakable way.

The crypto refers to the other part of RSA is signing. Signing allows you to prove that a message was originated by a particular user/computer etc.
The message is not hidden. It simply list's the address (public key) that can be used to verify the message, the message exactly as it was signed (by the private key), and the hash sum
afterwards is the signature. That is why it is called key-pair. Private key you keep hidden and public key you make available.
The normal message in what mining is doing are transactions and parts of the block chain.

You can not change any part of the message as the hash will no longer verify. Even adding a single space or changing a lowercase letter to capital letter
will cause the hash verify to fail.

That is what the crypto is used for. To prove that the block chain is exactly the way it was when a particular block was created.

This way no trust is needed. Every transaction can be proven and verified.

When you buy something at sears and pay for it with cash. The only proof you have is the receipt and you have to trust sears to verify that the receipt is real.
They can always claim that you faked it and there is nothing you can do to prove them wrong.

If you use bitcoin and as long as the transaction is confirmed you can prove to anyone in the world that you paid them as long as you still control the sending address.
you can sign a message to prove the address is yours etc. No trust needed. It is mathematically provable.

So you're saying it's a tracking system for data packets that are themselves unencrypted. The reliability comes from purely the number of 'people' tracking ( confirmations ).

Which makes it a voucher system. A voucher system where said vouchers can be exchanged for cash.

Which means the 'reserve' is peer-to-peer, rather than centralised.

Yeah, that bit did confuse me. I don't get how new coins are created, unless it's built into the equation.

I get that the blockchain is important, but that's why you have 2 styles of wallet ( qt that downloads a copy, & others that read the blockchain off of a remote host ).

In any currency system there must be control of what exists, or you get hyper-inflation & mass counterfeiting.

The 'new coin' bit is where I am falling down.

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[DrHaribo]

Yeah, that bit did confuse me. I don't get how new coins are created, unless it's built into the equation.

The rules allow each block to include one transaction that creates new coins out of thin air. The amount is 25 BTC. It used to be 50 BTC but it is reduced with every reward halving, which happens every 210 000 blocks. This is why finding a block is so valuable. The income from transaction fees is tiny compared to the new 25 BTC you are allowed to create if you get a block.

New money has to come from somewhere. New US Dollars are created out of thin air (and sometimes small pieces of paper) by the Federal Reserve. And through fractional reserve banking. New bitcoins are created out of thin air (and electricity) by anyone who is mining.

How long until the next reward halving (aka doomsday) ? http://bitcoinclock.com/

[christhegoth]

Yeah, that bit did confuse me. I don't get how new coins are created, unless it's built into the equation.

The rules allow each block to include one transaction that creates new coins out of thin air. The amount is 25 BTC. It used to be 50 BTC but it is reduced with every reward halving, which happens every 210 000 blocks. This is why finding a block is so valuable. The income from transaction fees is tiny compared to the new 25 BTC you are allowed to create if you get a block.

New money has to come from somewhere. New US Dollars are created out of thin air (and sometimes small pieces of paper) by the Federal Reserve. And through fractional reserve banking. New bitcoins are created out of thin air (and electricity) by anyone who is mining.

How long until the next reward halving (aka doomsday) ? http://bitcoinclock.com/

Yeah, it's built into the equation.

They're relying on demand picking up, thus increasing the 'transaction fee' kitty ( currently ickle ) to cover the loss of new BTC as the doomsday thing happens.

But then us more experienced miners can always shift to a newer product ( a scrypt for example ) should the need arise.  As scrypt hardware gets more done to it it should be saner in prices in the end.  Like what happened to SHA-256 stuff.  And the price of BTC can also respond if supply dries up a bit.  My fortnightly cash-in yesterday went rather well due to a generous German for example.

The eMark is interesting. As is the Auroracoin.  Wonder what else will show up.

[christhegoth]

ChrisThe Goth:

I think what is confusing you is the crypto-currency label.

the crypto does not mean encryption. Encryption is to hide something in an unbreakable way.

The crypto refers to the other part of RSA is signing. Signing allows you to prove that a message was originated by a particular user/computer etc.
The message is not hidden. It simply list's the address (public key) that can be used to verify the message, the message exactly as it was signed (by the private key), and the hash sum
afterwards is the signature. That is why it is called key-pair. Private key you keep hidden and public key you make available.
The normal message in what mining is doing are transactions and parts of the block chain.

You can not change any part of the message as the hash will no longer verify. Even adding a single space or changing a lowercase letter to capital letter
will cause the hash verify to fail.

That is what the crypto is used for. To prove that the block chain is exactly the way it was when a particular block was created.

This way no trust is needed. Every transaction can be proven and verified.

When you buy something at sears and pay for it with cash. The only proof you have is the receipt and you have to trust sears to verify that the receipt is real.
They can always claim that you faked it and there is nothing you can do to prove them wrong.

If you use bitcoin and as long as the transaction is confirmed you can prove to anyone in the world that you paid them as long as you still control the sending address.
you can sign a message to prove the address is yours etc. No trust needed. It is mathematically provable.

So you're saying it's a tracking system for data packets that are themselves unencrypted. The reliability comes from purely the number of 'people' tracking ( confirmations ).

Which makes it a voucher system. A voucher system where said vouchers can be exchanged for cash.

Which means the 'reserve' is peer-to-peer, rather than centralised.

Yeah, that bit did confuse me. I don't get how new coins are created, unless it's built into the equation.

I get that the blockchain is important, but that's why you have 2 styles of wallet ( qt that downloads a copy, & others that read the blockchain off of a remote host ).

In any currency system there must be control of what exists, or you get hyper-inflation & mass counterfeiting.

The 'new coin' bit is where I am falling down.

Although, even though the 'reserve' is peer-to-peer, the big producers ( who will be selling some BTC obviously ) could start to accrue large chunks of cash in their accounts.  Or even gold being honest about it.

Being paid to crunch numbers.  As I described originally.

Looks like I didn't get Satoshi's equation.  Which doesn't surprise me as I can't fit a multimeter to it.  The rest is true though.  Someone with a ton of mining kit, in theory, could accrue a pile of gold enough to be thought of as a bank in their own right.  Like with the Bank of England once you have a huge pile of gold you can do stuff.   Like issue more BTC for example.


By the way, only part of a currency is made up out of thin air.  The term is called leveraging.  If a bank holds £100 in gold it's allowed to lend out £500 if the leveraging factor is set at 5.   Govt's control the leveraging factor.

The American Sub-prime mortgage debacle, that crashed the World Banking system ( Lehman Bro's dying; Lloyds & RBS needing bail-outs ), was due to too much being lent out with not enough precious items being held in reserve to guarantee that lending.  A £5 note is worthless if there is no gold behind it for example.

With no guarantees it collapsed, as people realised the IOU's ( the sub-prime mortgages ) were not worth a penny; wiping out several banks and stock exchanges.


The equation controls the amount of coin out there.  That's clever I have to say.  No need for a central authority if it's all built in.

[hayseed]

ChrisThe Goth:

I think what is confusing you is the crypto-currency label.

the crypto does not mean encryption. Encryption is to hide something in an unbreakable way.

The crypto refers to the other part of RSA is signing. Signing allows you to prove that a message was originated by a particular user/computer etc.
The message is not hidden. It simply list's the address (public key) that can be used to verify the message, the message exactly as it was signed (by the private key), and the hash sum
afterwards is the signature. That is why it is called key-pair. Private key you keep hidden and public key you make available.
The normal message in what mining is doing are transactions and parts of the block chain.

You can not change any part of the message as the hash will no longer verify. Even adding a single space or changing a lowercase letter to capital letter
will cause the hash verify to fail.

That is what the crypto is used for. To prove that the block chain is exactly the way it was when a particular block was created.

This way no trust is needed. Every transaction can be proven and verified.

When you buy something at sears and pay for it with cash. The only proof you have is the receipt and you have to trust sears to verify that the receipt is real.
They can always claim that you faked it and there is nothing you can do to prove them wrong.

If you use bitcoin and as long as the transaction is confirmed you can prove to anyone in the world that you paid them as long as you still control the sending address.
you can sign a message to prove the address is yours etc. No trust needed. It is mathematically provable.

So you're saying it's a tracking system for data packets that are themselves unencrypted. The reliability comes from purely the number of 'people' tracking ( confirmations ).

Which makes it a voucher system. A voucher system where said vouchers can be exchanged for cash.

Which means the 'reserve' is peer-to-peer, rather than centralised.

Yeah, that bit did confuse me. I don't get how new coins are created, unless it's built into the equation.

I get that the blockchain is important, but that's why you have 2 styles of wallet ( qt that downloads a copy, & others that read the blockchain off of a remote host ).

In any currency system there must be control of what exists, or you get hyper-inflation & mass counterfeiting.

The 'new coin' bit is where I am falling down.

I like to think of it as a world wide network of archivists or scribes that record transactions in the network and
also verify that what others have recorded is correct and provable.  On the block chain, the "confirmations" is a
count of how many scribes "confirm" that the recorded transaction is correct. As the Doc said, the coins are a reward
for doing this scribe work and are built into the software/rules. At some point, only the transaction fee's will be the reward.
This reward help ensure that there is competition for confirming work "blocks" thus creating the growing network and making
 it decentralized. The end result is word wide financial archive that anyone can examine without trust or permission needed.

Think of older market registers that had a "journal" tape where you could scroll back through the journal to see the transactions.
You didn't need a password, just pull out the roll and look back.

Can you imagine calling American Express or one of the big banks and demanding to see their ledgers of transactions.
There is no need to call anyone for bit coin, just start exploring.

Look at the fight going on between credit card companies and Russia. Where the US has asked them (CC comps) to hold Russia
finance hostage to their demands by withdrawing services. In bitcoin this is near impossible to do unless you cut the internet
links to that country. And even then, they can always create their own.

[DrHaribo]

Like with the Bank of England once you have a huge pile of gold you can do stuff.

Central banks don't need gold or anything else to create money. When bank A wants to borrow 1 trillion pounds from the central bank, some banker at the central bank clicks the "OK" button with his mouse, and voila, 1 trillion pounds have been created.

By the way, only part of a currency is made up out of thin air.  The term is called leveraging.  If a bank holds £100 in gold it's allowed to lend out £500 if the leveraging factor is set at 5.   Govt's control the leveraging factor.

All the money is created out of thin air. But only some of it by the central bank. Most is created by the regular banks through the use of fractional reserve. Why do they keep going bankrupt if they have a license to create money out of thin air? Obviously some bankers are so incompetent they should be in an institution.

A £5 note is worthless if there is no gold behind it for example.

Quoting Wikipedia: "At various times, the pound sterling was commodity money or bank notes backed by silver or gold, but it is currently fiat money, backed only by the economy in the areas where it is accepted."

As long as there are people who will give you goods and services for British pounds, it has value. Same as Bitcoin.

Gold may still affect the value of fiat currencies in the long run. Currently the Chinese are hoarding more and more gold. Meanwhile the Americans claim they have plenty of gold. But they keep it in a secret box and noone is allowed to look. Most likely this means most of their gold is gone (sold). Fort Knox is like Mt.Gox. The ledger claims there is lots of gold. But if you looked inside you'd be in for a shock. Does this mean the US Dollar will go down the toilet, and the Chinese Yuan will take over as world reserve currency? There's no sign of this so far - noone seems to care.

[DrHaribo]

We're going to need a few more likes on Facebook to reach 4000. https://www.facebook.com/BitMinter

Hint, hint! 

[jjdub7]

A £5 note is worthless if there is no gold behind it for example.

With no guarantees it collapsed, as people realised the IOU's ( the sub-prime mortgages ) were not worth a penny; wiping out several banks and stock exchanges.

The equation controls the amount of coin out there.  That's clever I have to say.  No need for a central authority if it's all built in.

The general concept is right, but when the govt repealed the gold standard, its no longer backed by gold (implicitly).  What it is backed by is its ability to pay taxes, and the government's subsequent ability to enforce the law.

[philipma1957]

A £5 note is worthless if there is no gold behind it for example.

With no guarantees it collapsed, as people realised the IOU's ( the sub-prime mortgages ) were not worth a penny; wiping out several banks and stock exchanges.

The equation controls the amount of coin out there.  That's clever I have to say.  No need for a central authority if it's all built in.

The general concept is right, but when the govt repealed the gold standard, its no longer backed by gold (implicitly).  What it is backed by is its ability to pay taxes, and the government's subsequent ability to enforce the law.

guys with guns. that say they are the law.  now some countries are worse then others but it boils down to the ability to hurt you if you don't pay the tax man.

[christhegoth]

A £5 note is worthless if there is no gold behind it for example.

With no guarantees it collapsed, as people realised the IOU's ( the sub-prime mortgages ) were not worth a penny; wiping out several banks and stock exchanges.

The equation controls the amount of coin out there.  That's clever I have to say.  No need for a central authority if it's all built in.

The general concept is right, but when the govt repealed the gold standard, its no longer backed by gold (implicitly).  What it is backed by is its ability to pay taxes, and the government's subsequent ability to enforce the law.

guys with guns. that say they are the law.  now some countries are worse then others but it boils down to the ability to hurt you if you don't pay the tax man.

Having slept on it:

Bitcoin will become a cheap voucher system for sending International Payments at least. If one Govt officially adopts it then we'll be in a good place.

But...

Unless we have a considerable step forward in affordable mining gear by 2016 ( Doomsday ) Bitcoin will be killed by it's own equation. Uptake is slow, so I'm not convinced transaction fee payments will be enough to cover the drop unless some damn nice & affordable Mining kit has shown up.

The Bitcoin Gods need to watch this.

Coins to watch are still Namecoin, Auroracoin, the Deutsch eMark, & Dark Coin. Bitcoin is important ( obviously ); but the design has a flaw, in that it may have been too confident on uptake.

*sacrifices a chicken to the Bitcoin Gods*.


PS: For those who don't understand the Treasure Hoard thing look up Jacob Rothschild and how many Banks ( not shares, actual Banks ) he owns. This is why crypto-coins are so important. To break this monopoly. 1 family with all that power is just asking for trouble.

[DrHaribo]

I was just calling it doomsday as a joke. The reward halving from 50 to 25 BTC went just fine.

Reward halving is one of the best features of bitcoin, not a flaw at all.

Most alt coins are completely and utterly useless. Be careful.

[christhegoth]

I was just calling it doomsday as a joke. The reward halving from 50 to 25 BTC went just fine.

Reward halving is one of the best features of bitcoin, not a flaw at all.

Most alt coins are completely and utterly useless. Be careful.

They've got 2 years to crack this power to hash issue, so hopefully all will be well.

[Ososober]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

[DrHaribo]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

Welcome to Bitcoin mining

Note that CPU and GPU use more in electricity than what you earn. When buying ASIC devices make sure you compare the price per GH/s - it can vary greatly.

[christhegoth]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

W3rd. USB is fun but is VERY low earning unless you can bring in about 100 GH/s in my opinion. What toys have you bought?

I ask as I'll never break even on my first USB venture, so you do need to be careful here.

[Ososober]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

W3rd. USB is fun but is VERY low earning unless you can bring in about 100 GH/s in my opinion. What toys have you bought?

I ask as I'll never break even on my first USB venture, so you do need to be careful here.

2 Drillbit Thumb (Avalon Gen 2) USB Bitcoin miners AU$40 in total

[christhegoth]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

W3rd. USB is fun but is VERY low earning unless you can bring in about 100 GH/s in my opinion. What toys have you bought?

I ask as I'll never break even on my first USB venture, so you do need to be careful here.

2 Drillbit Thumb (Avalon Gen 2) USB Bitcoin miners AU$40 in total

You didn't make the mistake I made then. £270.00 on Antminer u1's ( 6 of ) as the math added up.  Then, 2 weeks later the market shifted.  I might make my cash back in 4 years.  Might...

Those drillbits will be good for educational purposes.

If you decide to take the plunge and mine bigger the new cool for 'my first miner' is the Antminer s3.  It has a good power ratio ( just over 1 GH/s per watt used ).

You could buy an old s1 and pencil-mod it if your skills are advanced.  They're pretty cheap now, and learning how to pencil mod and set up an Antminer is good educational stuff.  Just don't spend too much on an s1, as their lifespan is coming to an end now.



For now have a play.  The s3 has literally only just come out.  Get the feel of how it works, read some charts, and have a think about where you want to go.  You may prefer scrypt or x11 for your first miner in the end ( for example ).  Just be careful about other coins.  Bottlecaps and Doges are worthless for example.  Coins with obvious uses are the Bitcoin, DarkCoin, and NameCoin, in my experience.  And the AuroraCoin will be launched in Iceland soon as an actual currency.  The Deutsch eMark is being worked on as well.

But, as the good Doc says, many of these new coins are just fads.  Pool owners looking to make a quick buck, and nothing more.  So tread carefully.  Bitcoin ( with Namecoin on the side ) is a good place to start.

[theweiss]

hi all, just started this week, currently running no extra mining gear, just cpu/gpu, currently at 0.1 gh, ive purchased some mining usb, so hope to increase very soon

W3rd. USB is fun but is VERY low earning unless you can bring in about 100 GH/s in my opinion. What toys have you bought?

I ask as I'll never break even on my first USB venture, so you do need to be careful here.

2 Drillbit Thumb (Avalon Gen 2) USB Bitcoin miners AU$40 in total

Osober,
Welcome to the game. You're lucky to have found Bitminter, the DOC is a superb resource for any questions that you have as are the other members of this forum.  I got into mining a couple months back with some USB ASICS and they were a great place to start.   They won't make you a lot of money but they will let you get your feet wet and see how everything works.  If you eventually decide to move upstream into more advanced hardware be sure to see what people are saying about them on the forums.  Some equipment seems like it will be awesome but doesn't pan out in the end.  The folks on these forums can provide a lot of good advice when it comes to purchases.

[jfederkins]

I stepped away from this thread when all anyone was talking about was "luck".

I come back to see that the current topic is how a block is "made".

I can't wait until we get on an important topic, how much beer I can get with the bitcoin I mine? Now that's an important topic!

[DrHaribo]

I can't wait until we get on an important topic, how much beer I can get with the bitcoin I mine? Now that's an important topic!

Try the bitcoin beer index: http://www.bbeer.org/