MINING

[bitcoinART]

i understand gold and silver mining, but bitcoin mining, not so much.  what is the product being produced?  is bitcoin mining a "made up" action to give worth to the process of running a computer efficiently?

im new,,,thanks for your help

[j03]

Think of mining as payment processing in the fiat banking world (that's done by gateways and payment processors). BTC miners process transactions by using specialized hardware/software, use their electricity to do so, and in turn are paid a reward.

[CanOpener]

Help needed! Has anyone used Bitfunder before? i want to get into this mining IPO.

https://bitcointalk.org/index.php?topic=269216.0

[BitCoiner2012]

i understand gold and silver mining, but bitcoin mining, not so much.  what is the product being produced?  is bitcoin mining a "made up" action to give worth to the process of running a computer efficiently?

im new,,,thanks for your help

Mining serves two purposes - one to "mint" or generate a new block of coins every ten minutes (the "mining" doesn't do this, mining the blocks allows the minting to occur) in order to distribute the coin to the network or the "wild". This is a reward for the miner, as he is also securing the network by adding hashpower and seeking coins. Some people do mine only for the purpose of further decentralization and not for profit. The more miners, or hashers, the less likely a 51% attack on the network, so not only does it generate coin, but secures the network in a very important and critical fashion.

If you have any more specific questions, I'd be glad to attempt to answer them or point you to the right resources.

[BitCoiner2012]

Help needed! Has anyone used Bitfunder before? i want to get into this mining IPO.

https://bitcointalk.org/index.php?topic=269216.0

What appears to be the problem?

[bitcoinART]

Think of mining as payment processing in the fiat banking world (that's done by gateways and payment processors). BTC miners process transactions by using specialized hardware/software, use their electricity to do so, and in turn are paid a reward.

Q: does this mean that the person who has the biggest computer will mine the most...who regulates the amount of bitcoins that can be produced?  thanks for your comment,,i appreciate it.

[CanOpener]

I just want to understand whether BitFunder is a legit platform and if there is recourse if dividends don't pay out as promised

[BitCoiner2012]

Think of mining as payment processing in the fiat banking world (that's done by gateways and payment processors). BTC miners process transactions by using specialized hardware/software, use their electricity to do so, and in turn are paid a reward.

Q: does this mean that the person who has the biggest computer will mine the most...who regulates the amount of bitcoins that can be produced?  thanks for your comment,,i appreciate it.

Yes, in a respect the "biggest hasher wins", but that is what pools are for - to combine minor miners who can't solo with larger miners who also can't solo (or can, but choose pool mining).

However, no "one" controls the minting. It is in the protocol. It can't be changed, unless a large consensus is reached by users to switch to a new protocol of sorts.

For the first ~4 years, 50 BTC per block. Ah the glory days. Late last year, the halving occurred, lowering the amount to 25 BTC per block. In approximately 2016, we will halve again to 12.5 BTC per block.. until there are no more coins being minted.

To answer the obvious and subsequent question - when you send BTC and a transfer fee is taken out, this is added to the current block payout.

So say the next block provides 25 BTC, say I was the only one to send a transaction that block and added a .005 btc miner fee, that would be included in the reward for that block. The actual payout would be the default 25 BTC + any transaction fees (in this case, payout would be 25.005 to a pool or anyone who found the block). In the future, transaction fees should be fairly lucrative, as more people begin to utilize BTC, by the time the block reward is zero, transaction fees should be incentive to secure the network.

[BitCoiner2012]

I just want to understand whether BitFunder is a legit platform and if there is recourse if dividends don't pay out as promised

I do not personally use it (I prefer btct.co), however it appears to be legit as far as a platform from what I understand. Many utilize it. But recourse? My best advice is to only invest what you can afford to lose - there likely is no recourse for such a scenario. I take it back, the best advice is to research what you are investing into.

[polrpaul]

You just need to do some reading. I'm sure you'll get here since you landed here just fine.

[CanOpener]

Thanks! I will definitely do some research but i am overwhelmed by all the stuff out there.

Do you mind telling me why you prefer BTCT over Bitfunder?

I just want to understand whether BitFunder is a legit platform and if there is recourse if dividends don't pay out as promised

I do not personally use it (I prefer btct.co), however it appears to be legit as far as a platform from what I understand. Many utilize it. But recourse? My best advice is to only invest what you can afford to lose - there likely is no recourse for such a scenario. I take it back, the best advice is to research what you are investing into.

[bitcoinART]

So say the next block provides 25 BTC, say I was the only one to send a transaction that block and added a .005 btc miner fee, that would be included in the reward for that block. The actual payout would be the default 25 BTC + any transaction fees (in this case, payout would be 25.005 to a pool or anyone who found the block). In the future, transaction fees should be fairly lucrative, as more people begin to utilize BTC, by the time the block reward is zero, transaction fees should be incentive to secure the network.
[/quote]

,,,,,,

what happens when the total number of 21 million bitcoins is produced?  will the cost / coin become $1000/ coin?  i see pictures of bitcoins, is that the actual money, or is the money cataloged on the web, and all transaction are electronic? thanks for your help,,,im new

[BitCoiner2012]

Thanks! I will definitely do some research but i am overwhelmed by all the stuff out there.

Do you mind telling me why you prefer BTCT over Bitfunder?

I just want to understand whether BitFunder is a legit platform and if there is recourse if dividends don't pay out as promised

I do not personally use it (I prefer btct.co), however it appears to be legit as far as a platform from what I understand. Many utilize it. But recourse? My best advice is to only invest what you can afford to lose - there likely is no recourse for such a scenario. I take it back, the best advice is to research what you are investing into.

I shouldn't really say I prefer it, don't take it in that sense - I haven't utilized BitFunder at all.

But the reason I use BTCT is because of who runs it (burnside, who has credibility with me from running LTCGlobal and ltc.kattare pool). I used to mine quite a bit on the pool, never had any issues. My observations here add to this conclusion. That's enough for me to use my coin there.

[BitCoiner2012]

So say the next block provides 25 BTC, say I was the only one to send a transaction that block and added a .005 btc miner fee, that would be included in the reward for that block. The actual payout would be the default 25 BTC + any transaction fees (in this case, payout would be 25.005 to a pool or anyone who found the block). In the future, transaction fees should be fairly lucrative, as more people begin to utilize BTC, by the time the block reward is zero, transaction fees should be incentive to secure the network.

,,,,,,

what happens when the total number of 21 million bitcoins is produced?  will the cost / coin become $1000/ coin?  i see pictures of bitcoins, is that the actual money, or is the money cataloged on the web, and all transaction are electronic? thanks for your help,,,im new


[/quote]

Well, I didn't address that because no one can know such a thing. That will depend on the market. The concept is, fundamentally, that there will be minted less and less each halving while the demand increases over time. Long term, the price should increase.

However, BTC is divisible to a Satoshi, or eight decimal points. .00000001 is a Satoshi, the lowest possible denomination of BTC. If the price was ever hyper high we could utilize smaller decimal positions. It is a flexible currency.

[conradoo]

What is Bitcoin? It explains a lot for a newbie: What Is BTC?

[bitcoinART]

What is Bitcoin? It explains a lot for a newbie: What Is BTC?

THIS MIGHT HELP,,,NOT SURE
https://en.bitcoin.it/wiki/FAQ#How_long_will_it_take_to_generate_all_the_coins.3F

[kickaha4]

When I first started exploring Bitcoins I saw adverts on a load of sites about a shared mining pool where you pay a small amount of btc and this helps to pay for their mining equipment and they then give you back your money with a percentage bonus a week or so later.  Ok, sounded too good to be true - and it was - but at the time it was being advertised heavily, sounded legit with a well-presented website, and lots of other people were investing in it.  Luckily, I only lost 0.1 btc, but I'm sure others lost a lot more.

All I'm saying is that the pro of Bitcoins is their anonymity, but it is also a negative - its easy for somebody to present a believable business model, grab a load of coins, and then vanish. Probably better to mine yourself, although you need a stack of cash to buy the equipment! 

[Gabi]

Caps lock, improper grammatic, wrong uppercases, ,,, instead of ... and unability to just go and read the bitcoin wiki