What is all this computing power used for?

[BTChap]

Hello guys,
As i'm trying to promote bitcoins to some of my friends, one of them, who's quite computer savy asked me this question and i wasn't able to answer it properly.
The question was basically "What is all that computing power used for?" to which i answered : it's used to solve the algorythm designed by Satoshi in order to award bitcoins when a block has been solved. (more or less i can't remember my exact phrasing but that would be along those lines, as this is my basic understanding of the process)

Now i'm not the best to explain this to that guy, for he asked me again the very same question just after and i could see the loop we were in.
How can i satisfy this guy curiosity? What is all this power used for in the end? that algortyhm could be all designed to crack some encryption or something along those lines for all we know? Couldn't it? (this is what he told me or something of the same nature that i failed to retranscribe)

If you guys can provide a curious computer nerd with some infos, i'll be glad to be your messenger :-)

Cheers for your time.

BTChap

[cbhelp]

This is a good question.  Primecoin finds prime numbers....

What does bitcoin do though?  You cannot tell me that all that power is just going up in smoke....

[yolo2424]

Interesting question !

[btc4ever]

It is used to ensure the integrity of your transactions and prevent double-spends (counterfeiting) which is a very hard problem for a decentralized digital currency.

[greyhawk]

This is a good question.  Primecoin finds prime numbers....

What does bitcoin do though?  You cannot tell me that all that power is just going up in smoke....

But it is. All that power is used to throw random numbers at a hash function twice until one is mangled enough to have the required number of leading zeroes. There's your complex math puzzle: throwing shit at a wall until something sticks.

[cbhelp]

This is a good question.  Primecoin finds prime numbers....

What does bitcoin do though?  You cannot tell me that all that power is just going up in smoke....

But it is. All that power is used to throw random numbers at a hash function twice until one is mangled enough to have the required number of leading zeroes. There's your complex math puzzle: throwing shit at a wall until something sticks.

Thats crazyness.  You would think that Satoshi would have worked in some way for all this electricity and power to be useful for something else also.  Kind of sad actually.  Fold some proteins at least

[DeathAndTaxes]

Thats crazyness.  You would think that Satoshi would have worked in some way for all this electricity and power to be useful for something else also.  Kind of sad actually.  Fold some proteins at least

The work is useful.   If you build a depository safe, install a security system, hire round the clock guards, and as a result of the security nobody robs the depository was the resources "wasted"?  Would it have been better to try and making it do something else at the same time?  Would it be better if that compromise resulted in the depository being robbed?

Creating a decentralized consensus is a difficult problem, an incredibly difficulty problem, there has been NO solution to this prior to Bitcoin.  The work isn't wasted the work protects the network.  Bitcoins are worth more than a billion dollars BECAUSE of this solution.

[greyhawk]

This is a good question.  Primecoin finds prime numbers....

What does bitcoin do though?  You cannot tell me that all that power is just going up in smoke....

But it is. All that power is used to throw random numbers at a hash function twice until one is mangled enough to have the required number of leading zeroes. There's your complex math puzzle: throwing shit at a wall until something sticks.

Thats crazyness.  You would think that Satoshi would have worked in some way for all this electricity and power to be useful for something else also.  Kind of sad actually.  Fold some proteins at least

I guess he'd have done so if Bitcoin was ever intended to be anything other than a tech demo.

[alp]

This is a good question.  Primecoin finds prime numbers....

What does bitcoin do though?  You cannot tell me that all that power is just going up in smoke....

But it is. All that power is used to throw random numbers at a hash function twice until one is mangled enough to have the required number of leading zeroes. There's your complex math puzzle: throwing shit at a wall until something sticks.

Thats crazyness.  You would think that Satoshi would have worked in some way for all this electricity and power to be useful for something else also.  Kind of sad actually.  Fold some proteins at least

You don't think securing one of the best payment systems in the history of mankind isn't useful?  And finding random prime numbers is somehow more useful?

[DannyHamilton]

Hello guys,
As i'm trying to promote bitcoins to some of my friends, one of them, who's quite computer savy asked me this question and i wasn't able to answer it properly.
The question was basically "What is all that computing power used for?" to which i answered : it's used to solve the algorythm designed by Satoshi in order to award bitcoins when a block has been solved. (more or less i can't remember my exact phrasing but that would be along those lines, as this is my basic understanding of the process)

Now i'm not the best to explain this to that guy, for he asked me again the very same question just after and i could see the loop we were in.

Ok, you told your friend what it was used for and he asked the same question.  He probably needs to figure out how to better phrase his question.

Here are some possibilities, but in the end I'm only guessing what he wants to know:

• It is "used" to secure the transaction ledger so that nobody can modify a transaction after it has been recognized by the bitcoin network as "confirmed". In exchange for doing this work of securing the transaction history, the person who successfully solves and broadcasts a valid block receives a reward that consists of the sum of a subsidy of newly created bitcoins (currently 25 BTC) and all the transaction fees of all the transactions that are included in the block.
• It is "used" to compute two rounds of SHA256 hashing of the block header.  Each miner repeatedly calculates two rounds of SHA256 hashing on the header of the block they are working while incrementing a nonce in the header after each attempt.  The first miner to find a resulting hash that is lower than the current network difficulty can broadcast that block to all nodes they are connected to where it will then be relayed throughout the bitcoin network and added to the blockchain.
• It is "used" to provide a proof-of-work such that anyone that might want to try to modify the historical record of transactions would need to provide more work of an identical kind than the entire network of bitcoin miners have provided since the transaction was confirmed.  This creates a financial burden on the attacker that makes it undesirable to even try.

that algortyhm could be all designed to crack some encryption or something along those lines for all we know? Couldn't it?

No, it couldn't.

We know this because it is open source.  Any programmer can read the programming and see exactly what it does.  They can see that it just calculates a SHA256 hash, and doesn't attempt to "crack some encryption".

[kokjo]

Hello guys,
As i'm trying to promote bitcoins to some of my friends, one of them, who's quite computer savy asked me this question and i wasn't able to answer it properly.
The question was basically "What is all that computing power used for?" to which i answered : it's used to solve the algorythm designed by Satoshi in order to award bitcoins when a block has been solved. (more or less i can't remember my exact phrasing but that would be along those lines, as this is my basic understanding of the process)

it's provably wasted on nothing except for making a proof of time and energy and money are wasted, so that the waster can be 'compensated' for his lost energy and time.
The way it's wasted is by computing sha256 hashes until it's numerical value is less then a certain target number. Its like taking about 23 6-sided dices, and rolling them all until they is all 6's at the same time(except that you can proof to the world that you did get them all 6's and did not cheat in the process).

[lucasjkr]

The point of all that hashing is NOT to generate random coins for the miners. It's too secure and validate transactions. That miners are rewarded is a by product of needing a means to get coins into circulation and to provide an incentive for them to actually do that work, at least until such time as the transaction fees in a block are high enough to provide them with incentive all on their own.

I think a lot of people seem to omit that part, or reverse it in their minds. Especially people who say that they route to riches is in owning bitcoins for their appeciation potential because buying mining hardware is a money losing proposition; if that is (or, more, if it remains) the case, buying BTC will be just as poor as an investment, because if miners pull the plug due to costs being more than revenues, it'll be impossible to transact in bitcoins, if even it cash them out in irder to enjoy that appreciation.

But yeah. Without mining, bitcoin is dead in the water. And it exists for a far more important purpose than to give coins away to random miners

[DiamondCardz]

The computing power is used to secure the blockchain. The more computing power, the more secure the blockchain becomes.

[Abdussamad]

I think a lot of people seem to omit that part, or reverse it in their minds. Especially people who say that they route to riches is in owning bitcoins for their appeciation potential because buying mining hardware is a money losing proposition; if that is (or, more, if it remains) the case, buying BTC will be just as poor as an investment, because if miners pull the plug due to costs being more than revenues, it'll be impossible to transact in bitcoins, if even it cash them out in irder to enjoy that appreciation.

No this is not correct. Mining is a money loosing proposition nowadays. But that doesn't mean that bitcoin is going to sink. It just means the people will try harder to make better mining equipment or they will give up like you say and make room for other people. Also difficulty can go down as well as up. If enough people give up mining difficulty will go down and people will again have an incentive to mine. It's a free market basically.

[BTChap]

Hello guys,
As i'm trying to promote bitcoins to some of my friends, one of them, who's quite computer savy asked me this question and i wasn't able to answer it properly.
The question was basically "What is all that computing power used for?" to which i answered : it's used to solve the algorythm designed by Satoshi in order to award bitcoins when a block has been solved. (more or less i can't remember my exact phrasing but that would be along those lines, as this is my basic understanding of the process)

Now i'm not the best to explain this to that guy, for he asked me again the very same question just after and i could see the loop we were in.

Ok, you told your friend what it was used for and he asked the same question.  He probably needs to figure out how to better phrase his question.

Here are some possibilities, but in the end I'm only guessing what he wants to know:

• It is "used" to secure the transaction ledger so that nobody can modify a transaction after it has been recognized by the bitcoin network as "confirmed". In exchange for doing this work of securing the transaction history, the person who successfully solves and broadcasts a valid block receives a reward that consists of the sum of a subsidy of newly created bitcoins (currently 25 BTC) and all the transaction fees of all the transactions that are included in the block.
• It is "used" to compute two rounds of SHA256 hashing of the block header.  Each miner repeatedly calculates two rounds of SHA256 hashing on the header of the block they are working while incrementing a nonce in the header after each attempt.  The first miner to find a resulting hash that is lower than the current network difficulty can broadcast that block to all nodes they are connected to where it will then be relayed throughout the bitcoin network and added to the blockchain.
• It is "used" to provide a proof-of-work such that anyone that might want to try to modify the historical record of transactions would need to provide more work of an identical kind than the entire network of bitcoin miners have provided since the transaction was confirmed.  This creates a financial burden on the attacker that makes it undesirable to even try.

that algortyhm could be all designed to crack some encryption or something along those lines for all we know? Couldn't it?

No, it couldn't.

We know this because it is open source.  Any programmer can read the programming and see exactly what it does.  They can see that it just calculates a SHA256 hash, and doesn't attempt to "crack some encryption".

This is what my friend is gonna get in his face
Thank you very much for explaining this clearly to me. This is much appreciated and it will definitely help my speach when I talk about BTC.
Now i just have to go help BTC take over the world.
Many thanks.

[BlackBison]

Simple answer: the hashpower is used to audit the transactions.

This is the kind of thing I say to normal people:

'I am a bitcoin miner, one of thousands of independent auditors that all work together to ensure all payments are correct. As a reward for this work we are paid a tiny amount of BTC every so often'.

[gmaxwell]

Simple answer: the hashpower is used to audit the transactions.

The problem with that simplification, beyond it being pedantically wrong, is that it results in incorrect understandings about what malicious miners could do and what purpose the other nodes on the network serve.

All Bitcoin nodes audit all transactions. Bitcoin is predominantly zero trust... everyone checks everything, and this is important to creating the economic incentives that keep miners honest.

Mining exists to make transactions irreversible through people expending energy "cementing" the transaction history they believe to be the official history, and in doing so producing a consensus which can be cheaply validated by anyone.

[Elwar]

It is used to secure the Bitcoin blockchain from an outside attack.


If he wishes to manipulate the blockchain all he simply has to do is expend more energy than what is currently being used to secure it.

[Gabi]

it's used to solve the algorythm designed by Satoshi in order to award bitcoins when a block has been solved

NO

that algortyhm could be all designed to crack some encryption or something along those lines for all we know? Couldn't it? (this is what he told me or something of the same nature that i failed to retranscribe)

NO


The computing power is used to ensure the security of the bitcoin network. And security is never cheap, never.

[BTChap]

NO

NO

This convinced me so much i didn't read further...
The last sentence was usefull tho. But the first two were absolutely a waste of time. Give me more than these "NO" man. Tho i got enough from other comments, I'm sure you can develop more than just "NO". And don't shout at me. It doesn't help me understand better. When explaining you have to lower yourself to the level of your dumbest listener. otherwise you're wasting your time. (Yeah i know i'm gready, give a no and i'm asking for more, give me a second one and i'm asking for a full blast explanation)

Security comes at a cost and we all sharing this cost. For once, mankind is pretty generous. Seems almost too good to be true