What is all this computing power used for?

[DeathAndTaxes]

Use this metaphor:

Every computer participating in mining is a type of digital accountant. Every accountant is competing for the privilege of writing a page in a universal ledger everyone can read and check for errors. If an account guesses a correct number and records a page in the ledger they are awarded a sum of bitcoin.

This has been the best way of explaining mining to folks that I have encountered.

The guessing game being played is the correct header for the next block, I believe, but someone could probably correct that for me.

That is a good simplification.  I would change "correct" to "good enough" as correct implies there is only one possible solution.  For any given block there is a nearly infinite possible solutions.  Miners are collectively just looking for the first one which is "good enough".   We measure good enough by the target, which is a 256 bit number directly proportional to difficulty.  The miner constructs a valid block, hashes it and checks to see if it is "good enough" that is the resulting hash is smaller than the target.

Right down the target is: 000000000000001CDC2000000000000000000000000000000000000000000000.  There are ~2x10^60 hashes smaller than this value and any will meet the block difficulty requirements.

[hayek]

Thanks D&T

I understood the good enough concept but I never worked it in to the metaphor. I think that's a good way of explaining difficult and scale w/r/t new people competing to make the guess.

[The Bitcoin Co-op]

Even if other things can't be done, just finding prime numbers isn't exactly useless. Maybe there are similar things that can be found. Bitcoin can be altered by consensus--a necessary survival feature--so it's not as though this fact is really a knock against the continued use of Bitcoin. When you need to adjust the difficulty, just give multiple problems. Primecoin manages, but primecoin is silly because Bitcoin could obsolete it easily if it chose. We could even choose which kind of problem we want to solve (if the network scales difficulty to be the same) when we mine, if other alternatives exist.

I think people are overrreacting to the OP as a knee-jerk reaction to defend Bitcoin, when really that's not necessary. Bitcoin is the best option for a money system, but it's not perfect and can always improve.

[markjamrobin]

Even if other things can't be done, just finding prime numbers isn't exactly useless. Maybe there are similar things that can be found. Bitcoin can be altered by consensus--a necessary survival feature--so it's not as though this fact is really a knock against the continued use of Bitcoin. When you need to adjust the difficulty, just give multiple problems. Primecoin manages, but primecoin is silly because Bitcoin could obsolete it easily if it chose. We could even choose which kind of problem we want to solve (if the network scales difficulty to be the same) when we mine, if other alternatives exist.

I think people are overrreacting to the OP as a knee-jerk reaction to defend Bitcoin, when really that's not necessary. Bitcoin is the best option for a money system, but it's not perfect and can always improve.

In my opinion, if you can secure Bitcoin, and do something useful, like finding prime numbers, but maybe more useful Perhaps a proof of work system could be established in a future coin, based off of protein folding.