Why does Bitcoin need MINING? Would there be another way of maintenance?

[milesy]

Basically, I am a newbie and my question maybe sounds silly.

But after learning the basic mechanism of Bitcoin, I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

For now, all I can understand is that the minging system is designed for 2 purpose: distribute new created BTCs & maintain transactions.

Could there be another way of doing this without so much powerful computing force?

I can't figure it out but I am still hoping there will be someguy finding his muse in the future.

Or maybe mining is the only way and I am just babbling...lol.

[Tirapon]

The mining part protects the network against a 51% attack. The higher the network hashrate, the less likely it is for an attacker to gain 51% of the total hashing power.

[DoubleMyCoins!]

Basically, I am a newbie and my question maybe sounds silly.

But after learning the basic mechanism of Bitcoin, I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

For now, all I can understand is that the minging system is designed for 2 purpose: distribute new created BTCs & maintain transactions.

Could there be another way of doing this without so much powerful computing force?

I can't figure it out but I am still hoping there will be someguy finding his muse in the future.

Or maybe mining is the only way and I am just babbling...lol.

The mining is not only a way to distribute newly created BTCs, but also to verify (not maintain) transactions. Mining is necessary because it allows for authority in a system designed to otherwise have no authority. The authority comes from the computing power which isn't easy to duplicate or fake.

[taltamir]

mining is a misnomer. mining is the process of securing the currency against fraud via cryptography. During that process the participants slowly and randomly win bitcoins until all the coins are generated, at which point no new coins are generated but mining is still necessary. It serves two purposes

1. Security.
2. A fair way for distributing the newly created currency (it rewards early adopters & it pays miners for their work)

[seriouscoin]

Basically, I am a newbie and my question maybe sounds silly.

But after learning the basic mechanism of Bitcoin, I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

For now, all I can understand is that the minging system is designed for 2 purpose: distribute new created BTCs & maintain transactions.

Could there be another way of doing this without so much powerful computing force?

I can't figure it out but I am still hoping there will be someguy finding his muse in the future.

Or maybe mining is the only way and I am just babbling...lol.

Without mining, what is the incentive for ppl to secure the network?

The economical cost of mining is essentially to keep the network secured.

If you just look at Cost and energy consumption, the traditional banking system cost alot more. The Visa central ledger alone cost billions of dollars annually.

Atleast with bitcoin its the machine doing all the work.

[GhostInTheBlockchain]

Basically, I am a newbie and my question maybe sounds silly.

But after learning the basic mechanism of Bitcoin, I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

For now, all I can understand is that the minging system is designed for 2 purpose: distribute new created BTCs & maintain transactions.

Could there be another way of doing this without so much powerful computing force?

I can't figure it out but I am still hoping there will be someguy finding his muse in the future.

Or maybe mining is the only way and I am just babbling...lol.

If adding new blocks to the blockchain was cheap and easy then an attacker could add bogus, but valid looking blocks to the blockchain faster than the rest of the computers on the network and cause all kinds of problems.  Adding blocks to the blockchain needs to be costly so that all the good computers combined together will always be more powerful than a single bad computer.  

However, the cost to add a block doesn't necessarily need to be paid with CPU cycles.  That's just how bitcoin chose to do it.  This technique is called 'Proof of Work'.  The 'work' is the CPU cycles used to do a complex cryptographic algorithm.  Whatever is used to pay the price to add blocks to blockchain, the cost to verify that the new block is valid needs to be very low as this is also necessary to thwart bad guys (and make for better user experience).  These two requirements (high cost to add block, low cost to verify block) limit the kinds algorithms that can be used to add and verify blocks.  Another algorithm to add blocks to blockchain is called 'Proof of Stake'.  In that algorithm, the cost to add block to blockchain is that you need to make a portion of your coins un-spendable for a period of time.  Once that holding period is over you are free to spend those coins.  People that advocate this technique claim it uses less electricity.

Maybe someday someone will come up with yet a third way to pay the cost of adding a block to the blockchain.

[seriouscoin]

Basically, I am a newbie and my question maybe sounds silly.

But after learning the basic mechanism of Bitcoin, I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

For now, all I can understand is that the minging system is designed for 2 purpose: distribute new created BTCs & maintain transactions.

Could there be another way of doing this without so much powerful computing force?

I can't figure it out but I am still hoping there will be someguy finding his muse in the future.

Or maybe mining is the only way and I am just babbling...lol.

If adding new blocks to the blockchain was cheap and easy then an attacker could add bogus, but valid looking blocks to the blockchain faster than the rest of the computers on the network and cause all kinds of problems.  Adding blocks to the blockchain needs to be costly so that all the good computers combined together will always be more powerful than a single bad computer.  

However, the cost to add a block doesn't necessarily need to be paid with CPU cycles.  That's just how bitcoin chose to do it.  This technique is called 'Proof of Work'.  The 'work' is the CPU cycles used to do a complex cryptographic algorithm.  Whatever is used to pay the price to add blocks to blockchain, the cost to verify that the new block is valid needs to be very low as this is also necessary to thwart bad guys (and make for better user experience).  These two requirements (high cost to add block, low cost to verify block) limit the kinds algorithms that can be used to add and verify blocks.  Another algorithm to add blocks to blockchain is called 'Proof of Stake'.  In that algorithm, the cost to add block to blockchain is that you need to make a portion of your coins un-spendable for a period of time.  Once that holding period is over you are free to spend those coins.  People that advocate this technique claim it uses less electricity.

Maybe someday someone will come up with yet a third way to pay the cost of adding a block to the blockchain.

Proof of stake isnt perfect in anyway.

Beside we can add a new rule like sum of priorities to the proof of work and have essentially better system of both.

For early adoption stage, proof of work is better. For mature stages, i can see the new rule above being valuable.

[thinkloop]

I can't stop thinking how wasteful the mining electricity power is and, is it an essential part of a cryptocurrency?

Could there be another way of doing this without so much powerful computing force?

The simple answer is that the costliness and wastefulness of the process is the precise reason we use that process. If someone were to discover a technique that made mining easy and efficient, this would actually "break" Bitcoin, and a patch would be required that re-introduced costliness to the process.

This is because mining is the act of adding new transactions to the existing chain of all previous transactions, making a bigger longer chain. If building up this chain were easy, then people could make their own chains and try to trick the network to accept them as the real chain, changing the record of transactions. But since it is very costly to build up a chain, if you tried to make a competing chain, your chain would look puny, and weak and fake, next to the big, meaty, real chain that included millions of dollars of "wasted" proof of work.

[Hunterbunter]

This question has already been suitably answered by others. I will say, though, that if you think it's a bad waste of energy now, wait until it's mainstream. The only way to break the network is to waste more energy than is already being wasted, which gets harder and harder every day.

[PGPpfKkx]

google about Nxt coin

[greenlion]

Mining is probably the most ingenious and profound aspect of Satoshi's design.

The fact that concretely on its face it is performing completely arbitrary work, yet what it does on a network-wide composite view of the system reflects the kind of shift in thinking that we need to be able to abstract in order to understand distributed systems.

If you look deeply into the biophysics and biochemistry of physiological systems (which in many instances reflect a great model for distributed systems with no central control), you will see examples constantly of seemingly trivial exchanges of energy or chemical reactions that have a profound impact on the function of the system when you zoom out to a more macro level. For example, look into what mitochondria are actually doing on a very fundamental level.

[AnonyMint]

     The real question now is why this move is in China's best interest.

Because they can't stop it. The best they can hope for is to control the identities of whom is trading in Bitcoin, so they maintain some semblance of control. By legalizing it, they pull many into using exchanges and providing identity. At least they get more information about what is going on.

Otherwise they push it into the underground economy that they can't control and they can't get complete information about.

As I made clear upthread, the biggest weakness of Bitcoin is that if most of the users are not anonymous, then anonymity is effectively lost for everyone. Thus getting most users to transact through an exchange and bank account is the most effective strategy for China's elite.

Why is China ground zero for mining when the ROI is not greater than holding BTC itself?

Because it is the way to get BTC without giving your identity and to side-step capital controls. You can sell these coins privately at a premium to those who need to circumvent capital controls. An underground economy develops.

Now imagine a CPU-only altcoin comes along with very strong anonymity. Checkmate to China's elite. Very good for China's masses.

It is coming soon.