Is this roughly how Bitcoin works?

[VicoDrive]

Trying to make better sense of what the whole Bitcoin thing is.  Correct me if Im getting something wrong...

I understand it can be used as payment with the biggest attraction (especially to businesses) is much lower fees than what credit card companies charge.  Pretty much do transactions like you might do with Paypal, seems pretty straight forward

As for making money, you provide your computer to process transactions.  When someone is sending someone else bitcoins, a computer somewhere in the world randomly is chosen to process that transaction.  If your computer is chosen, that fee that is paid on that transaction comes to you since your computer processed the transaction.  And of course, the more computers you have or the faster your computer is, the better chance you have at your computer being selected to do the transaction.

So, do I have it right???

[Anillos2]

Yes, but most of the hashing power is provided by mining rings like this:

http://www.datacenterknowledge.com/archives/2014/08/01/bitfury-asic-maker-builds-20mw-bitcoin-mining-data-center/

The transactions are grouped in blocks, not individually. The miner who discovers a new block takes transaction fees from all transactions in that block (and the 25 BTC).

Most of Bitcoin users doesn't try to solve blocks (mining), because you need specific hardware and cheap electricity if you don't want to loose money.

[Harry Hood]

Additional advantages of using bitcoin as a currency are:

1. The transactions are anonymous, like using cash
2. Huge transactions for thousands, hundreds of thousands, or millions can be made very easily with very low fees
3. The blockchain general ledger allows all transactions to be verified and seen by the public, so while you don't know who is making the transaction you can see the transactions being made.

[madroller]

Additional advantages of using bitcoin as a currency are:

1. The transactions are anonymous, like using cash
2. Huge transactions for thousands, hundreds of thousands, or millions can be made very easily with very low fees
3. The blockchain general ledger allows all transactions to be verified and seen by the public, so while you don't know who is making the transaction you can see the transactions being made.

You missed a big one...

Bitcoin transactions can not be reverse or charged back.

Once sent they are gone, so always double check the address your sending to.

[RodeoX]

A very major factor for me is that bitcoin is open source and distributed. It has no controlling entity and nothing can be hidden in the code. Without these two factors bitcoin would be nothing more than some companies frequent flyer coupons.

[ChuckBuck]

Here, you can laminate this and put this on your wall:




You have the general idea, though.  Bitcoin can be a payment system with very low fees, and Miners pool together to solve blocks, and get rewarded block rewards for their proof of work.

[VicoDrive]

Been watching some more videos about everything, it reminds me a lot of something the Playstation 3 use to do.  Was called Folding for Cancer or something like that.  All the PS3's networked their computing power to solve mathematical medical problems or something like that.  You could also join groups where I guess you shared the rewards with everyone in your group.  Well, there wasnt really any rewards, just bragging rights.  So I guess this works pretty much the same way except the rewards are bitcoins?

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

[dothebeats]

Been watching some more videos about everything, it reminds me a lot of something the Playstation 3 use to do.  Was called Folding for Cancer or something like that.  All the PS3's networked their computing power to solve mathematical medical problems or something like that.  You could also join groups where I guess you shared the rewards with everyone in your group.  Well, there wasnt really any rewards, just bragging rights.  So I guess this works pretty much the same way except the rewards are bitcoins?

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Yup. You can help process transactions with your laptop, but your loss is way too far from what you'll gain in the process. All finders of the block are rewarded with 25 btc at this time of writing, and the reward is set to halved once the target block halving is reached.

[dothebeats]

Oh and the block reward halving is implemented so as to prevent the rapid generating of coins. If all the coins were mined, the majority of the miners won't mine anymore, thus disabling the transaction processing in the network. Just in case you'd ask.

[VicoDrive]

All finders of the block are rewarded with 25 btc at this time of writing, and the reward is set to halved once the target block halving is reached.

I got a little lost with this part, not sure what you are talking about?

[ChuckBuck]

Been watching some more videos about everything, it reminds me a lot of something the Playstation 3 use to do.  Was called Folding for Cancer or something like that.  All the PS3's networked their computing power to solve mathematical medical problems or something like that.  You could also join groups where I guess you shared the rewards with everyone in your group.  Well, there wasnt really any rewards, just bragging rights.  So I guess this works pretty much the same way except the rewards are bitcoins?

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

You wouldn't be able to mine anything of real worth with a laptop, maybe some Alt coins specific to CPU mining.  For Bitcoins, you'd need what are called ASICs to mine anything decent.

As I'm typing this, mining at home, is for all intents and purposes, dead.  The Network hash rate is way too high, the Network difficulty is way too high, the block rewards are way too small with whatever hashing power you come with, and electrical costs pretty much zap any potential earning you think you'll get.

[onemorebtc]

Oh and the block reward halving is implemented so as to prevent the rapid generating of coins. If all the coins were mined, the majority of the miners won't mine anymore, thus disabling the transaction processing in the network. Just in case you'd ask.

not true.
the end-game is that miners only get transactions fees as a reward.
thats one of of the reason why the current discussion about resizing the blocks is important: more transactions in one block means lower fees for any user but more income for a miner - he needs this incentive to keep bitcoin decentralized and secure

edit: missed a word

[ranochigo]

Trying to make better sense of what the whole Bitcoin thing is.  Correct me if Im getting something wrong...

I understand it can be used as payment with the biggest attraction (especially to businesses) is much lower fees than what credit card companies charge.  Pretty much do transactions like you might do with Paypal, seems pretty straight forward

As for making money, you provide your computer to process transactions.  When someone is sending someone else bitcoins, a computer somewhere in the world randomly is chosen to process that transaction.  If your computer is chosen, that fee that is paid on that transaction comes to you since your computer processed the transaction.  And of course, the more computers you have or the faster your computer is, the better chance you have at your computer being selected to do the transaction.

So, do I have it right???

Computers are not chosen randomly to process transactions. Machine around the world are attempting to create hashes which corresponds to the target, the hash must contain a certain number of zeros to be accepted by the network. Bitcoin system attempts to keep block generation speed at 10 minutes so target gets higher when blocks are solved below 10 minutes and target gets lower when blocks are solved at above 10 minutes per. The better your machine is (faster hash generation) the faster you are able to attempt to guess the hash required for the next block.

[cambda]

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Basically old laptop would work, but you will waste much more electricity than you get Bitcoins. Even with very specialized ASIC hardware for bitcoin mining you need the most power effecient one + cheap electricity to be profitable.

[najzenmajsen]

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Basically old laptop would work, but you will waste much more electricity than you get Bitcoins. Even with very specialized ASIC hardware for bitcoin mining you need the most power effecient one + cheap electricity to be profitable.

or you could just steal power from the sun 

[Muhammed Zakir]

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Basically old laptop would work, but you will waste much more electricity than you get Bitcoins. Even with very specialized ASIC hardware for bitcoin mining you need the most power effecient one + cheap electricity to be profitable.

or you could just steal power from the sun  

It's easy! Use solar panel! I recommend not to use a laptop, it become hot too fast. You can get a desktop for cheaper and it won't be hot as laptop.

   -MZ

[Grand_Voyageur]

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Basically old laptop would work, but you will waste much more electricity than you get Bitcoins. Even with very specialized ASIC hardware for bitcoin mining you need the most power effecient one + cheap electricity to be profitable.

or you could just steal power from the sun 

It's easy! Use solar panel!

   -MZ

In most countries subsidies to generate electricity with solar panels earn more than BTC mining; so, you need to do your own homework to avoid incurring in an opportunity cost! 

[ranochigo]

Basically I could set my old laptop that I dont use anymore to do this on a regular basis correct?  I understand that to really get into this, you do need more computing power than a single old laptop, especially to make more money at it so I would be pretty lucky to get anything.  But thats basically what I could do right?

Basically old laptop would work, but you will waste much more electricity than you get Bitcoins. Even with very specialized ASIC hardware for bitcoin mining you need the most power effecient one + cheap electricity to be profitable.

or you could just steal power from the sun  

It's easy! Use solar panel! I recommend not to use a laptop, it become hot too fast. You can get a desktop for cheaper and it won't be hot as laptop.

   -MZ

Use raspberry pi... And also, solar panels do not generate a lot of electricity unless you have a big farm of them. Even so, in cloudy days and at night, no electricity would be generated. Your mining would get disrupted.

[Amph]

all those topic over and over again about the same thing, i'm starting to think that someone is doing it on purpose, using other aka, to have something to write about for his adv spam


there is something scammy /fishy behind those thread, lately....

[howtogetfreebitcoins]

I spent hours trying to get my laptop to mine bitcoins to find out it was to old and not fast enough.  Along the way I did learn alot about mining and hash rate it became clear you would have to spend alot of money on a rig to make it worth it.  Since I started using faucets they are free and you can earn alot of bitcoins even more if you share them with others!