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Author Topic: What's the purpose Behind all the Mining?  (Read 11622 times)
toxtom
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May 24, 2011, 07:27:46 PM
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I mean.. there's some kind of calculating work done- but for what is it really being done?
What exactly is happening behind the scenes of all this calculating work being done?


Tried to search for what purpose all this stuff is done but can't seem to find!
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May 24, 2011, 07:28:52 PM
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network horsepowering.
hash crunching 4 it.
smooth
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May 24, 2011, 07:29:50 PM
 #3

I mean.. there's some kind of calculating work done- but for what is it really being done?
What exactly is happening behind the scenes of all this calculating work being done?

Tried to search for what purpose all this stuff is done but can't seem to find!

Processing transactions.
rezin777
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May 24, 2011, 07:30:54 PM
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Keeping network transactions secure.
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May 24, 2011, 07:31:08 PM
 #5

I mean.. there's some kind of calculating work done- but for what is it really being done?
What exactly is happening behind the scenes of all this calculating work being done?


Tried to search for what purpose all this stuff is done but can't seem to find!
Mining is ...a way of processing and verifying transactions. (The wiki is a good source in general - I'd recommend having a good browse through it).

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toxtom
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May 24, 2011, 07:37:27 PM
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I mean from where the value is crated for these BitCoins? Cheesy
If all what is done is to generate some random data without any use then How the fck there can be any value to this money? Seems like it's just backed up by a promise to pay something and prices just goes up as there are more people who wants the coins?
Sounds exactly what's USD  Roll Eyes
barbarousrelic
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May 24, 2011, 07:37:57 PM
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I mean.. there's some kind of calculating work done- but for what is it really being done?
What exactly is happening behind the scenes of all this calculating work being done?


Tried to search for what purpose all this stuff is done but can't seem to find!

https://en.bitcoin.it/wiki/FAQ#Mining

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
toxtom
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May 24, 2011, 07:39:13 PM
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lol I can see how this system will go down when the hype is over and no-one wants to buy the coins anymore.
barbarousrelic
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May 24, 2011, 07:39:26 PM
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I mean from where the value is crated for these BitCoins? Cheesy
If all what is done is to generate some random data without any use then How the fck there can be any value to this money? Seems like it's just backed up by a promise to pay something and prices just goes up as there are more people who wants the coins?
Sounds exactly what's USD  Roll Eyes
https://en.bitcoin.it/wiki/FAQ#Where_does_the_value_of_Bitcoin_stem_from?_What_backs_up_Bitcoin?

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
rezin777
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May 24, 2011, 07:42:14 PM
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I mean from where the value is crated for these BitCoins? Cheesy
If all what is done is to generate some random data without any use then How the fck there can be any value to this money? Seems like it's just backed up by a promise to pay something and prices just goes up as there are more people who wants the coins?
Sounds exactly what's USD  Roll Eyes

The value is derived from the properties of Bitcoin and people who value those properties. Much like commodity money, except it was designed this way from the start.

The USD is fiat money, which is guaranteed by the might of the US government, quite different.
Cusipzzz
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May 24, 2011, 07:47:14 PM
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lol I can see how this system will go down when the hype is over and no-one wants to buy the coins anymore.


Right, there can't be a market for fast, secure, frictionless, anonymous (if desired) international money transfers without involving third parties like banks. I guess Western Union, Paypal, bank wires, should be good enough for anyone, right? Thanks for stopping by.

http://BTCSportsBet.com - The most complete bitcoin Sportsbook - All games from pro and college sports, Champions League, E-Sports, and reduced juice as well!
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May 24, 2011, 08:03:41 PM
 #12


The value is derived from the properties of Bitcoin and people who value those properties.


Precisely. The inherent value of the Bitcoin currency is in its properties as a useful money-commodity. Anyone who understands why certain things make good money shouldn't have a hard time grasping Bitcoin.

It's scarce, fungible (divisible), homogeneous (every piece is the same), secure (so far), anonymous, easily transferable across vast distances, easily storeable, and besides all that it's damn cool. 
LMGTFY
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May 24, 2011, 08:06:12 PM
 #13

I mean from where the value is crated for these BitCoins? Cheesy
If all what is done is to generate some random data without any use then How the fck there can be any value to this money? Seems like it's just backed up by a promise to pay something and prices just goes up as there are more people who wants the coins?
Sounds exactly what's USD  Roll Eyes
Six minutes to browse through the wiki? Blimey, that's fast! Take it a bit slower, though - you missed the page barbarousrelic linked to that answered your question.

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kiba
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May 24, 2011, 08:07:40 PM
 #14

http://bitcoinweekly.com/articles/the-wasted-electricity-objection-to-bitcoin-part-i

Quote
The Bitcoin mining system is much more than a wasteful digital shell-collecting enterprise that one might see with currencies based on rare but useless material objects. It encompasses the role of counterfeiting prevention, provides a powerful market analysis tool and offers receipt functionality (the ability to prove that a transaction occurred, as well as see the sender, receiver and value) far better than similar systems in conventional currency can ever hope to, while maintaining anonymity, and attempts to compare the inefficiency of bitcoin mining to its equivalents in other currencies, both resource-based and fiat, need to take all aspects of this functionality into account.

My writer explains it best!

smooth
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May 24, 2011, 08:12:28 PM
 #15


Maybe, but considering the alternative it's not at all clear that it is "wasteful."  Processing transactions using the traditional banking system is very expensive as well and that translates to high energy usage, just not necessarily directly.  Even directly; it's not like banks don't have big data centers.

kiba
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May 24, 2011, 08:44:29 PM
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Maybe, but considering the alternative it's not at all clear that it is "wasteful."  Processing transactions using the traditional banking system is very expensive as well and that translates to high energy usage, just not necessarily directly.  Even directly; it's not like banks don't have big data centers.


If you have read the article, I think it would agree with you.

Ricochet
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May 24, 2011, 10:01:19 PM
 #17

It's not Folding@Home.  It's not SETI@home.  The computational power does nothing for the good of humanity like what you're expecting.  It's really more like playing the lottery thousands/millions of times per second.

Except that by finding blocks and confirming transactions, you're strengthening the Bitcoin network.  If you believe that Bitcoin is going to go viral, then it's as much a benefit as F@H.  If you don't, then it's wasted electricity.  It depends on your point of view.
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May 24, 2011, 10:04:02 PM
 #18

If you believe that Bitcoin is going to go viral, then it's as much a benefit as F@H.

That's pretty subjective but it's certainly true that if bitcoin is a flop then all the resources put into it were wasted, much like any other projecct.

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