What's the purpose Behind all the Mining?

[toxtom]

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!

[1714842947]

1714842947

[1714842947]

1714842947

[Basiley]

network horsepowering.
hash crunching 4 it.

[smooth]

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]

Keeping network transactions secure.

[LMGTFY]

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).

[toxtom]

I mean from where the value is crated for these BitCoins?
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  

[barbarousrelic]

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

[toxtom]

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]

I mean from where the value is crated for these BitCoins?
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  

https://en.bitcoin.it/wiki/FAQ#Where_does_the_value_of_Bitcoin_stem_from?_What_backs_up_Bitcoin?

[rezin777]

I mean from where the value is crated for these BitCoins?
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  

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]

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.

[evoorhees]

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]

I mean from where the value is crated for these BitCoins?
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  

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.

[kiba]

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

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]

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

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]

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]

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.

[smooth]

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.