Bitcoin mining made easy

[tombom]

How a bitcoin transaction works: nobody cares, the only use for bitcoin is buying drugs

[smoth]

holy smokes~! sup tombom!

[dimm]

Every coin is signed to an address. Every transaction is authorized by the private key of the sender's address, which is found integrated in the wallet. The database is distributed (p2p). The decision of the correct distributed database version to use is made by choosing the one with the most work put into it. Work equals to Bitcoin miners hashing.

Ok then here come the questions: The size of computation does not increase with every block because the requirements and function don't cause the new hash to be bigger than the previous. How does one check that a transaction went through? Oh right the transactions are on public display while the hash value is just there to let users verify. If a bitcoin is not a long number of specific characteristics and can be given in % (like .3 bitcoin) then how is there an algorithm inherent ceiling to the total number of bitcoins? "Distributed database" means everyone has a copy? So when a node makes a transaction where exactly does it send the info?

[varikonniemi]

The work put into hashing comes from how unlikely the hash has to be (bitcoin network difficulty). The hash always takes as much time, but the number of hashes that must be gone through before the right one is found increases.

The ceiling comes from the mining rewards. Currently each block gives 25 btc to the miner and it will keep on halving as time goes on until no more are created.

A node broadcasts the transaction to the peers it is connected to, which put it forward to the whole network. It becomes a permanent part of the history once a miner has included it in the block he creates.

[varikonniemi]

Anyone feeling ecstatic with the exchange rate doubling since the last time i posted to this thread? I know i am.

Hopefully i managed to convince some of you doubters to join the party. Not many asset classes make ROI in a few months.

That said, this party is only getting started. 99.7% of the people in the world can never own a full Bitcoin, so purchasing one today may be your ticket to prosperity.

http://www.youtube.com/watch?v=pID03RrmKow

How a bitcoin transaction works: nobody cares, the only use for bitcoin is buying drugs

Bitcoin gained in value after the silk road was shut down.

"Bitcoin isn't dubstep. Stop waiting for the drop."

[dimm]

I remember reading that the original Bitcoin never had a copyright made for it so as soon as the current owners decided to make a bid for the copyright name they got it. So what is the old bitcoin called now?

[varikonniemi]

Some trademark troll tried to register the name Bitcoin, but it was already widely known, so they failed. Now the rights are with the Bitcoin foundation. A very similar thing happened with Linux, and the outcome was the same.

[Cheesecan]

Congrats on the doubling..but I've been reading that the US govt wants to crackdown on bitcoins..

ASICs also seem to be widely available now, including on retailer just a few kilometres away from where I live. But they are damn price.

[varikonniemi]

I think the whole mining business has turned ridiculous because they sell their asics not based on cost to manufacture, but based on expected profit produced. As long as this practice is in effect, i see it as a huge scam (only apple is traditionally able to sell shit at such a high markup!).

Currently the best way to invest in Bitcoin is in my opinion buying them directly.

[varikonniemi]

Bitcoin has once again risen 20% since i last posted to this thread. And this trend will probably not change for quite some time. China's volume has increased tremendously and other asian countries are waking up.

Do you want to let the Chinese control the future of the global economy? If not, buy your Bitcoins now!

https://www.youtube.com/watch?v=24ce5tV-pgg

[Google_Frog]

This idea of "buy bitcoins before they run out" seems like quite a bad trend for something which is supposed to be used as a currency. If you have to be an early adopter of this currency for it to work in your favour then it won't be widely used.

Now, I'm not saying that bitcoins are a pyramid scheme but the argument "buy into this thing before other people do, be an early adopter" is basically the only 'good' reason to buy into a pyramid scheme. There need to be other reasons to buy bitcoins.

[knorke]

Currently the best way to invest in Bitcoin is in my opinion buying them directly.

From you?

[varikonniemi]

googlefrog: You don't have to be an early adopter for it to work in your favor. It is a deflationary currency so it always works in your favor, unlike FIAT scams.

knorke: Sure

[Anarchid]

It is a deflationary currency so it always works in your favor, unlike FIAT scams.

What a weird currency. The only winning move is not to spend.

[varikonniemi]

Damn the keynesian propaganda has sunken deep with you if you see inflation as a desirable thing

But yes, if you want to look at it that way then sure, with FIAT you must spend your money as fast as possible before the value is lost to inflation. Bitcoin is the polar opposite and you are encouraged to save because the value gains due to deflation.

Now let's look at one of the most defining aspects of money: to be a store of value.

To act as a store of value, a money must be able to be reliably saved, stored, and retrieved – and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.

https://en.wikipedia.org/wiki/Store_of_value

Fun fact: the US dollar has lost some 97% of it's value in a hundred years.

[PicassoCT]

Value only exists as long as there is a society existing whichin you can spend it. As the enviroment is allmost done for- and thus the endless cycle of war due to end of ressources gears up, no matter what side you store your faith in is worthless. Noone walks out of this thread to thrive!

[KingRaptor]

keynesian propaganda

Unless you're going to come out as an advocate of a resource-based economy (and given the nature of your pro-bitcoin comments here, you clearly don't), you might want to clarify that statement a bit more.

if you see inflation as a desirable thing

...does not follow from "deflation is an undesirable thing."

[smoth]

Fun fact: the US dollar has lost some 97% of it's value in a hundred years.

hurr durr store money in matress doesn't know why it is worth less.

really dude? really? You make your money work, it is how you surpass the inflation. GEEZE. I mean I get it, you like the bitcoin thing and for now people like it. It doesn't mean that you cannot manage your money properly and do well, with the right amount of principle, you can enough gains off it to live very comfortably. In the case of bitcoins, you only gain value of that 1 coin but if it was worth 2k USD, once you redeem it, the thing is gone. That isn't really useful.

[varikonniemi]

Unless you're going to come out as an advocate of a resource-based economy (and given the nature of your pro-bitcoin comments here, you clearly don't), you might want to clarify that statement a bit more.

What i advocate is to have a resource based economy, where Bitcoin is the technology used to transfer those resources around (using the concept of colored coins).

Bitcoin is a technology first and foremost, and the function as a currency is only one of its features. Colored coins allows a specific bitcoin to denominate ownership of eg. 1 Kg of gold. So you transfer that coin when you want to pay someone 1Kg of gold. Or one satoshi for one satoshi worth of gold. This is a function virtually unaffected by the BTC/EUR market rate.

In the near future there will be some pretty exciting features added to Bitcoin, and it will start to become clearer what i mean.

edit:a tutorial to colored coins http://www.youtube.com/watch?v=fmFjmvwPGKU

[Anarchid]

Any extensions to bitcoin protocol are unlikely to fix that the optimal move is not to spend. As it is already now, the best way to get richer is to already be rich. With bitcoins, you're even free from having to try.

See that story where guy bought some BTC and they deflated into million USD while he didn't even pay attention? Making wealth out of thin air is no basis for an economy, not in 2013.

You get richer each tick as long as you don't spend, which doesn't make any kind of sense, resource-based or otherwise.

Or are you saying that colored bitcoins will be deflationless?