What the forget is a bitcoin

[TripleNickels]

So, as I was lulzing at Ghost's broadcast, I heard a mention of bitcoins, which I've heard of a time or two before. I decided to actually look up what it was, and it seems like the stupidest thing I've ever heard of.

This is my understanding of a bitcoin:
1. Open bitcoin program
2. Wait 10 minutes, generate 50 bitcoins randomly
3. Sell these 50 bitcoins that you just generated out of thin air for real money or buy something with it

Why the forget would anyone accept a currency that was just randomly generated, this makes no sense to me it completely defies the concept of an economy, you get money for doing zero work besides leaving a program open idling as you go about your business and it generates completely loving pointless hashes and compares them to other hashes. Honestly, you might as well just generate a number 1-5000 and check to see if its 243 700 times a second and if it is give them free money.

Someone explain this to me because it makes no loving sense what so ever.

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[Narkro555]

I think what it does is makes your computer take more electricity or something, it can overheat. I dunno, the government doesn't like it. The whole bitcoin system sounds corrupt.

[PossesedAngel]

Uses your cpu to make math or some super duper stuff which they get a profit from.
its kinda like that old alien watch thing that the more people run the more things they see thanks to your cpu.

[TripleNickels]

I think what it does is makes your computer take more electricity or something, it can overheat. I dunno, the government doesn't like it. The whole bitcoin system sounds corrupt.

It wouldn't make your computer take more electricity, it just makes it use more processing power. It's just like running any other program in the background, but it gives you free money. The only explanation for even creating something this stupid would be to give yourself an infinite ammount of currency.

Uses your cpu to make math or some super duper stuff which they get a profit from.
its kinda like that old alien watch thing that the more people run the more things they see thanks to your cpu.

https://en.bitcoin.it/wiki/FAQ#How_does_the_proof-of-work_system_help_secure_Bitcoin?
I'll explain it to you if you don't understand hashes.

Code: [Select]

payload = <some data related to things happening on the Bitcoin network>
nonce = 1
hash = SHA2( SHA2( payload + nonce ) )
It asks the server for a number, which it stores as payload. It then takes that payload, adds a value "nonce" to it which increases incrementally, and turns it into a hash. A hash is a one way encrypt, sometimes used for storing passwords securely. It takes this encryption, and re-encrypts it.

The work performed by a miner consists of repeatedly increasing "nonce" until the hash function yields a value, that has the rare property of being below a certain target threshold.

Now that it has this hash, it checks to see if it has a certain amount of zeros in it or something like that. It does no valuable research, they are not paying you to do this, it just randomly generates currency.

[Stocking]

theyre pooling processing power.

its like folding@home except you get paid for it in the form of bitcoins.

[TripleNickels]

theyre pooling processing power.

its like folding@home except you get paid for it in the form of bitcoins.

Your processing power checks random hashes. This not only doesn't make any sense but yet again, they generate the money out of thin air they're not burning a dollar for every 100 bitcoins or so they give out.

[Bloody Mary]

Too bad bitcoins are a very unstable currency, as it were.

[TripleNickels]

Too bad bitcoins are a very unstable currency, as it were.

It doesn't make sense that they'd be accepted in the first place and have any value. It's like accepting World of Warcraft gold at Walmart.

[TomTheGeek²]

It can be converted to USD...

Either way mining is like suicidal for the GPU.

[Monocle]

World of Warcraft gold at Walmart.

I'll give you 500 gold for an iPad.

[TripleNickels]

It can be converted to USD...

Either way mining is like suicidal for the GPU.

Yeah, but it's still randomly generated. Again, it's like accepting World of Warcraft gold at Walmart. Even if you can sell your gold for $20 it's still being made out of thin air, this is the exact reason counterfeit money is illegal.

[keonesan]

It wouldn't make your computer take more electricity, it just makes it use more processing power. It's just like running any other program in the background, but it gives you free money.

I'm not sure if knew but your CPU does draw power. Huh, duh. :/

[TripleNickels]

I'm not sure if knew but your CPU does draw power. Huh, duh. :/

It wouldn't make it draw significantly more.

[Bloody Mary]

It doesn't make sense that they'd be accepted in the first place and have any value. It's like accepting World of Warcraft gold at Walmart.

That's the thing, bitcoins aren't sanctioned by the US or any other country, which means that if one day people decide that bitcoins are useless, the bitcoin market will crash so hard.

[keonesan]

It wouldn't make it draw significantly more.

I'm pretty sure it would make a slight different on your electric bill if you run that program a lot.

My CPU is a quad core and it draws like 150watts or something. GPU is even worse since mine draws 500watts.

That's a lot of draw bro.