Posted on 12/07/2013 11:23:34 AM PST by Errant
The Bitcoin price last traded at USD 790 (this morning) which represents a 37% price crash against its trading high of 1242, vaporising the wild dreams of just a few days ago where some reported that the virtual money could be destined to go as high as 1 million! Whilst never realising the difference between what is virtual and what is real, instead in large part bitcoin pumper's remain in denial as many have been seduced by the golden coin image to imagine that bitcoins and gold are the same or similar when the reality is the exact opposite. Bitcoins is fairy dust, it is perceived as being very valuable but a small gust of reality is enough to make it disappear.
(Excerpt) Read more at marketoracle.co.uk ...
I'm sorry you see it that way. They were asked in all sincerity. Your defensiveness is puzzling but that's OK. You appeared to be the best informed FReeper on the thread about bitcoin so I asked you. Sorry to bother you.
One last post. That answers (kind of) what kind of algorithm is being solved but it says nothing about what the purpose of them is. It is not an answer to any of my questions. If you don't understand what it is I am asking it's OK to admit that.
If you say so I guess............
http://economiccollapsenews.com/2013/12/02/will-bitcoins-go-down-as-the-second-largest-ponzi-scheme-in-history-gary-north-says-yes/
"but it says nothing about what the purpose of them is"
The purpose is simply work for work's sake. The concept requires a certain amount of "work" to be performed, and that level of work difficulty can be adjusted giving up a hash (a code) to verify some work was actually performed.
That is the mining algorithm's main purpose ( it also does process transactions and earns credit, but that's is another subject). Through this process something (a code) is generated that is unique, verifiable and can be exchanged/traded over the internet. That code can also be printed out safe keeping, or made into a type of barcode to be read by a scanner or the camera of your iphone.
Does that help, or is there something more specific?
No.
The purpose is simply work for work's sake.
That is more what I meant. Not what the task is but what will the result of the task be applied to. If the answer you just gave is correct then essentially there is no objective value to the result of the algorithm. That's fine, I'm not condemning that out of hand, if that's what it is then that's what it is. I am confused as to how the solutions to equations with no meaning can be the underpinning of a currency but I'll leave it at that until I can study the overall economic concept more thoroughly.
The reason I asked is that equations are usually solved for a purpose. Such as the cooperative use of computers to decode the human genome. Or a million other scientific applications both theoretical and practical. If the equations being presented are for some unstated purpose like that I'd like to know what it is before participating.
If the algorithms are going to be used to decode the human genome or build a warp drive engine for space travel I’m good with that kind of thing. If some wannabe Hitler is trying build a doomsday machine or decrypt all of our defense data then I don’t want to participate even if I can be a super rich slave/corpse.
Or maybe they are looking for the world’s best mathematicians through a competition of increasingly difficult equations. If so the same questions; who’s looking and why? Why the subterfuge?
That's the kind of thing I was asking about.
Or maybe they are looking for the world’s best mathematicians through a competition of increasingly difficult equations.
The code is open source so anyone with the technical knowledge can examine it and see what it is that's being perform. Some examples are in the links above. Nothing sinister, just grinding through a problem to create work.
They've come up with a way of measuring it called Mega hashes / second or abbreviated as Mh/s. At present, it takes about 150,000 Gh/s of processing 24/7 for a week to "mine" a single bitcoin.
Only ASIC miners have the efficiency to make a profit out of mining Bitcoins now that the difficulty level is so high. Even they use about .5 - .5 Kwh for that amount of processing power. Prior to that, .5 - .Kwh through a GPU miner was only good for about an equal number of Gh/s and that was a vast improvement over GPUs used before they figured out how to us GPUs.
As a matter of fact, the need to generate Bitcoins is one of the main reasons for the rapid development of these new ASIC units. You can see what a the vast improvement in processing ability has been achieved. It will undoubtedly and has found its way into other uses, like spinoffs from the space program. :)
Litecoins are mined in the Mega hash per second range and still profitable to do so using GPUs - but not Bitcoins.
Anyway, it pretty fascinating to us tech junkies. We do it for fun... ;)
Only ASIC miners have the efficiency to make a profit out of mining Bitcoins, now that the difficulty level is so high. Even they use .5 - .6 Kwh of electricity for that amount of processing power. Prior to that, .5 - .6 Kwh through a GPU miner was only good for about an equal number of Gh/s (600 Gh/s) and that was a vast improvement over the GPUs CPUs used before they figured out how to us GPUs.
To this old dinosaur that sounds like makework.
...the need to generate Bitcoins is one of the main reasons for the rapid development of these new ASIC units.
That sounds like something of value being created although it sounds like a very round about way of getting it done.
I'm afraid the math itself, as well as the computing, is well above my knowledge level. I wouldn't be able to deduce from the equation or the result whether it had a purpose to it other than just running a computer processor through its paces. But then no one would if they were only given a single task isolated from any knowledge of its potential application to a larger problem being worked on.
I appreciate your effort to clarify those things but that's all Greek to me.
Don't know what a GPU is even. But I thank you for presenting it.
how do you make change?
It was meant to be a way to store to stash a small amount of money to pay small bills, kind of like leaving change in the ashtray to feed the meter.
If you are buying them for hundreds of dollars as an investment, then yes you are getting scammed by being late to a bubble.
Errant: It is an abstract concept and one that's a little hard to understand and something new, which is based on computer computations solving unique "algorithms".
Tigers Eye: What math problems are those algorithms solving?
They are searching for a result of a cryptographic hash function that meets a very restrictive criteria. The only way to find a result that meets the criteria is a brute force search. This requires so many iterations of the computation that it requires a network of computers running in parallel to find a qualifying result within the average 10 minute period the system requires. So, the "problems" the system is "solving" are purely computational and completely benign.
What value do those solutions have?
The result of the cryptographic hash is a digital signature that is computed from all of the transactions preceding it in the accounting ledger. Any change to a transaction or the book keeping data will result in a different digital signature indicating the ledger has been corrupted.
Who is collecting those solutions and for what purpose?
The result of the cryptographic hash is stored in the ledger in a block header. There is a block header generated every 10 minutes on average. Because the result in each block header is computed from transaction data in the current block and data in the preceding block header, each additional block strengthens the security of the transactions further back in the ledger.
Does that mean that the computations are a form of book keeping and that the "miners" are doing that work voluntarily with the reward of some of the action (bitcoins) for successfully updating the ledger?
Exactly. And the whole search for a qualifying result (they call it proof of work) is to prevent one or a group of colluding computers on the network from being able to change the ledger by recomputing a new digital signature.
Well, knock me over with a feather. I was just hoping to construct an analogy workable enough that you could see where I was going wrong. :)
If I could ask you one more question; if the block header (and thus the ledger) are being updated every ten minutes what is it verified against to ascertain accuracy?
I think you might have just told me that but I'm not sure.
To be more accurate, the ledger is being updated continuously with new transactions which are shared throughout the network. If a miscreant miner managed to modify one or more transactions and generate a block header ahead of any other miner, the other miners would reject that block header when they try to confirm by recomputing the hash using their own presumably correct data from the transactions.
Thank you very much for your clarifications.
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