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Bitcoin miners and Litecoins

Discussion in 'BBS Hangout' started by chow_yun_fat, Dec 20, 2013.

  1. chow_yun_fat

    chow_yun_fat Contributing Member

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    From my understanding, there is a new online? currency called Litecoins. What I don't understand is why are there Bitcoin miners? They use computers to somehow mine for the coins and are making money off of it.

    I guess Bitcoin miners are the people who set up workstations to process the transfer of Litecoins and they get a certain percentage for transferring it?

    When will this end? I'm not paying over $299 for a 280x =/ Right now they're at $399.
     
  2. tallanvor

    tallanvor Contributing Member

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    bitcoin mining has nothing to do with litecoins. you are thinking of litecoin mining. in both cases the process mimics mining for gold.
     
    #2 tallanvor, Dec 20, 2013
    Last edited: Dec 20, 2013
  3. chow_yun_fat

    chow_yun_fat Contributing Member

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    What is bitcoin mining??
     
  4. LonghornFan

    LonghornFan Contributing Member

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    I understand .008769% of this thread.
     
  5. heypartner

    heypartner Contributing Member

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    Bitcoin mining is processing and validating the accuracy of the transaction tree. Basically to protect the coin against fraud, eg, someone using a coin twice or to find thieves who stole coins

    It's a service provided by enormous computer power awarded by new coins
     
  6. fallenphoenix

    fallenphoenix Contributing Member

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    from my understanding bitcoin mining is the process of solving math problems in order to unlock bitcoins. people buy hardware to solve these problems. miners join pools of other miners, where the bitcoins mined are distributed based on the % of coins you were able to mine.

    <iframe width="560" height="315" src="//www.youtube.com/embed/GmOzih6I1zs" frameborder="0" allowfullscreen></iframe>

    http://www.bitcoinmining.com/
     
  7. Commodore

    Commodore Contributing Member

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    the definitive history of Bitcoin

    [​IMG]

    How Bitcoin works:

    [​IMG]
     
  8. tmoney1101

    tmoney1101 Contributing Member

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    Looks like a job for the Dakota boys.
     
  9. Svpernaut

    Svpernaut Contributing Member

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    This article explains BitCoin and mining really well. http://qz.com/154877/by-reading-this-page-you-are-mining-bitcoins/

    The problem with BitCoin mining is it being dominated by people with specialized hardware. It is impossible to mine and make a profit on a standard PC setup. You burn more energy mining than you bring in, and each bit that is mined makes the next mined bit less valuable.

    As an example, my quad core gaming desktop with 16GB of RAM and 4GB of video memory can mine about 77 MH/s. I've let it mine for 48 hours straight before, and made about 4 cents. The problem is, my PC uses a ton of power and would have been hibernating most of that time, thus saving me more than making me.

    What people (and companies) have begun to do is buy specialized hardware cards that can mine about 600 GH/s, and fill computers with them. These mining cards can currently pay for themselves (about $4700) in a few days (5-6 at most), the problem is getting one. They are on backorder... and what people think is happening, is the company has taken the pre-ordered number of cards, building them, and is then using them to mine. So, they are using the hardware you pay for to actually make them more money before sending it to you.

    Even if they do send your cards in 3-4 weeks, they are making 15-20 thousand dollars off of you before they do it. Money that could of and should have been yours. Also, again since mining can still be profitable now, doesn't mean it will be down the road. Again, the more of these cards that there are, the harder it gets to mine for a profit. This time next year, it will take months to mine the cost of these cards back.

    At this point the Bitcoin game is just that, it is a game and highly played by those with the resources to manipulate the system. They inflated the value so high, that it crashed 50% overnight simply because China said they weren't going to approve it.

    TL;DR - Bitcoin is a system that is controlled by those with the most computing power, which means that the new world currency is just as vulnerable to manipulation as old world currency.
     
  10. Ziggy

    Ziggy QUEEN ANON

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    I still don't understand this ****. Been reading about it for years. Was asked to co-found a Bitcoin exchange/trading system and I have no idea if that even makes sense or how bitcoins carry value. Y'all are crazy. Someone explain exactly what they are, why they hold value and do it 3 sentences or less.
     
    moestavern19 likes this.
  11. heypartner

    heypartner Contributing Member

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    ^^ man, that is not very close to the truth. I'm a professional icomputer scientist and I understand the bitcoin code base enough to know mining is not what most of you are saying at all

    And miners don't manipulate anything. Their role is to prevent manipulation and forgery. ALL bitcoin transactions are public record. Miners validate the tree. It's merely running graph analysis algorithms to find verify a valid begin point and endpoint of a coin in a graph
     
  12. got em COACH

    got em COACH Contributing Member

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    Easy. People use real money to buy fake money. The more people buy into it. The more valuable it will become.:cool:

    I bought 5 of em back in october at 200 a piece. When the value of each bitcoin sky rocket to 1200 around thanksgiving. I sold 1 coin to make my investment back. From here on out. It's all gain because i haven't lost anything
     
  13. Svpernaut

    Svpernaut Contributing Member

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    Again, read this link - it explains it simply.
    http://qz.com/154877/by-reading-this...ning-bitcoins/

    New bitcoins are created roughly every 10 minutes in batches of 25 coins, with each coin worth around $730 at current rates. Your computer—in collaboration with those of everyone else reading this post who clicked the button above—is racing thousands of others to unlock and claim the next batch.

    BitCoin is simply a virtual currency, that generates new currency randomly every few minutes. Miners are simply trying to guess the values to unlock that new currency, and claim their share of the prize.

    The problem is, it takes huge computing power to have a decent change of unlocking enough to make it worthwhile. Also, it gets harder and harder to unlock as time goes on because more people are trying every day.

    Miners do manipulate it, as only a small percentage actually turn a profit - and they keep a corner on the market to insure it stays that way. BitCoin is also manipulated daily by people trying to inflate the value.

    http://reddit.com/r/bitcoin
    http://reddit.com/r/bitcoinbeginners

    Tons of information to be had at those links. The "average Joe" can't make money mining BitCoin anymore. If you pay $4700 for a specialized hardware card you can make a dent, but the cards are on backorder for months on end - and are purchased mainly by people that have made mining a business. They corner the market.

    BitCoin is about as volatile as FOREX trading. Currencies have and always are easily manipulated. BitCoin is no different.
     
  14. tallanvor

    tallanvor Contributing Member

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    bitcoins and litecoins are 2 different decentralized digital currencies. litecoin is far less popular of the 2.

    mining is the process by which a new bitcoin enters circulation. the system creates an equation and the first one to solve it gets a bitcoin.
     
  15. heypartner

    heypartner Contributing Member

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    Svpernaut,

    Let's not get into semantic argument. I don't think you know what mining is. It is primarily what protects the currency from counterfeiting. It IS the code base. Mining is the brilliancy behind this masterful computer programming invention and crowd sourcing theory

    Mining is not manipulation. It is how the code works

    Now if you want to say the miners are then reselling the coins to manipulate the currency exchange markets, then that's a semantic issue. I'm only saying from a security aspect, no one can manipulate this code/bitcoin. It is beautifully designed to be unhackabe BECAUSE of miners

    And btw. There is a cutoff point where no more bitcoins can be generated
     
    #15 heypartner, Dec 20, 2013
    Last edited: Dec 20, 2013
  16. Space Ghost

    Space Ghost Contributing Member

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    You're speaking as if mining has a point. Mining is a way to distribute bitcoins, much like the fed just prints fiat money. The difference is that anyone can mine and take part. However, as mentioned, its those with the proper processing power can do any good. A year ago, all you needed was a good AMD graphics card and you could make some money. Now that Butterfly Labs released their mining boxes, you wont make any money on a PC. I contemplated buying one of the low end miners before they were released for a $100. A friend of mine bought one a month after that and didn't get it for 6 months. By the time he got it, the equations were so difficult that he is barely making half a bit coin a month with his new miner.

    I wish I jumped on the bandwagon back then and kept the coins.
     
  17. Commodore

    Commodore Contributing Member

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    You don't print bitcoins, you mine them. There is a finite amount that can ever be in circulation (unlike fiat money which can be printed).
     
  18. moestavern19

    moestavern19 Member

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    The biggest issue with BitCoin is the finite number. It will be reached within years and then the currency will lose all value because nobody wants to invest it, they want to turn on a machine and have it make money for them. Basically a virtualized gold rush. Who got rich during the gold rush? Those who sold the pans, the pick axes, and the real estate.

    In short, BitCoin has a finite shelf life and always has.

    No doubt the concept itself is brilliant though.
     
  19. tallanvor

    tallanvor Contributing Member

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    Bitcoins are a decentralized digital currency. The Bitcoin payment network holds value because it is the first ledger in the history of mankind controlled by no man (ex. I can send $1 trillion to someone in China instantly on a Sunday when banks aren't open). Since the Bitcoin payment network has value, bitcoin the currency has value as the only median allowed on the Bitcoin payment network.

    Why do you demand it be explained to you in 3 sentences? If something's value can't be described to you in 3 sentences it must not have value? That's moronic.

    why do u call it fake money? how is it any less or more real than other forms of currency?
     
    #19 tallanvor, Dec 20, 2013
    Last edited: Dec 20, 2013
  20. LScolaDominates

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    This is completely wrong, as heyp has been trying to explain. Mining verifies bitcoin transactions. It prevents people from spending the same bitcoin twice.

    I agree with others that the problem with bitcoin is its deflationary nature. The supply of new currency decreases until it reaches zero. This creates a huge incentive to hold onto your bitcoin, as it basically guarantees that their value will only go up. Currency only works when people use it.
     

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