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[–] DeadlyAura 0 points 2 points (+2|-0) ago 

I've also recently been looking into this. I had friends that mined bitcoin back when it started, and I was looking to get into it. I have a server array at my company that has plenty of extra power to spare for bitcoin mining, but I've come to discover that you can no longer use regular hardware for this?

I'm wondering if this is true... Do I REALLY have to invest in a "Bitcoin Mining Machine" to mine bitcoins, or can I still do it with my PowerEdge servers?

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[–] sodypops [S] 0 points 1 point (+1|-0) ago 

From what a friend explained to me the more bitcoins that get mined the harder it becomes for everyone to mine more More complex algorithms are needed

So I would imagine at this point you're going to need pretty dam intense hardware to get any bitcoin out but I still don't truly understand how any of it works

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[–] marvinrabbit ago  (edited ago)

Specifically regarding the mining process...

Very roughly, the mining is the mathematical processes required to validate and approve a batch of bitcoin transactions. Think of it like this... A batch of transactions form a lock by running all the transactions through a simple math formula. The mining is the effort to find a key that would open that lock. Only once a key is found for a batch of transactions are all the transactions finalized. So the process starts over with a new batch of transactions as soon as the previous one is done. Whoever finds the key is rewarded with some amount of bitcoins. (Many miners work together as a "pool" to spread out the risk and share in the gains.)

Here is a good basic explanation of the mining process. Play the video on the main page.

Pay attention to the part where it talks about different inventions that let more and more specialized computers do the mining faster and faster. The upshot is that several hundred dollars of modern specialized equipment can do the mining process millions of times faster than (even very powerful) desktop or server computers. It would be so slow on anything besides these specialized machines that you would not come close to covering the cost of electricity of running your computers. (And before you say, "Well, I have computers running anyway..." This would pin the processors at 100% constantly and draw even more power. And even then, you would have an infinitesimal fraction of the processing, and thus the earning, of one of these machines. Don't tempt yourself into thinking it is feasible with general computers.)

Edit: The last part of this is really aimed at /v/deadlyaura

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[–] PolarZoe 0 points 1 point (+1|-0) ago 

Basically, there are no separate bitcoins, there are only money transfers from wallet to wallet. All these transfers are stored in the blockchain.

Miners put all the transfers that are not in the chain yet together in a block and prove a difficult math problem to prove that all the transfers are there. Proving a block allows you to add an additional transfer from this block to your wallet and this is how new coins are essentially made.

This wallet is simply a string of characters and so is not save in itself. You need the right password to transfer money out of it, this is why if you lose the password, you lose the contents of the wallet.

Mining with an old computer is not recommended because the math problem gets harder and harder the faster the miners are able to solve the problem, this way the chance of finding the correct solution gets smaller and smaller, the faster the network gets. Unless you get a faster rig to compete.

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[–] sodypops [S] ago 

which is the most secure crypto currency? Also which do you think is gonna have the best value in the future?

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[–] Mateon1 ago 

I'm new to cryptocurrencies in general as well, and I can't tell what currency is the most secure, or going to have most value.

I'm excited about a cryptocurrency called Gridcoin, it's a PoS and PoR (Proof of Stake, Proof of Research) currency based on BOINC.

Proof of Stake means that your ability to mine a block depends on your balance. The more coins you have the easier it is. Think of it like interest rate in a bank account.
Proof of Research means that the person with the most magnitude (gained by participating to BOINC projects) mines blocks the easiest.

You can find a better explaination on their site, http://gridcoin.us/. If you want to participate by using BOINC you need to acquire some coins from a faucet and wait to enter the blockchain. If you want to gain interest, you can buy Gridcoin on an online currency exchange such as c-cex. The site goes into detail regarding the setup.

Remember to encrypt, and backup your Gridcoin wallet! You don't want to lose your coins! Also, remember to update often as Gridcoin is constantly in development.