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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