Topic: Bitcoin noob needs a hand. - page 2. (Read 13938 times)

I suppose you're right with the "worth as much as someone is willing to pay for it."  That thought just never occurred to me because before a few hours ago I had never heard of bitcoin.


Explained by the poster above you, but all info is appreciated at this point.


Understandable.


I noticed that pools seem to be a better option than solo from what I've read so I'll look in to that.  I just don't want to end up in a pool running a not-so-friendly system of dividing earnings.

In my case startup cost can be put aside.  I build a new gaming rig once every 1 to 2 years so I don't need to spend any money there.

I'm aware that electricity consumption does cost something, but my question is far from invalid.  How do bitcoins retain their value if they can be created by anyone?



Ah, so there is a point to these "puzzles" being solved that benefits the whole bitcoin operation.  I figured there had to be a point but this isn't exactly easy-to-understand information to be butting on the bitcoin.org home page, haha.



If mining is similar to f@h or s@h where you just click "start mining" and walk away I'd consider that little to no effort.

Mining would cost me whatever my PC consumes in electricity (over normal usage) while mining.  I still don't see how it retains that type of value in the exchange rate.


I'm not sure what you're getting at here.  Are you saying I should take more time to learn about bitcoins before mining them?  If so, I could use some noob-friendly links.  The bitcoin wikipedia page only confused me more.

1 - Something is worth what people are willing to pay for it. As long as there are people willing to buy bitcoins, it has value. The same happens with gold for example.

2 - Mining is not 'useful' like folding@home or BOINC, but it is essential to the network. Bitcoin transactions are secure because someone would need to invest millions in hardware to try to disrupt the network (even if you do so, you will not cause that much damage...). Regarding the 'what is it' part, it is basically trying to find an acceptable hash of a given number. Think of it like a lottery.

3 - Their creation is far from being free. You need to invest in hardware, pay electricity, etc.

4 - Go to a pool (example: http://deepbit.net) and make an account. Install OpenCL (I'm not sure if this is already installed with the AMD drivers), download GUIMiner and run it with your pool's username/password.

Startup costs and electricity cannot be shifted aside.  This question is invalid.


Basicly the miners are repeatedly 'hashing' a block of transactions, looking for a hash number that is less than a particular number that represents the present difficulty necessary to produce a block every 10 minutes or so.  At that same time, this process is functionally "brute forceing" the blockchain in advance of an attack, securing the blockchain against any such attack on an ongoing basis.  There is much more to it than this.


You assume incorrectly, because they are neither free nor require little effort.


I suggest you study the system till you 'grok' it before you attempt to setup a mining rig.  You will likely be disappointed otherwise.

Hey everyone.  Just came across some talk about bitcoins so I figured I'd look in to it and find out wtf it is.  So far I've been to several websites and the maine wiki page for it but I still have some unanswered questions.

So far I have gathered that it is an online/digital currency that is transferred on a network made up of PCs all over the world, sort of like distributed computing(folding@home, seti@home, etc) which results in fee-less transactions and whatever else...haven't read that far in to it yet, so feel free to add more info or correct me where I'm wrong.

My questions are...

1. If you can mine for bitcoins this means you're pretty much creating bitcoins for free(electric bill and component purchases aside). If this is the case then why do bitcoins have any value to them? This seems like it would be the same as printing your own $ and being able to use it legally.

2. What exactly is bitcoin mining? So far I've gathered that you use your CPU or GPU to solve "puzzles" sort of like if you were folding@home but the part that confuses me is...what puzzles are you solving? Does the solution to this puzzle benefit anyone like f@h'ing virtual proteins benefit the medical world?

3. Apparently there is a bitcoin-USD exchange rate and it is currently around $5 to 1 btc. Again...how the hell do bitcoins hold value if they're created for free with little effort?  I'll go ahead and assume this is probably in the top 5 questions noobs ask.

4.  Where do I start to get GPU mining set up properly?  I used the article linked below but I don't know if that's the current best method.  My specs are below as well.

GPU mining instructions I used(on the step that requires waiting for the network sync/blocks to download) - http://www.newslobster.com/random/how-to-get-started-using-your-gpu-to-mine-for-bitcoins-on-windows

My rig specs...

CPU - AMD Phenom II X4 965 Black Edition(c3) @ 4.0GHz
MB - Asus Crosshair IV Formula
GPU - Sapphire Radeon HD5830 1GB GDDR5 @ Core 875MHz / Memory 1100 MHz
PSU - Corsair TX-850w
HDD1 - Seagate Barracuda 1TB SATA 6.0GB/s
HDD2 - Western Digital Black 640GB SATA 6.0GB/s
OS1 - Windows 7 Ultimate x64
OS2 - Linux Mint 11(external HDD)