Topic: New to bitcoin - page 2. (Read 4877 times)
Well of course it's possible, yes. It's just so extremely unlikely that I wouldn't bother with it, not when it's using up my CPU resources that I need for other tasks.
Try turning the Generate option on for a minute to get a "khash/s" value (then turn it off) and plug that into the calculator to see just how futile it is to try to mine with the standard client at this point.
It is futile in the same way that buying lottery tickets is a futile way to earn a steady income.
But I'm guessing even a dead slow computer doing 2khash/s could theoretically 'win the lotto' and earn 50 btc within 10 seconds of installing the client*
*someone more experienced tell me if I'm wrong about this.
Excluding the delay that bootstrapping the blockchain imposes at startup, then yes, it is possible for any computer to pull a hail mary at any time after it starts generating.
Try turning the Generate option on for a minute to get a "khash/s" value (then turn it off) and plug that into the calculator to see just how futile it is to try to mine with the standard client at this point.
It is futile in the same way that buying lottery tickets is a futile way to earn a steady income.
But I'm guessing even a dead slow computer doing 2khash/s could theoretically 'win the lotto' and earn 50 btc within 10 seconds of installing the client*
*someone more experienced tell me if I'm wrong about this.
The standard client does not try to mine by default, and is instead a way to manage your wallet and keep the blockchain up to date. You have to manually check the "Generate" box, which will then use up 100% of your CPU. There are alternative miners that other people have made (in the Mining forum here) that can utilize your GPU if it supports CUDA or OpenCL. Most of them are command-line, though I understand someone made a GUI in one of those threads somewhere.
In both cases, you can use http://www.alloscomp.com/bitcoin/calculator.php to estimate approximately how long it would take you to generate a block yourself at any given hash rate. Try turning the Generate option on for a minute to get a "khash/s" value (then turn it off) and plug that into the calculator to see just how futile it is to try to mine with the standard client at this point. Note that the calculator is using the current difficulty number, and historically the difficulty has mostly risen every ~2 weeks or so.
Just for grins, put "1" as the difficulty factor in the calculator, which is where it was when Bitcoin first began, and you'll see why people got the impression that "Bitcoins = generating free money!" since even a modest computer would solve a block within each hour. But at that time, because they were so easy to get, people only traded them for less than a penny apiece. Now that the computational power of the network has increased, and the difficulty has risen to compensate, each individual coin is worth more (up to today's exchange rate of about $0.80 apiece).
I'm not good at explaining just what exactly "solving a block" means, other than it writes various transactions permanently into the public record, which is immediately updated and sent to everyone else running the Bitcoin client. Thus, running the client by itself doesn't really help secure the network, and neither does attempting to generate blocks without actually solving any. It's the act of solving a block, verifying that all transactions up until that point are correct, that strengthens things.
The current reward is 50 Bitcoins for solving a block, though once we reach a certain point, that number will be cut in half, then half again later, etc which is why there will never be more than 21 million coins. If they "run out" in that sense, or if someone hoards tons of them and doesn't use them, then the beauty of this is that it doesn't matter! Each bitcoin is divisible up to 8 decimal places, so you can only truly run out when 0.00000001 BTC is worth too much to you to spend on what you want. The current client is merely limited to 2 decimal places, but this can easily be changed.
EDIT: "also also, if i lose the wallet- the coins are gone for ever? " -- Yes. You are your own bank here, and that's why it's so important to make sure you back up your wallet.dat file every few transactions. Note that you can make up to 100 transactions between backups if you really want to, but better safe than sorry right?
In both cases, you can use http://www.alloscomp.com/bitcoin/calculator.php to estimate approximately how long it would take you to generate a block yourself at any given hash rate. Try turning the Generate option on for a minute to get a "khash/s" value (then turn it off) and plug that into the calculator to see just how futile it is to try to mine with the standard client at this point. Note that the calculator is using the current difficulty number, and historically the difficulty has mostly risen every ~2 weeks or so.
Just for grins, put "1" as the difficulty factor in the calculator, which is where it was when Bitcoin first began, and you'll see why people got the impression that "Bitcoins = generating free money!" since even a modest computer would solve a block within each hour. But at that time, because they were so easy to get, people only traded them for less than a penny apiece. Now that the computational power of the network has increased, and the difficulty has risen to compensate, each individual coin is worth more (up to today's exchange rate of about $0.80 apiece).
I'm not good at explaining just what exactly "solving a block" means, other than it writes various transactions permanently into the public record, which is immediately updated and sent to everyone else running the Bitcoin client. Thus, running the client by itself doesn't really help secure the network, and neither does attempting to generate blocks without actually solving any. It's the act of solving a block, verifying that all transactions up until that point are correct, that strengthens things.
The current reward is 50 Bitcoins for solving a block, though once we reach a certain point, that number will be cut in half, then half again later, etc which is why there will never be more than 21 million coins. If they "run out" in that sense, or if someone hoards tons of them and doesn't use them, then the beauty of this is that it doesn't matter! Each bitcoin is divisible up to 8 decimal places, so you can only truly run out when 0.00000001 BTC is worth too much to you to spend on what you want. The current client is merely limited to 2 decimal places, but this can easily be changed.
EDIT: "also also, if i lose the wallet- the coins are gone for ever? " -- Yes. You are your own bank here, and that's why it's so important to make sure you back up your wallet.dat file every few transactions. Note that you can make up to 100 transactions between backups if you really want to, but better safe than sorry right?
Quote
FROM: sipa
it contains a built-in miner, which uses your CPU to generate coins.
Mining is currently mainly done using certain high-end GPU's, which are way faster at this than CPU's.
So it uses CPU's or GPU's?
Without knowing its actual speed, I think it is safe to say that generating coins now using that will at least take a few years, sorry if you had your hopes up.
AMD Athlon 64 x2 (2.11 ghz) [Dual Core]
GPU: http://www.nvidia.com/page/geforce_7300.html
PS: could you tell us where you got the information about 50 coins every 6 hours, or that it only requires 1.3GHz of your CPU?
Found it somewhere last night- not sure if I can locate again but if I do I will let ya know.
-----------------
Quote
FROM: eMansipater
you should know right off the bat that you don't need to know anything about mining to use bitcoins.
Mhmm- btw sent u 5 coins. Thnx for the reply.
Because this market is so competitive, you're unlikely to earn much from turning on that option for your CPU--most mining these days is done on high-end graphics cards and returns an income relatively close to the costs involved, such as electricity and time.
So you can use either the CPU or GPU to (GPU being better) to mine?
What BitCoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens--"bitcoins"--as money, like the Iroquois used wampum. Unlike wampum, there will never be more bitcoins, they are impossible to counterfeit, they can be divided into as small of pieces as you want, and they can be transferred instantly across great distances via a digital connection such as the internet.
So there are only 21 million available bitcoins in this network?
What happens when they run out?
What if someone has a majority of these coins and never uses them?
Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world. As an example of how effective the community is at "backing" the bitcoin, at the beginning of this week someone sold 30,000 bitcoins on the largest exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange has fully rebounded and bitcoins are again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trade. The ability of such a small economy (there are only 5 million out of the total 21 million bitcoins circulating so far, or about 3.75 million USD worth at current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins are already working beautifully.
DAMN!! (aka amazing)
This also explains what "miners" are doing--they are processing transactions for the BitCoin network, and securing it against attack.
So basically the people that are running the bitcoin exe are the "miners" which is just a term used to explain that they are allowing the bitcoin network to secure itself threw them?
They do this through working on "blocks" but actually generating a block is quite rare,
So what does it mean to work on a block?
how many coins do you get for generating a block?
and how long does it take to create a block using a great computer setup?
Does that make sense? I'm sure you have lots of questions so feel free to ask away.
U have no idea
Also, you mentioned a key "direct access to their keys." what key exactly?
also also, if i lose the wallet- the coins are gone for ever?
If i take my address from one computer to another (by adding the address with bitcoins to the address i get bitcoins at on another machine?)
Yeah, eMansipater is awesome. We could all learn a thing or two from him about how to treat newbies. Welcome to the Bitcoin forum, humphrey!
Amen, Tiny tip sent to eMansipater for being such a cool guy to new forum members.
Yeah, eMansipater is awesome. We could all learn a thing or two from him about how to treat newbies. Welcome to the Bitcoin forum, humphrey!
eMansipater ftw 
Hi Humphrey,
Don't worry--BitCoin is a complicated technology and it can take a while to wrap your head around just how ingenious it is! The mining and "generating coins" thing is probably the #1 source of confusion for newcomers--you should know right off the bat that you don't need to know anything about mining to use bitcoins.
The idea that computers, or "miners" generate bitcoins is a common misunderstanding compounded by the fact that it's been repeated in trusted sources like the www.weusecoins.com video. This is only true in the sense that a job "generates" income for you--bitcoins do not come from the mining operation. Instead, bitcoins are awarded to miners in a highly competitive market as a reward for processing transactions and securing the bitcoin currency network. Because this market is so competitive, you're unlikely to earn much from turning on that option for your CPU--most mining these days is done on high-end graphics cards and returns an income relatively close to the costs involved, such as electricity and time.
Here is a good summary to help you understand BitCoin in general, by focussing on what BitCoin is and what problem it solves. These two things are not typically well explained on most websites, and it is difficult to appreciate just how effective a technology BitCoin is until they are understood.
What BitCoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens--"bitcoins"--as money, like the Iroquois used wampum. Unlike wampum, there will never be more bitcoins, they are impossible to counterfeit, they can be divided into as small of pieces as you want, and they can be transferred instantly across great distances via a digital connection such as the internet. This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.
Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world. As an example of how effective the community is at "backing" the bitcoin, at the beginning of this week someone sold 30,000 bitcoins on the largest exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange has fully rebounded and bitcoins are again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trade. The ability of such a small economy (there are only 5 million out of the total 21 million bitcoins circulating so far, or about 3.75 million USD worth at current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins are already working beautifully.
What problem BitCoin solves: Mathematically, the specific implementation of the bitcoin protocol solves the problem of "how to do all of the above without trusting anyone". If that sounds amazing, it should! Normally a local currency has to trust all kinds of people for it to be able to work. So does a national currency. And in both cases, that trust is often abused. But with bitcoin, there's no one person who can abuse the system. Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else's coins without having direct access to their keys. People who break its mathematical "rules" simply end up creating a whole different system incompatible with the first. As long as these rules are followed by someone, the only way bitcoin can fail is for everyone to stop using it.
This marvelous quality of not having to trust anyone is achieved in two ways. First, through the use of cutting-edge cryptography. Cryptography ensures that only the owner of the bitcoins has the authority to spend them. The cryptography used in BitCoin is so strong that all the world's online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen. It's like if each banknote in your pocket had a 100-digit combination lock on it that couldn't be removed without destroying the bill itself. BitCoin is that secure.
But the second way of securing the system, called the "blockchain", is where the real magic happens. Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been "paid" to someone else, you could sign over the same coins to multiple people in what's called a "double-spend attack", like writing cheques for more money than you have in your account. Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don't exceed the amount of money you have. Even so, most people won't accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, even if they are kept in a digital form. Not to mention, sometimes a bank employee can abuse their position of trust. And, in traditional banking, the bank itself doesn't have to follow the rules you do--it can lend out more money than it actually has.
The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called "mining". In return for this critical role, the bitcoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule. As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another--again in a highly competitive market to ensure the lowest possible cost. The transactions are verified and locked in by the computational work of "mining" in a very special way that means no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.
This means that no matter where or how you process bitcoin transactions, the network remains secure. Which is incredible--no one else has ever tried to create a system that worked this way! All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks. BitCoin doesn't. This also explains what "miners" are doing--they are processing transactions for the BitCoin network, and securing it against attack. They do this through working on "blocks" but actually generating a block is quite rare, so nobody is earning 50 coins every 6 hours unless they have thousands of dollars worth of mining hardware. In fact, block generation is so rare that most people mine together in large pools to even out the irregularity of the process.
The bitcoin.exe software downloads all blocks off the network in order to have a full, up-to-date record of transactions--this has nothing to do with mining but is just the way the BitCoin network works. Does that make sense? I'm sure you have lots of questions so feel free to ask away.
Your explanation is spot on, but please change this terminology so as not to confuse newcomers. Miners generate blocks, for which they earn coins.
Don't worry--BitCoin is a complicated technology and it can take a while to wrap your head around just how ingenious it is! The mining and "generating coins" thing is probably the #1 source of confusion for newcomers--you should know right off the bat that you don't need to know anything about mining to use bitcoins.
The idea that computers, or "miners" generate bitcoins is a common misunderstanding compounded by the fact that it's been repeated in trusted sources like the www.weusecoins.com video. This is only true in the sense that a job "generates" income for you--bitcoins do not come from the mining operation. Instead, bitcoins are awarded to miners in a highly competitive market as a reward for processing transactions and securing the bitcoin currency network. Because this market is so competitive, you're unlikely to earn much from turning on that option for your CPU--most mining these days is done on high-end graphics cards and returns an income relatively close to the costs involved, such as electricity and time.
Here is a good summary to help you understand BitCoin in general, by focussing on what BitCoin is and what problem it solves. These two things are not typically well explained on most websites, and it is difficult to appreciate just how effective a technology BitCoin is until they are understood.
What BitCoin is: An agreement amongst a community of people to use 21 million secure mathematical tokens--"bitcoins"--as money, like the Iroquois used wampum. Unlike wampum, there will never be more bitcoins, they are impossible to counterfeit, they can be divided into as small of pieces as you want, and they can be transferred instantly across great distances via a digital connection such as the internet. This is accomplished by the use of powerful cryptography many times stronger than that used by banks. Instead of simply being "sent" coins have to be cryptographically signed over from one entity to another, essentially putting a lock and key on each token so that bitcoins can be securely backed up in multiple places, and so that copying doesn't increase the amount you own.
Because bitcoins are given their value by the community, they don't need to be accepted by anyone else or backed by any authority to succeed. They are like a local currency except much, much more effective and local to the whole world. As an example of how effective the community is at "backing" the bitcoin, at the beginning of this week someone sold 30,000 bitcoins on the largest exchange, consuming nearly all "buy" offers on the order book and dropping the price by nearly 1/3. But within a couple of days, the price on the exchange has fully rebounded and bitcoins are again trading at good volumes, with large "buy" offers slowly replacing the ones consumed by the trade. The ability of such a small economy (there are only 5 million out of the total 21 million bitcoins circulating so far, or about 3.75 million USD worth at current exchange rates) to absorb such a large sell-off without crashing shows that bitcoins are already working beautifully.
What problem BitCoin solves: Mathematically, the specific implementation of the bitcoin protocol solves the problem of "how to do all of the above without trusting anyone". If that sounds amazing, it should! Normally a local currency has to trust all kinds of people for it to be able to work. So does a national currency. And in both cases, that trust is often abused. But with bitcoin, there's no one person who can abuse the system. Nobody can print more money, nobody can re-use the coins simply by making a copy, and nobody can use anyone else's coins without having direct access to their keys. People who break its mathematical "rules" simply end up creating a whole different system incompatible with the first. As long as these rules are followed by someone, the only way bitcoin can fail is for everyone to stop using it.
This marvelous quality of not having to trust anyone is achieved in two ways. First, through the use of cutting-edge cryptography. Cryptography ensures that only the owner of the bitcoins has the authority to spend them. The cryptography used in BitCoin is so strong that all the world's online banking would be compromised before BitCoin would be, and it can even be upgraded if that were to start to happen. It's like if each banknote in your pocket had a 100-digit combination lock on it that couldn't be removed without destroying the bill itself. BitCoin is that secure.
But the second way of securing the system, called the "blockchain", is where the real magic happens. Even with top-notch digital encryption, if there was no central registry to show that certain bitcoins had already been "paid" to someone else, you could sign over the same coins to multiple people in what's called a "double-spend attack", like writing cheques for more money than you have in your account. Normally this is prevented by a central authority, the bank, who keeps track of all the cheques you write and makes sure they don't exceed the amount of money you have. Even so, most people won't accept a cheque from you unless they really trust you, and the bank has to spend a lot of money physically protecting those central records, even if they are kept in a digital form. Not to mention, sometimes a bank employee can abuse their position of trust. And, in traditional banking, the bank itself doesn't have to follow the rules you do--it can lend out more money than it actually has.
The blockchain fixes all these problems by creating a single master registry of the already-cryptographically-secured bitcoin transfers, verifying them and locking them down in a highly competitive market called "mining". In return for this critical role, the bitcoin community rewards miners with a set amount of bitcoins per block, taken from the original limited quantity on a pre-agreed schedule. As that original amount gradually runs out, this reward will be replaced by fees paid to prioritise one transaction over another--again in a highly competitive market to ensure the lowest possible cost. The transactions are verified and locked in by the computational work of "mining" in a very special way that means no one else can change the official record of transactions without doing more computational work than the cumulative work of all miners across the whole network.
This means that no matter where or how you process bitcoin transactions, the network remains secure. Which is incredible--no one else has ever tried to create a system that worked this way! All previous monetary systems have relied on trusting somebody, whether it was the king, town hall, the federal reserve, or banks. BitCoin doesn't. This also explains what "miners" are doing--they are processing transactions for the BitCoin network, and securing it against attack. They do this through working on "blocks" but actually generating a block is quite rare, so nobody is earning 50 coins every 6 hours unless they have thousands of dollars worth of mining hardware. In fact, block generation is so rare that most people mine together in large pools to even out the irregularity of the process.
The bitcoin.exe software downloads all blocks off the network in order to have a full, up-to-date record of transactions--this has nothing to do with mining but is just the way the BitCoin network works. Does that make sense? I'm sure you have lots of questions so feel free to ask away.
...Mining is the process of generating coins...
Your explanation is spot on, but please change this terminology so as not to confuse newcomers. Miners generate blocks, for which they earn coins.
I'm afraid you misunderstood some things. Mining is the process of generating blocks, but it is much, much slower than the numbers you give.
The bitcoin executable you can download does a number of things. First of all it manages your wallet (the coins you own), and allows you to send and receive them. Apart from that, it also contains a built-in miner, which uses your CPU to generate coins. Without knowing its actual speed, I think it is safe to say that generating coins now using that will at least take a few years, sorry if you had your hopes up.
Mining is currently mainly done using certain high-end GPU's, which are way faster at this than CPU's. The total number of coins to be earned every day is limited by the system, so the more people are trying to get a share, the less everyone will get. This may sound like a bad idea if you wanted to have some extra income from it, but it's actually a very good thing for the security of the network.
Bitcoin is not about mining, it's about creating an independent currency, which you can buy and sell. However, if you insist on mining, you can join a pool (which can give you very small but much more frequent payouts), or look into GPU mining if you have a fast graphics card.
PS: could you tell us where you got the information about 50 coins every 6 hours, or that it only requires 1.3GHz of your CPU?
The bitcoin executable you can download does a number of things. First of all it manages your wallet (the coins you own), and allows you to send and receive them. Apart from that, it also contains a built-in miner, which uses your CPU to generate coins. Without knowing its actual speed, I think it is safe to say that generating coins now using that will at least take a few years, sorry if you had your hopes up.
Mining is currently mainly done using certain high-end GPU's, which are way faster at this than CPU's. The total number of coins to be earned every day is limited by the system, so the more people are trying to get a share, the less everyone will get. This may sound like a bad idea if you wanted to have some extra income from it, but it's actually a very good thing for the security of the network.
Bitcoin is not about mining, it's about creating an independent currency, which you can buy and sell. However, if you insist on mining, you can join a pool (which can give you very small but much more frequent payouts), or look into GPU mining if you have a fast graphics card.
PS: could you tell us where you got the information about 50 coins every 6 hours, or that it only requires 1.3GHz of your CPU?
I have such a headache...
I have read and watched videos from countless sources but still cannot wrap my mind around the "bitcoin."
What I have so far is:
the bitcoin exe is a program that allows you to send and receive coins (currency) and also generate them, the generation process beguines after the things called blocks are downloaded- once downloaded i believe the program will create 50 coins every 6 hours. and to generate them you must leave the bitcoin application open- the application uses cpu power.
Now when it says it uses the cpu's power- does that mean if i have a 3.5ghz processor it will use (guessing) 1.3 of those ghz leaving the rest of the computer 2.7ghz?
I see a lot of people talking about mining- what is that even about? can you run multiple applications on a machine? lets say if I ran two copies, would that make 100 coins in 6 hours?
im sure I have more questions but I am way to tired to think- anyways thanks for anyone that replies.
I have read and watched videos from countless sources but still cannot wrap my mind around the "bitcoin."
What I have so far is:
the bitcoin exe is a program that allows you to send and receive coins (currency) and also generate them, the generation process beguines after the things called blocks are downloaded- once downloaded i believe the program will create 50 coins every 6 hours. and to generate them you must leave the bitcoin application open- the application uses cpu power.
Now when it says it uses the cpu's power- does that mean if i have a 3.5ghz processor it will use (guessing) 1.3 of those ghz leaving the rest of the computer 2.7ghz?
I see a lot of people talking about mining- what is that even about? can you run multiple applications on a machine? lets say if I ran two copies, would that make 100 coins in 6 hours?
im sure I have more questions but I am way to tired to think- anyways thanks for anyone that replies.
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