Topic: What is bitcoin? (Read 1054 times)

When the software was designed and written, it was decided by the person that wrote the software to use inflation to pay a subsidy of 5000000000 spendable units per proof-of-work bock to anyone that does the work of maintaining the blockchain.  It was also decided that this subsidy would be cut in half every 210000 blocks (truncating any decimals) until there was no longer any subsidy.  It was also decided to name 100000000 spendable units as "1 Bitcoin".


No.  The developers chose to use the standard SHA256 function.  The decision was that the header of the block would be hashed using the SHA256 function, and that the result of the SHA256 function would then be hashed using the SHA256 function.  Then the result of that is compared to the current difficulty target.  If the value is less than the current target value, then the block is "solved" and the miner gets to broadcast their block that pays them the subsidy.  If the value is NOT less than the current target value, then the block is not "solved" and the miner has to change the block header and try again.


Are we talking about Bitcoin?  With Bitcoin, there is a limit.  The first 210,000 blocks are allowed a maximum subsidy of 5000000000 spendable units (often called "satoshis") each , the next 210000 blocks are allowed a maximum subsidy of 2500000000 spendable units each, the next 210000 blocks are allowed a maximum subsidy of 1250000000 spendable units each.  The subsidy is cut in half (truncating any decimal value) every 210000 blocks until the maximum allowed subsidy is 0 spendable units.


Yes.  Supply and Demand.  The value to you (if you are buying the coin) is whatever amount you are willing to pay in exchange for it.  The value to you (if you are selling the coin) is whatever amount you are willing to accept in exchange for it.

The current "market value" is whatever the last amount was that two parties publicly exchanged.

Supply and demand, demon has nothing to do here. 

The coin value is changing all the time based in market movements (buyers and sellers). I'm not an expert, but I believe things here work this way with BTC, without any other interference, only the market and its users (buyers and seller) working by themselves.

Yes but what determine  it? only supply and demon?  how you can know the value of the coin?

I am only answering the last two.
5. It is impossible to mine Bitcoins with GPU or CPU, and this is even going worthless for alts too as more and more machines are getting added to crypto world daily, so change your mind if you are thinking that you can mine because you need to purchase very expensive hardware to mine Bitcoins.
6. Nobody is there to decide as it is based on decentralization and it is us who decide that at what rate we need to buy or sell our coins, which in other words, I would call as "freedom".

It should also be noted that the math gets more difficult, based on the amount of hashing power there are to hash out these calculations. Now that most of your questions are answered about the technical aspect of the math behind Bitcoin, do you realize why this is used? < For instance, Why are coins not simply being generated from thin air without any hashing being done? >

Remember there are no centralized entity to process and validate transactions, so someone should do this. < clue >

It is not just traders who determine the value of the coin but all the users of a certain coin and most of the time the one who can manipulate price is the whales or the people who have a lot of a certain coin. It is true though that price of coins is determined by acceptance, volume, capitalization and index but aside from that news also sometimes can determine price in about days because news sometime can control a user's action.

Very brilliant six question and I do believe they are expert here to answer these questions. But number six which is about who set the price of coins is what I want to answer. From what I have learned from forex and now currencies trading, what determine the price of assets or coins is it acceptability, volume, capitalization and index. That mean the traders determined the value of coin.

According to the creator of Bitcoin:

https://bitcoin.org/bitcoin.pdf

Every software? No. My word processor doesn't have any coins.  My tetris game doesn't have any coins.  My photo manager doesn't have any coins.


Yes. Every software has some sort of mathematics equation. That's how computers work. They use mathematical concepts to create models, and then use maths to manipulate and interact with those models.


Bitcoin uses the hashing problem to provide proof that some work has been accomplished.  This proof-of-work is used to make it effectively impossible for an attacker to modify the contents of the blockchain.  In exchange for this service of securing the blockchain, the bitcoin protocol allows whomever completes the valid work to assigned an amount to themselves that doesn't come from anywhere. The amount that the protocol allows them to assign to themselves is cut in half every 210,000 blocks until eventually the last 0.00000001 has been assigned.

yes, the bitcoin software was created with the math built in, and yes, there's a reward for "mining" which verifies the transactions made through bitcoin. the reward is a small amount of bitcoin. the software was created to be a system of money and transferring it in a secure way.

since we can't ask the people who created the software originally, it's hard to say why. money independent of government perhaps? i'm guessing.

Thank you for your response My friend I asked another question if you know and can help

thank you

Thank you for your response! you answers and explain most of my questions thank you for that!
Regarding question number 1
"It is included in the source code of the software"
The thing I didn't understand is does someone create a software with mathematics equation and for solving them there is a reward for that?
Why do people create this software? does every software have sort of coins or have sort of mathematics equation?

It is included in the source code of the software.


The person that created the bitcoin protocol.  He is (or they are) known as Satoshi Nakamoto.


Are you asking about every bitcoin? Or are you asking about other cryptocurrencies?

If you are asking about other cryptocurrencies (commonly called altcoins), then that is up to the creator of the coin to decide.  Some do.  Some don't.

If you are asking about bitcoins, then yes, the process of mining is always the same.


The calculation for the difficulty is included in the software.


Again I assume you are talking about an altcoin?
Try both.  See which works better.  Or ask someone that knows.

Bitcoin is better with hardware specially designed for the purpose.  This hardware is commonly called ASIC.


The users of the coin decide how much they want to pay to acquire it.

very complicated questions, i'll try to be simple.

the equation is a standard hashing one, SHA256. it's a way to take an amount of data and reduce it to a string of text that can be compared to others. mining hardware are doing the comparison, looking for a specific result.

bitcoin was developed by someone known as Satoshi Nakamoto. they used to post on this forum. we do not know if it was one person, or a group. we do not know if that's a real name. they have disappeared and not communicated without the public at all for some years.

each coin is not unique. it's more like "i have five apples, and send you three." then "i have three apples, and send you two." no one cares which specific apple it is, as long as they are all apples.

the limits of the mathematics relate to how big the numbers used in the calculations are. in simple terms, they are really, really big.

as for your 5th question, i'm not sure, honestly. other people, smarter than i am, figured that out.

the market does. people offer coins for sale at a price they want, and others either buy them at that price, or they do not. the price is adjusted as a result. if the sale price is accepted, the seller moves it higher by a small amount. if it's not accepted, he moves it lower. basic stock market stuff. sort of anyway.

i may be wrong on any or all of the above, but i think i got it. mostly.

Hello everyone!

newbie question I saw this video https://www.youtube.com/watch?v=uike95OzlNk and i didnt understand
they say that mining is solving mathematics equation and every time you solve you rewarded by bitcoin

My question is:
1. from where does come this mathematics equation?
2.who think on this mathematics equation?
3.does every coin have different mathematics equation?
4.how i know the limit of the mathematics equation?
5.how I can know if the coin better to solve with GPU or CPU ?
6.who decide what coin is better or more value?

Thank you for your time!