bitcoin

SpringWater

SpringWater

Member
Could someone explain to me the idea behind this? I get it, you get a computer and waste energy to get some virtual currency, but what is the purpose behind
all of this? Why would anyone do it?
 
^That.

It's not backed by anything. Seriously, it's virtual currency. It's worthless, the markets just don't realize it yet because it's the cool new trendy fad.
 
Its not NEAR as simple as that. I reccomend reading some articles on Bitcoin, why ask here when Googles there?
 
I did google it but I couldn't understand how a virtual currency can be worth it, but I guess the answer is that it just is and there is not really a way to explain it. I also didn't understand how you can get bitcoins by "mining" which I still don't get... it's like making money out of nothing.
 
Your GPU "Mines" the bitcoins. A single bitcoin can take quite a while to mine though. One bitcoin is worth X amount of dollars, and the price of one bitcoin fluctuates just like the value of a dollar changes regularly.
 
imsati said:
^That.

It's not backed by anything. Seriously, it's virtual currency. It's worthless, the markets just don't realize it yet because it's the cool new trendy fad.
Click to expand...

I don't know that it's worthless. It's worth what people will give you for it, kind of like other currencies, or goods/services.

And even a backed currency isn't really backed. The commodity that it's backed with fluctuates in value as well.
 
I should try this 'BitCoin mining' on my 5870 - apparently it's one of the best cards for mining, only beaten by it's big brother, the 5970. ;)
 
I looked into it briefly a while ago. My conclusion was that unless you have a high end GPU or a dedicated card to do the mining, the cost of the energy consumed doing the mining will exceed the value of the bitcoin.

Also, as more and more Bitcoins are mined, they become less scarce which causes their value to go down. It's kind of a virtual pyramid scheme where the people at the top of the pyramid make money while the people at the bottom lose out. Eventually the pyramid collapses.
 
voyagerfan99 said:
It was one of the best cards.
Click to expand...

Yeah, still a waste of time and power though - probably. :P

I don't really like the idea of having my PC on for hours a day (and overnight) with hardware running at 100% or close to that. Also, if my PC is running at 100% or close the whole time I'm using it, it really limits what I can do with it. :/
 
I don't run my computer overnight unless I need to. The fans keep me awake. It's on for a good 16 hours or so a day. I BOINC so that's what it does most of the time during the day when I'm not using it.
 
Bitcoin is a currency, obviously. Just like USD and the likes. But the reason Bitcoin is such a big deal is because its the first of its kind, a completely digital currency. You might think of PayPal as a digital currency, but it isn't as it has the backing of real currencies unlike Bitcoin. Bitcoin is a crypto currency, meaning its completely anonymous.

For how the economy works, check out the Bitcoin wiki. Here's a quote:
Where does the value of Bitcoin stem from? What backs up Bitcoin?
Bitcoins have value because they are useful and because they are scarce. As they are accepted by more merchants, their value will stabilize. See the list of Bitcoin-accepting sites.
When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. Bitcoins, like dollars and euros, are not backed up by anything except the variety of merchants that accept them.
It's a common misconception that Bitcoins gain their value from the cost of electricity required to generate them. Cost doesn't equal value – hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn't make anything valuable. For example, your fingerprints are scarce, but that doesn't mean they have any exchange value.
Click to expand...
https://en.bitcoin.it/wiki/FAQ#Economy

For mining, the concept is somewhat simple. Regular people with computers mine blocks. Blocks are what contain every bitcoin transaction. To confirm a transaction, when you send or receive money, the info gets put in a block. After 6 or so blocks, that info will be mined out, and your transaction will be confirmed, so the money that got sent to you will be yours, or the money that got sent to somebody else, he/she will receive. The way its setup is to where people don't mine for nothing, otherwise people wouldn't mine. Instead, you get a reward. It was 50 coins originally, now its 25. It halves every couple years. This serves two purposes. One, to give you a purpose to mine. Another, to get more bitcoins in circulation.

Bitcoin mining has been warped and a lot of people think of it as a way to make money. But its much more than that.
 
Cromewell said:
I don't know that it's worthless. It's worth what people will give you for it, kind of like other currencies, or goods/services.

And even a backed currency isn't really backed. The commodity that it's backed with fluctuates in value as well.
Click to expand...

Yes, but tangible currency is backed by actual commodities (gold, silver, palladium, etc).
 
You get the virtual currency by allowing a program to use your GPU...

In return:
- You have spent money on a dedicated GPU
- Wasted more money on energy costs
- You open your computer to viruses as the program you download to mine with
- Invested in an unstable internet currency


That's my view on it anyways.. The creators and early users have it good though as the price of 1 bitcoin went from just pennies to $600-1200 in a matter of a few years..

Millions of dollars have been made, and lost at the same time. It's a small stock exchange. It's based on predictions and usage.. :p
 
Last edited:
imsati said:
Yes, but tangible currency is backed by actual commodities (gold, silver, palladium, etc).
Click to expand...

Actually it isn't for most countries (the US included). The US dollar hasn't been gold backed for years. It's a fiat currency like many others.
 
Cromewell said:
Actually it isn't for most countries (the US included). The US dollar hasn't been gold backed for years. It's a fiat currency like many others.
Click to expand...

This seems to be what everyone forgets.


As for mining... Not worthwhile to mine bitcoin on gpu anymore IMO, can profit on scrypt based currencies like litecoin since there aren't any ASIC'S out for them (yet) but soon enough gpu mining won't be worth it there either. Both of my 290X's paid themselves off mining litecoin, feathercoin, and dogecoin fwiw.
 
You must log in or register to reply here.
Back
Top