mining for bitcoin
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Started by frey_1999 - Feb. 14, 2018, 8:17 p.m.

Can somebody explain how this works 

I'm a admitted cryptocurrency newby ( and uninformed )

but I am struggling to understand how this works.

have been reading on this and it seems that it takes a lot of electricity and time to mine these bitcoins.

question i have  --

1)  who decides where they are and what the cost of mining them is ?

2) are they preplaced at certain locations ? and you have to spend the money to get them ?

3) going forward do people know were they are and can they Move them?

4) will people only mine them if they are at certain price levels ?

why do I keep thinking this is some kind of ponzi scheme  

By mcfarm - Feb. 14, 2018, 10:42 p.m.
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this post answers many questions

By frey_1999 - Feb. 15, 2018, 4:03 p.m.
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I know you used your complete capacity of thought to help move this discussion forward.

By joj - Feb. 14, 2018, 11:30 p.m.
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Bitcoins could easily be mined by a single personal computer about 10 years ago when they were worth pennies.  My 18 yr old nephew with nerdy computer skills had no notion of the future of bitcoin when he contemplated buy a high powered computer when bitcoins were worth $5 a bitcoin.  He thought it would be a cool way to get a computer for free.  But now they require greater and greater computer power as their scarcity becomes ever more acute.  Computer power taking up warehouses are now required.   But there is a finite number of bitcoins that will be mined.  It is approximately 21 million of them as I understand it.  

There primary attraction is that they are outside the powers of government.  Young people no longer trust governments around the world.  Governments print money rather than impose fiscal discipline.  Regulations short of banning them may even enhance their longevity.   

It is possible that the whole thing falls apart, but I think cryptocurrencies are here to stay.  As Robert Schiller said:

"If bitcoins are in a bubble, then gold has been in a bubble for 5000 years."

By frey_1999 - Feb. 15, 2018, 4:32 p.m.
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Thank your for your response 

I think I worded my question incorrectly

I understand most of what you answered -  the things I question is 

somebody at sometime had to place these coins to be mined, I would assume the used a computer program to do it so if they wrote the code for the program then they can much more efficiently mine the bitcoin and once the price gets high enough they get the last 2 Million bit coin @ 20K each seems like there is an incentive to rig the system. unlike gold where the entity that place the gold where it is has no incentive to rig the system.

I have read in more than one article that there is a suggested finite number of bitcoin available ( your 21millionish ) number is quoted but that the system more than likely allows for adding bitcoin to it ?

I understand that attraction to bit coin - avoid IRS and taxes, lack of faith in government money, ability to transfer wealth in illicit trade, convince, and the general anti government angle along with many others I would guess. but know we hear of the North Korean's being able to hack the bitcoin exchange and are stealing bit coin and with out any government backing no real desire of governments wasting time pursuing this theft.

but your answer did provoke me to look up info on bit coin and block technology I found this article interesting but maybe because I was looking for problems with bitcoin and not reasons to jump into bitcoin.

the article below hints at the fact that somebody even if for only a short period of time managed to counterfeit a very large number of bit coin.

again thanks for you response


By bear - Feb. 15, 2018, 4:36 p.m.
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-saw an article recently about bitcoin mining in iceland.  lots of cheap geo-thermal power there.  

and the atmosphere is cold,  which helps to cool all those computers.

supposedly there is more power used in iceland for mining bitcoin,  than for regular household purposes.  

-i saw another article that said the total cost for mining bitcoin was about 1,000 bucks per bitcoin,... by the time you 

pay for the electricity, the computers, the labor, etc.   

-sooner or later, as in all mining,  the product will go below the cost of production.