Mining, can someone explain?

Discussion in 'Videocards vs General Purpose - NVIDIA Ageia PhysX' started by Chess, Jul 29, 2017.

  1. Chess

    Chess Master Guru

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    One question: what do miners produce?

    Huge amounts of energy is used with mining.
    I googled it for a while and all I get is how it works, but the best answer I can get for ' what does it do ' is... "Solving math problems".

    Really? Whose math problems?
    It it like SETI Folding @ Home?
    Are universities curing cancer with the help of miners?

    What is generated, calculated, produced or what service has been offered for the currency they're getting and who pays for it?
    You can't just generate money out of plain nothing, right?

    Someone ? :)
     
  2. Noisiv

    Noisiv Ancient Guru

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    You have already heard most of it, but the concept is so new to you, that you're not willing to accept the answers. Time is needed for the concept to fully sink in.

    For example check out the evolution of this guy. It took him 8 months. Despite being reasonably inteligent

    http://www.businessinsider.com/bitcoins-have-no-value-2013-4
    http://www.businessinsider.com/bitcoin-is-a-currency-for-clowns-2013-11

    http://www.businessinsider.com/im-changing-my-mind-about-bitcoin-2013-12

    and today he says:


    https://mobile.twitter.com/TheStalwart/status/816677932882075648


    The arrogance of the anti-Bitcoin writing in finance blogger circles circa 2012/2013 was really breathtaking.

    And I know, because I made a lot of these arguments from a position of extreme arrogance and overconfidence.
     
  3. Noisiv

    Noisiv Ancient Guru

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    BTW...

    like him, I was also arrogant back then in regards to BTC,
    but because I am very intelligent :) , I quickly sfup, learned more and then rode it :)
     
  4. Chess

    Chess Master Guru

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    Noisiv, You're taking that last line of mine a bit too serious.
    I'm not arrogant. I just don't understand.

    The link you've shown me explained a tab bit about the currency, but didn't answer my original answer, as far as I know.
    I'm not into economics, so I read most of it diagonally.
    I'm a rather eco-left guy that would like to earn enough to live nicely, comfortable and have no interests in getting rich. So educating me in the economics of mining currency is no use, I would fade out quickly. :)
    Call me stupid, I call it selective in my interests ^^.

    So if I may ask my original question again:
    What is generated, calculated, produced or what service has been offered for the currency they're getting. What is the product of thousands of Watts being converted from electricity into heat? This aspect boggles me. I see no product. Am I being ignorant?

    Please don't be offended. I never ment to offend anyone, if I seem sceptic, that's because I'm being sceptic of the financial world in general ^^.
     
    Last edited: Jul 29, 2017

  5. Extraordinary

    Extraordinary Ancient Guru

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    Afaik the mining process is looking for Prime numbers, so basically your GPUs are doing a huge number of calculations searching for them, in combination with others online, or on your own if you choose so
     
  6. Noisiv

    Noisiv Ancient Guru

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    I didn't call YOU arrogant, but myself and that other guy in my 1st post... which apparently you did not read all that well ;)

    Also it seems that I have misjudged you, in the sense that contrary to my belief, you are clueless(i dont mean it as an insult) about crypt currencies

    Go and read about it. Most of the world knowledge is just two clicks away :infinity:
     
    Last edited: Jul 29, 2017
  7. Chess

    Chess Master Guru

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    ExtraOrdinary
    Alright, fair enough...
    Has it any use? :)

    Noisev: I am clueless, which is why I am here, presenting my question ;).
    I guess, because of the bi-polarisation of the GPU consumer parket, I am a bit defensive and jumped to conclusions. I didn't read your post properly, indeed.

    But yet again, it's not about the currencies for me. It's about what mining produces for the people, without diving into crypto currency economics.
    The technical aspect, something goes in, gets processed, something gets out.
    What's being processed and why?

    Thusfar no-one could clearly answer me anywhere ( I've asked in several forums ). Most, like you, tells me to search for it. I am searching for answers, that's why I'm here! Others even answer 'doesn't matter, it makes money'. Occasionally I hear, like ExtraOrdinary: "there's a logarithm being calculated" Fair enough, but with what use?

    See, I'm zoning out again. ^^
    Basically, I need layman's terms.
     
  8. Extraordinary

    Extraordinary Ancient Guru

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    Must be of some use to someone or they wouldn't pay you to find them, if one is found and you're part of a group your bitcoin or whatever payment you get is shared between you, if you find one on your own (unlikely with a single PC now, maybe at the start of the craze you could have) then you get all of the payment

    As for what use finding prime numbers is, no idea

    Last I checked with a single GTX980 and 1000W PSU, it was gonna cost more in electric than I'd have made mining
     
  9. Chess

    Chess Master Guru

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    Just had an answer from HardForums.

    "Long story short, the "math problems" are used to verify transactions are legitimate, and you earn coins for the trouble of solving those math problems"

    So as a miner you provide the service of legitimating the 'book keepers ledger' between the seller and buyer of a product.. Doing this service you earn currency, being BitCoin or other

    This was what I'm looking for :).
     
  10. Extraordinary

    Extraordinary Ancient Guru

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    I don't think that is correct

    Anyone can install Bitcoin's mining software, which then uses the computer's processing power (using the CPU or GPU) to carry out intensive calculations – you can think of it like trying to search for prime numbers. Lots of people might be working on the same unit of work - a computationally complicated problem. The aim is to find a certain sequence of data, called a "block", that produces a particular pattern when the Bitcoin "hash" algorithm is applied to the data. Whoever's computer manages to do that will win bitcoins.
     

  11. nz3777

    nz3777 Ancient Guru

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    How much money would one need to invest in order to (profit) from something like this? I have one guy that has ALOT of money and might be interested if......I can make him see the light but also I do not want to waste his time either.What are we looking at here to set-up a Legit mining buissness and how much $$$? Thank you.
     
  12. Chess

    Chess Master Guru

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    That is correct. I have just simplified it a lot. AND, the explanation video came already very much simplified. But by all means, you're correct.
     
  13. AsiJu

    AsiJu Ancient Guru

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    Mining is the process of excavating rock for ores.




    :p
     
    321Boom likes this.
  14. Chess

    Chess Master Guru

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    Oh dedp00l, you funny mothertrucker ^^

    Oh dedp00l, you funny mothertrucker ^^



     
  15. Noisiv

    Noisiv Ancient Guru

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    $3300 boom!

    :D
     

  16. AsiJu

    AsiJu Ancient Guru

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    #chimichangas

    :p
     
  17. Noisiv

    Noisiv Ancient Guru

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    4k

    BOOM!

    :banana:
     
  18. haste

    haste Master Guru

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    When world economy is rising, pure stocks like BC rise too. Unfortunately, pure stocks are the first ones to get hammered when world economy goes down. There will be a lot of unhappy ppl when it happens and history teaches us, it will... sooner or later.
     
  19. Ssateneth

    Ssateneth Member

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    inb4 complaining about necro.

    In short, yes, the GPU's are doing math. They aren't doing anything useful though. They're just, in a manner of speaking, printing out millions, billions, trillions of lottery tickets in hopes of a winner.

    Longer explanation (Applies to regular ol' bitcoin mining, may apply to other cryptocurrencies to some degree), the mining software takes a tiny amount of data (supplied by a server or local node) related to pending transactions on the bitcoin network, adds a tiny amount of random data to it, and does some math to it. If the result of said math is smaller than a specific number (automatically set by the bitcoin network depending on how fast/slow winning numbers are found), it is a winner and, after you submit the winning answer to the bitcoin network, you receive a specific amount of bitcoins plus any transaction fees paid on the pending transactions.

    The 'winning answer' does not hold any value in itself. There's no finding of prime numbers, or curing of cancer, or finding extraterrestrial life involved. The only reason people are involved in cryptocurrency mining is to make cold hard cash. They mine -> they get some cryptocurrency. Then they can hold onto it or exchange it with people who want cryptocurrency for some cash (or other things of value). The only reason these immaterial coins hold any value is inherent qualities of these coins (just numbers, really), as well as speculation of how they will fare in the future. The primary qualities of Bitcoin was being decentralized, not regulated by any single entity, quick transactions, no chargebacks, and low transaction fees (though in bitcoin's respect, "low fee" doesn't exist much anymore since it's $ value has skyrocketed many orders of magnitude, while transaction fees still require about the same number of bitcoins [originally programmed to be 0.01 BTC but has been lowered a little to better align with today's exchange rates])

    Maybe outside of the scope of the original question, but cryptocurrency mining doesn't 'need help'. Almost all cryptocurrencies periodically self-regulate the amount of 'winners' that can be found in a specific time period. If the target is 2000 winners per 2 weeks but 2000 winners were found in the only 1 week, then the odds to find a winner is reduced. The opposite is true; If the target is 2000 winners per 2 weeks but it takes 5 weeks to get those 2000 winners, then the odds to win is increased.

    When bitcoin was first created and went live, there was a winner in about 1 in roughly every 4 million 'tickets', but computing hardware for bitcoin wasn't very fast (Only your PC's CPU was used, and it wasn't very efficient). Over time, people found ways to use graphics cards, which were much faster and, as bitcoin's value increased, some people put money into designing specialized hardware that was extremely fast. Granted, that's all this specialzied hardware could do is mine bitcoin, but it outshined any other widely available consumer hardware. Now instead of only needing on average 4 million 'tickets' to get a winner (4 * 10^9), now you need, on average, an astronomical 7 sextillion 'tickets' (7 * 10^21). That only applies to Bitcoin though. Other cryptocurrencies may need different math formulas applied, changing their difficulty to win a ticket and/or changing what kind of hardware you can use to mine.
     
    Last edited: Jan 5, 2018
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