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Explain Like I'm Five Bitcoin Mining

Explain It Like I'm Five - Bitcoin Mining Difficulty Level | Newsbtc

Explain It Like I'm Five - Bitcoin Mining Difficulty Level | Newsbtc

The Bitcoin difficulty level recently increased by 7.09% recently. What is difficulty level and why is is important? Bitcoin is probably the first decentralized, distributed open source digital currency protocol to gain massive adoption. No sooner the concept of digital currency was introduced by Satoshi Nakamoto in his whitepaper, it garnered a lot of interest from computer scientists and cryptographers. Some of these people had already tried creating a digital currency system with limited success. But Bitcoin offered a solution to many problems that were faced by the researchers until then. These very solutions were the reason for Bitcoin to become one of the widely adopted digital currencies in the world till date. The main intention behind the creation of Bitcoin was to empower individuals by providing them with an alternative way to conduct peer to peer transaction over the internet without having to go through the middle men or a trusted third party like banking and financial institution. In order to fulfill its purpose, the digital currency protocol has to meetcertain criteria. Apart from being scarce, fungible and highly divisible, it is important for bitcoin network to maintain consistency. Consistency of the network takes a special place because of its distributed nature. We all know that Bitcoin is an open source, decentralized digital currency where the miners, who are part of the Bitcoin community contribute processing power to discover new blocks and confirm transactions over the network. This is done by comparing the transaction ids with the existing record on the blockchain and inserting the new transaction records into fresh blocks. Technically, the time taken by a miner or a mining pool to discover a new block is directly proportional to the total pro Continue reading >>

Explain A Bitcoin Hash To Me Like Im Five

Explain A Bitcoin Hash To Me Like Im Five

Last updated on March 18th, 2015 at 10:40 am You may have heard the term hash or SHA-256 , but what do they actually mean ? In order to decide which block of transactions will be entered next to the blockchain some sort of contest is held between the miners. They all get a riddle to solve, but you cant actually solve this riddle logically you have to guess the answer. Imagine that you are a Bitcoin miner , and each time you want to enter your block into the blockchain and get a reward you would be given a combination lock and would need to guess the combination in order to enter your block. Now lets say that your computing power or hash/rate is the number of combinations you can guess in a second. So the more computing power you have the faster youd guess the combination. Since the Bitcoin network wants to keep the time between blocks created in the blockchain constant, as more miners or computing power are added to the network it will become harder to guess the combination. Just imagine that as more and more people try to guess the combination you will be given locks with more possible combinations. A hash is just a method used to guess the combination for the lock. Its used by turning a random large number into a smaller number by taking certain actions. so for example lets say that each time you guess the locks combination you would randomly pick a large number and take the first, middle and last numbers from it. If this doesnt work you will randomly pick a different large number and guess again. Of course the miners calculations are much more complex but the idea is that you decide on a certain method of action for guessing and execute it until you get the answer. The SHA-256 or secure hash algorithm 256, is just a specific way of hashing. The same way we could hav Continue reading >>

Monero Eli5 (explain Like I'm Five) - A Super Simple Explanation Of How Monero Works

Monero Eli5 (explain Like I'm Five) - A Super Simple Explanation Of How Monero Works

Monero ELI5 (Explain like I'm five) - a super simple explanation of how Monero works Monero is digital cash. Its like Bitcoin, but your activity is kept confidential. Everyone stores their funds using a software application called a Monero wallet. Each wallet has its own receiving address. You tell other people this address so that they can send you funds. When someone sends you funds, you cant tell who sent it to you (unless they want you to know). Similarly, when you send funds, the recipient wont know it was you that sent it, unless you tell them it was you. Because the movements of funds are kept private, no one can tell how rich anyone else is. This is very different from Bitcoin, where everyones wealth and the people theyve transacted with are a matter of public record. Moneros privacy is important to prevent others from knowing how rich you are and to prevent them from spying on how you spend your money. It also keeps your business transactions confidential from competitors. Since Monero is untraceable, you do not have to worry that any funds you receive are tainted by anything suspicious the previous owner did with them. Monero has no central point of authority. When you send funds to someone, a worldwide network of computers will come to an agreement among themselves that ownership of the funds has passed from one anonymous person to another. This means Monero cannot be shut down by any one country or authority. The network of worldwide computers that verify and agree that transactions have taken place are called miners. The reason they are called miners is that they are rewarded with a small amount of funds in exchange for the work they do to verify transactions. The shared global record of transactions is called the blockchain. To get started with Monero, al Continue reading >>

The Bitcoin Scaling Debate Wyre Blog

The Bitcoin Scaling Debate Wyre Blog

So if youre coming to read this, its most likely because youve been hearing a lot about Bitcoin fork Blocksize Increase Hard Fork Mining Threshold Bitcoin is dead Bitcoin is about to break etc The purpose of this article is to help you understand the broad strokes of the discussion and give you a solid starting point to dive deeper with your own research. Ive written it in very casual language because hopefully thats simpler to digest. Background On The Bitcoin Blockchain (Example purposes) In the Bitcoin protocol, which is a blockchain, these blocks are essentially clumps of transactions that all get put together and archived/confirmed into the network. Imagine a block being just like an excel spreadsheet tab With 1000 rows. If you get to 1000 rows, in order to keep recording transactions, youve got to open a new tab thats got another 1000 rows. This is just like new blocks in the blockchain. The blocks are the new tabs in the excel file. Bitcoin network can process ~7 transactions per second Bitcoin network is popular, so people are sending >7 transactions per second. Transactions get backlogged when everyone is looking to use the network (whether for practical reasons, or people spamming lots of meaningless little transactions to fill those rows in the spreadsheet and force others to not get their transaction in a block). In order to make sure your transaction doesnt get backlogged you increase your miners fee (Most default to 0.0004 every transaction with bitcoin, ~$0.35c). This basically is the equivalent of tapping the bitcoin miner on the shoulder (the people who verify your transaction/essentially delivering to your counter-party) and saying Hey! If you can let my transaction through before everyone, Ill pay you a little bit extra for it. Increasing the miners Continue reading >>

Can Someone Explain Mining Like I'm 5 Please? : Bitcoin

Can Someone Explain Mining Like I'm 5 Please? : Bitcoin

Do not use URL shortening services: always submit the real link. Begging/asking for bitcoins is absolutely not allowed, no matter how badly you need the bitcoins. Only requests for donations to large, recognized charities are allowed, and only if there is good reason to believe that the person accepting bitcoins on behalf of the charity is trustworthy. News articles that do not contain the word "Bitcoin" are usually off-topic. This subreddit is not about general financial news. Submissions that are mostly about some other cryptocurrency belong elsewhere. For example, /r/CryptoCurrency is a good place to discuss all cryptocurrencies. Promotion of client software which attempts to alter the Bitcoin protocol without overwhelming consensus is not permitted. Trades should usually not be advertised here. For example, submissions like "Buying 100 BTC" or "Selling my computer for bitcoins" do not belong here. /r/Bitcoin is primarily for news and discussion. Please avoid repetition /r/bitcoin is a subreddit devoted to new information and discussion about Bitcoin and its ecosystem. New merchants are welcome to announce their services for Bitcoin, but after those have been announced they are no longer news and should not be re-posted. Aside from new merchant announcements, those interested in advertising to our audience should consider Reddit's self-serve advertising system . Do not post your Bitcoin address unless someone explicitly asks you to. Be aware that Twitter, etc. is full of impersonation. Continue reading >>

Blockchain, Bitcoin, And Ethereum Eli5 (explained Like I'm Five)

Blockchain, Bitcoin, And Ethereum Eli5 (explained Like I'm Five)

Crypto, Products, and other Random Thoughts Blockchain, Bitcoin, and Ethereum ELI5 (Explained Like I'm Five) Blockchain is a ledger of transactions that everyone owns and contributes to. Bitcoin is a digital currency with a fixed supply built on blockchain technology, and has a few nice features that people like so they give it value. Ethereum is a platform that lets anyone build "decentralized applications" on top of their blockchain technology, and runs on its own currency called Ether. There's lots to learn in this post. To help you remember, try my app Harvest : Take Notes and Learn Passively. You can write or highlight any notes, save them, and automatically receive reminders on an optimal learning schedule. It started with Bitcoin: the first mainstream digital currency that exploded into popularity in 2013, when the price of a single Bitcoin (BTC) went from $10 to over $1000 at its peak. Over the next year, BTC's steady decline back, losing 75% of its value to $250, was equally as tumultuous. Bitcoins are digital coins that only have value if people give it value; this means that if no one would trade you anything for a Bitcoin, then it would be worthless. So why do people give Bitcoin any value? In short, Bitcoins are scarce (there will only ever be 21 million of them). Scarcity means that no central authority, like the US government for US dollars, can create more coins to inflate away your current Bitcoin value. People (called "Miners") earn Bitcoins by helping verify Bitcoins that are sent have not already been sent elsewhere (via the blockchain ), which also means that once we reach the 21 million limit, sending Bitcoins will cost more Bitcoins (usually a fraction of one) as a fee paid to Miners to keep them working. Bitcoins are fast to transact in (sending Continue reading >>

What Is Bitcoin Mining - The Most Basic Guide For Beginners

What Is Bitcoin Mining - The Most Basic Guide For Beginners

Lastweek a friend of mine asked me to explain Bitcoin mining to him in a way that a five-year-old would understand. That is when I realized that there would be so many out who dont yet understand the concept of Bitcoin mining. For starters, Bitcoin mining is an energy-intensive process of introducing new Bitcoins into the ecosystem. You can think of it for a moment as new currencies creation by different governments around the world. But unlike the governments, Bitcoins supply is fixed and regulated by the laws of mathematics that are practically impossible to break. Also, it is not as simple as banks printingnew currency notes. Instead, a lot of work, energy intensive, and cost acquiring is carried out before producing a single Bitcoin, which is called proof of work. Also, considering the fact that Bitcoin is based on the blockchain technology, Id recommend you to thoroughly understand the conceptof blockchain. Because if the term blockchain is alien to you, this guide might not be of great help to you. The Ultimate Guide To Understanding What A Blockchain Is? Before diving into how Bitcoin mining works, I recommend you to watch this short video on Bitcoin mining to get an overall picture of what mining is. As stated in the video, unlike printing of the fiat currency by central banks, bitcoins are mined on the Bitcoin network. Think of it like gold mining but on the internet. And just like gold mining is cost and energy intensive, Bitcoin mining too is intensive because it is rare and limited by the design of its own protocol. Also, just like gold miners, Bitcoins are mined by Bitcoin miners and this mining process introduces new Bitcoins in the ecosystem. Introduction of new Bitcoins happens when Bitcoin miners mine a valid Bitcoin block successfully thereby earningt Continue reading >>

How Does Bitcoin Mining Work?

How Does Bitcoin Mining Work?

By Euny Hong | Updated October 17, 2017 — 3:51 PM EDT Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining has a magnetic draw for many investors interested in cryptocurrency. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1848. And if you are technologically inclined, why not do it? Well, before you invest the time and equipment, read this explainer to see whether mining is really for you. We will focus primarily on Bitcoin. (Related: How Bitcoin Works  and our helpful infographic,  What is Bitcoin? ) By mining, you can earn cryptocurrency without having to put down money for it. That said, you certainly don't have to be a miner to own crypto.  You can also  buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms that pay its users in crypto. An example of the latter is  Steemit , which is kind of like Medium except that users can reward bloggers by paying them in a proprietary cryptocurrency called Steem.  Steem can then be traded elsewhere for Bitcoin.  In addition to lining the pockets of miners, mining serves a second and vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically "minting" currency. For example, as of the time of writing this piece, there were about 16 million Bitcoin in circulation. Aside from the coins minted via the genesis block (the very first block created by Bitcoin founder Satoshi Nakamoto himself), every single one of those Bitcoin came into being because of min Continue reading >>

Explain Like I'm Five: How Does Mining Secure The Bitcoin Network? - Buttcoin - The P2p Crypto-currency For Butts.

Explain Like I'm Five: How Does Mining Secure The Bitcoin Network? - Buttcoin - The P2p Crypto-currency For Butts.

Buttcoin burger , flipper , piles of literal garbage , secure 7 Comments Have you ever wondered how Bitcoin miners secure the Bitcoin network? It takes a bit of skill, a bit of ingenuity and a bit of amazing magic to secure mans most important invention since agriculture. Something Awful forums posterrjmccall breaks it down for us in simple terms even us non-bitcoiner dummies can understand: look, its simple. you have a Happy Burger brand fast food establishment, and sometimes kids come in and want their Happy Burger brand Happy Kiddy Burger, which according to the Happy Burger brand franchise operating instructions is supposed to be 4oz of usda utility grade hamburger lightly grilled and pressed into a poppy seed bun with two slices of mild pickle and a slice of tomato and a piece of iceberg lettuce and the name of the kid written on the top in half an ounce of Happy Burger brand special sauce about which the less said the better so naturally what you do is, you post an ad saying, cooks wanted, please bring your own grill and meat and bun and pickle and tomato and lettuce, well supply the sauce and you get an applicant, and you send him down to the Hall of Cooks, which is a featureless infinite plane that you keep in the unlit basement of your Happy Burger brand fast food establishment. and you tell him to just keep making burgers and handing them up, and if he hands up a burger that satisfies your standards, youll pay him a bonus, which is $100,000, plus the price of the burger, which is $.50 now the cook cant see too good down there, and he keeps handing up burgers that are more like pickly meatballs with a swastika painted on the side in tomato sauce, but as long as the meats cooked the health department wont shut you down, so you keep taking them and dutifully han Continue reading >>

How Bitcoin Mining Works - The Economist Explains

How Bitcoin Mining Works - The Economist Explains

AS THE bitcoin price continues to fall, sceptics have started to wonder what will happen to the industry underpinning this digital “crypto-currency” . Around the world, hundreds of thousands of specialised computers have been built to create (or “mine”) bitcoins and, in the process, validate transactions and protect the system. How does bitcoin mining work? The aim of bitcoin—as envisaged by Satoshi Nakamoto, its elusive creator—is to provide a way to exchange tokens of value online without having to rely on centralised intermediaries, such as banks. Instead the necessary record-keeping is decentralised into a “blockchain”, an ever-expanding ledger that holds the transaction history of all bitcoins in circulation, and lives on the thousands of machines on the bitcoin network. But if there is no central authority, who decides which transactions are valid and should be added to the blockchain? And how is it possible to ensure that the system cannot be gamed, for example by spending the same bitcoin twice? The answer is mining. Every ten minutes or so mining computers collect a few hundred pending bitcoin transactions (a “block”) and turn them into a mathematical puzzle. The first miner to find the solution announces it to others on the network. The other miners then check whether the sender of the funds has the right to spend the money, and whether the solution to the puzzle is correct. If enough of them grant their approval, the block is cryptographically added to the ledger and the miners move on to the next set of transactions (hence the term “blockchain”). The miner who found the solution gets 25 bitcoins as a reward, but only after another 99 blocks have been added to the ledger. All this gives miners an incentive to participate in the syste Continue reading >>

Bitcoin Mining Explained Like Youre Five: Part 1 Incentives

Bitcoin Mining Explained Like Youre Five: Part 1 Incentives

Bitcoin Mining Explained Like Youre Five: Part 1 Incentives Oh hey there! So Ive finally given in to peer pressure and started a blog. A number of people have told me that I have a knack for explaining complex topics in a way that is easy to understand. I guess well see if theyre right. These first few posts will be about Bitcoin mining. Ive explained it in-depth to several newbies before, but have never written anything for a general audience. Hopefully, these posts will serve as a nice educational resource for beginners. In part 1 we will take a look at what Bitcoin mining is and how it makes this digital currency tick. Given that Bitcoin has been around since 2009, its easy to take this process for granted, but you shouldnt! The incentive structure built into the system is a masterpiece of innovation and its definitely worth reviewing. If you think you have a handle on the general overview, feel free to skip over to part 2 where well discuss the technical side of mining and how the network is secured from attack. Dont worry, you dont need to be a computer scientist to understand the technical side. Bitcoin is surprisingly very accessible, and these are ELI5 posts after all. So lets begin. As you may know Bitcoin was developed by Satoshi Nakamoto (whoever he is) in 2008. Bitcoins claim to fame is that it is the worlds first decentralized digital currency. Not the first overall digital currency, but the first one to solve the problems associated with decentralization. What problems may that be? Its fairly easy to use standard cryptographic tools, like digital signatures, to prove ownership of something. I can prove I own one bitcoin by presenting a valid digital signature. I can also sign over ownership of that bitcoin to you by attaching your bitcoin address to it be Continue reading >>

Explain Like Im Five: Bitcoin

Explain Like Im Five: Bitcoin

Its a fungible unit of value exchange backed by computer processing power and cryptographic proof-of-work. Its kind of like money powered by computers. Bitcoin is the first viable form of electronic money that doesnt require a trusted third-party to function. Okay. Lets say you buy a book from Amazon with your credit card. What actually happens is that you give Amazon your credit card details and they ask your credit card company for some money. Some time later you pay your credit card company and your credit card company pays Amazon (minus a small fee). The credit card company acts as the trusted third party in the transaction. You dont actually magically beam money from yourself to Amazon. Good question, Im glad I asked me that. If you pay someone 5, it leaves your possession and enters theirs. The proof is obvious (theyre holding it). Thing is, its mighty inconvenient to sit on bundles of cash (not to mention the risk of theft). So most people give their money to a trusted third party to look after. Right! We trust the banks to keep our money safe. Technically were lending it to the bank (and the bank pays interest on the loan). The interest banks pay on deposits isnt much because deposits are supposed to be kept safely away from risk. Less risk = less return. This works nearly 100% of the time. Ask anyone with a savings account in Cyprus about what happens the rest of the time. Yeah, probably. But lets say you have an indestructible, unbreachable safe and put all your money in there. 10 years later you take it out again. Do you have as much money as you put in? That depends on how you value money. In purely numerical terms yes you do. You put 1,000 away, you take the same 1,000 out again. But measured in terms of buying power, you might have a lot less. The decreas Continue reading >>

Bitcoin - Simple English Wikipedia, The Free Encyclopedia

Bitcoin - Simple English Wikipedia, The Free Encyclopedia

digital cash system and associated currency unit Bitcoin is a digital and global money system (currency). It allows people to send or receive money across the internet, even to someone they don't know or don't trust. Money can be exchanged without being linked to a real identity. The mathematical field of cryptography is the basis for Bitcoin's security. A Bitcoin address, or simply address, is an identifier of 26-35 alphanumeric characters, beginning with the number 1 or 3, that represents a possible destination for a bitcoin payment. Addresses can be generated at no cost by any user of Bitcoin. For example, using Bitcoin Core, one can click "New Address" and be assigned an address. It is also possible to get a Bitcoin address using an account at an exchange or online wallet service. There are currently two address formats in common use: Common P2PKH which begin with the number 1; e.g.: 1BvBMSEstWetqTFn5Au4m4GFg7xJaNVN2. Newer P2SH type starting with the number 3; e.g.: 3MXknxVapwv6QkMoQv99MBuXZ2XpPewHn9. One of the differences between using bitcoin and using regular money online is that bitcoin can be used without having to link any sort of real-world identity to it. Unless someone chooses to link their name to a bitcoin address, it is hard to tell who owns the address. Bitcoin does not keep track of users; it keeps track of addresses where the money is. Each address has two important pieces of cryptographic information, or keys: a public one and a private one. The public key, which is what the "bitcoin address" is created from, is similar to an email address; anyone can look it up and send bitcoins to it. The private address, or private key, is similar to an email password; only with it can the owner send bitcoins from it. Because of this, it is very important that Continue reading >>

Still Don't Get Bitcoin? Here's An Explanation For Five-year-olds

Still Don't Get Bitcoin? Here's An Explanation For Five-year-olds

If you still cant figure out what the heck a bitcoin is, this simple explanation for a five-year-old may help you ... Were sitting on a park bench. Its a great day.I have one apple with me, I give it to you. You now have one apple and I have zero.That was simple, right? My apple was physically put into your hand.You know it happened. I was there, you were there you touched it. We didnt need athird personthere to help us make the transfer. We didnt need to pull in Uncle Tommy (whos a famous judge) to sit with us on the bench and confirm that the apple went from me to you. The apples yours! Icantgive you another apple because I dont have any left. I cant control it anymore. The apple left my possession completely. You have full control over that apple now. You can give it to your friend if you want, and then that friend can give it to his friend, and so on. So thats what an in-person exchange looks like. I guess its really the same, whether Im giving you a banana, a book, a quarter, or adollar bill Now, let's say I have onedigitalapple. Here, Ill give you mydigitalapple. Ah! Now it gets interesting. How do you knowthatdigital apple which used to be mine, is now yours, and only yours? Think about it for a second.Its more complicated, right? How do you know that I didnt send that apple to Uncle Tommy as an email attachment first? Or your friend Joe? Or my friend Lisa too? Maybe I made a couple of copies of that digital apple on my computer. Maybe I put it up on the internet and one million people downloaded it. As you see, this digital exchange is a bit of a problem.Sendingdigitalapples doesnt look like sendingphysicalapples. Some brainy computer scientists actually have a name for this problem: its called the double-spending problem . But dont worry about it. All you need Continue reading >>

Explain It Like I'm Five !

Explain It Like I'm Five !

I'm new in this domain, i wanted to mine from my personal computer, i've tried too many wallets, but none of them start mining, i need an algorithm or something like that , i don't know how to activate it , i've got a code " setgenerate true -1 " that i should copy to my console to start mining but nothing happened. If anyone has some knowledge or some kind of experience, i need help ! you should be aware that it is likely that you wont make any profit at all, if you mine using your PC. Can you walk me through that, i didn't understood why ? Unless you have access to cheap electricity and state of the art hardware, the only way you can make money mining these days is if the coin you are mining appreciates dramatically, in which case you would have been better off just spending the money investing directly in that coin and sitting on it instead of mining. you should be aware that it is likely that you wont make any profit at all, if you mine using your PC. Can you walk me through that, i didn't understood why ? Many thousands of people began mining and then started buying big rigs with graphics cards and all sorts of things to scale their mining operations. One pc will most likely not have the computing power to mine anything as you will be competing with these mining farms. So if you want to mine for profit you must invest into more than just one standard PC The previous poster is saying if you spend $10 a month on electricity running mining on your computer you will get less than $10 in cryptocurrency so you may as well buy $10 of which coin you want to mine rather and save your computer from burning power. When mining your computer will get hot and run at full speed. (If you live in a cold place maybe this is ideal and you can heat your home to offset the money spent Continue reading >>

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