How To Mine Bitcoins
Adam Rifkin stashed this in Bitcoin
Stashed in: Software!
John Biggs writes:
Think of it as work done by groups of people to find large prime numbers or trying keys to decrypt a file. You can read a lot more about it here but just understand that for every block mined you get 25 coins or, at current rates, $4,722.25. Currently a single bitcoin is valued at $188, an alarming result that is probably caused by money movements related to Cyprus and a general bubble-like excitement over the platform in general. In fact, many wager that the DDOS attacks on many bitcoin-related services are direct action by hackers to inject instability in order to reduce the price.
As it stands, mining solo is very nearly deprecated. The process of finding blocks is now so popular and the difficulty of finding a block so high that it could take over three years to generate any coins. While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual bitcoins are worth.
Net net he did a bunch of work running a bunch of software to make $1.50 this weekend.
Pooling your resources means everyone gets a cut.
75 cents a day might not sound exciting, but just wait till Bitcoins are worth 1000x their value today.
Seems like a pyramid. The people who saw this early on are making a lot of money now.
Everyone else is chasing dreams.