Quote from: 2Legit2Bit on September 22, 2011, 05:10:58 PM

Is it just me or do bitcoins and everything that comes with them seem alittle overwhelming at first glance? I am in no way computer savy and so far everything I've read seems chock full of technical jargon. I've seen some guides that are alright and I've a basic grasp of the concept of bitcoins but when I looked into pool mining I was just drowning. Any "for dummies" style breakdown out there?

Anyone else feel this way? What have your initial thougjs been?

OK, first of all, you're right - and that's one of the fundamental problems with the system.

My three year old can understand money. My 40-something year old self took a week to wrap my head (loosely!) around bitcoins, and I'm far from having a deep understanding of it. Nonetheless, it can be broken down fairly simply.

1) Bitcoins can be bought, sold, traded, or used as pseudo-currency to buy things from some vendors.
2) Bitcoins are created at a constant rate (for now), and their movements recordeded, as the result of magical computing.
2a) In other words, Every creation , transfer, buy, sell, etc., of bitcoins is recorded and tracked by magical computing!
3) For mining: Mining is a lottery. The poeple who "win" get 50 bitcoins. Since there is now so much computing power involved, the odds of being the guy who wins (and gets 50 BTC) are miniscule. Thus, people pool their resources and share the rewards when they win the lottery. This is JUST like a lottery ticket pool in the office, where everyone throws in five bucks and you buy 20 times as many tickets, but split the winnings (if any!) 20 ways.

Do you want some bitcoins? First question to ask is why. Second question is how many. Right now, you'd be hard pressed to justify mining them. A good mining video card is going to set you back $400+, and for that much money you could buy close to 80 BTC. How long will it tale you to mine 80BTC with that card? Many many months - possibly a year.

Just for a bit of perspective, I remember when RedHat went public, and a huge number of geeks were outraged that they couldn't buy options at an IPO as the first stock trade of their life. I honestly think that most of the excitement over BTC is that this time, they can get in on the ground floor - or at least on the first or second floor. The real trick is that nobody knows how many stories the elevator will go up before the cable snaps.