Quote from: boconniff40 on March 02, 2012, 10:07:00 PM

Quote from: Matthew N. Wright on March 02, 2012, 10:05:11 PM

Quote from: boconniff40 on March 02, 2012, 09:35:11 PM

Considering that we are using up alot of electricity and money up by investing in this e-currency, where does our processing power go?

Can't we use our processing power more efficiently, both by mining coins and helping in university research. I'm sure people should be able to buy up processing power.

University research would be finding solutions to real problems, whereas Bitcoin mining is basically like password cracking. Because of the very specific way that mining is done, there is nothing else it can be used for except heating a room and drying out strawberries.

As for where the processing power goes, as I said, it's just password cracking basically when you dumb it down. Each new block is a new password to crack. The processing power goes into those cracking attempts. The only thing you have to show for your efforts is the bitcoin you (may) find, this is partly what gives the value of the bitcoin. If it costs $4 to mine 1 bitcoin, there is very little chance Bitcoin would drop below that price.

You said it best man. I wasn't aware each new block is like a password to crack.

Yep. First person to crack the right password unlocks all the coins inside, and each transaction that is being done in bitcoin is contained inside that password protected block so once you unlock it, you in turn process the transactions and "confirm" them on the network. This is why it takes time for a transaction to be "confirmed". It's because it takes time for everyone to crack those blocks open.

Quote from: znort987 on March 02, 2012, 10:11:31 PM

Quote from: Matthew N. Wright on March 02, 2012, 10:05:11 PM

Processing Power, where does it go?

For a very general answer to that question, you
should Google this: feynman lectures computations

Fneh! Kindergarten stuff!