Quote from: kripke on April 24, 2011, 03:25:24 AM

Quote from: gusti on April 24, 2011, 03:09:06 AM

Quote from: kripke on April 24, 2011, 03:01:47 AM

Quote from: gusti on April 24, 2011, 02:56:41 AM

Quote from: Blackasaurus on April 24, 2011, 02:52:50 AM

Pointless? Mining makes money...
Or are you trying to ask how do the coins themselves have worth, like how/where do the people you pay in coins get paid in cash?

No.
The correct answer is that the whole btc network relies on the proof of work made by all the participants, including the miners.
No mining, no bitcoin network.

So what of the difficulty of the task that the miners have to complete? This is artificially inflated for a particular reason fundamental to how the btc network works?

Difficulty is self adjusted by the network, to keep the block generation (and therefore the btc generation) at a regular pace.
But, as total hashrate capacity is bigger, the whole network is more secure, and less likely to be attacked.

So there is is an inefficiency then in that the difficulty is self-adjusted to restrain the rate of block generation? I can understand that proof of work and proof of time is necessary for the whole btc network to work but it seems that making the tasks of proof of work and time more difficult than the ought to be introduces a lot of potentially unnecessarily wasted energy.

If more and more people start mining and btc generation is to be kept constant then say the few dozen mega watts used presently to generate the bitcoins could multiply very rapidly. What I find hard to accept is that this is all self-imposed. Unlike gold mining where extracting ore is necessarily difficult, the generation of BTC is just contingently difficult.

You and BitcoinBonus have eloquently explained why btc network requires proof of work and time but I'm not sure if the way things are set up at the moment is the most efficient method of ensuring a consistent generation of bitcoins and fulfilling the role that mining has.

You want as many miners as possible so the 50% power necessary to attack the network is as large as possible.