Quote:
Originally Posted by Slava
I don't know what you mean by "mining" and really only have a limited understanding of this whole fad, but the reality is that the value is supposed to come from supply and demand. What's stopping someone from counterfeiting these though? Or producing more? I get that the difference is that with fiat money someone can just produce more and devalue the currency, so what's stopping that here....someones word?
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Without getting technical, these cannot be counterfeited and are produced at a rate of exactly 1 block every 10 minutes, regardless of how much computing power is being used to 'mine' them. A block varies in its results, always decreasing. For example, a couple years ago, it was 50 bitcoins reward to solve a block, but now it is 25, it will reduce again at some point, based off the difficulty.
To make a real long story short, you mine a block my doing extremely complicated cryptographic calculations on your PC/device and if you get the right answer, you get a reward (which is currenlty 25 bitcoins). To put things in perspective, on my PC, if I mined constantly I could reasonably expect (on average) to mine a block every 5+ years. Because of this, people used pooled miners for the most part now, where they break the big complex problem down into parts and let a whole bunch of people try and solve it at once, and then split the reward among them.