Can anyone please explain in layman's terms how cryptocurrency mining works? Not "how to mine" manual, but how is it funded?
Is it companies using mining network to perform their calculations instead of renting server farm (like Folding @ home did)?
Or is it something different?
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miners solve problems
if miner gets lucky w/ correct answer
miner gets reward
>how is it funded?
Along with every block (which gets created and recorded on the blockchain every ~10 minutes), 12.5 BTC is created and rewarded to the miner/pool that solves the problem. It used to be 50 BTC, but this number has been halvened twice since Bitcoin's creation in 2009.
>transactions are encrypted
>the miners decrypt them
>it takes a lot of power because the encryption is retarded and the decryption is like trying every password until one works
>they get coins for doing this
it's a super retarded process
You are mistaken. Miners don't decrypt.
I bet this is used by NSA to crack passwords
also the "passwords" are getting harder with time, at some point it will be unprofitable to mine and memecurrency will crash
Just search on youtube for lots of videos explaining this shit
Its a scam, only retards think they can make money from mining
Actually, they get also all fees for the transactions in block. In future you will still be able to earn something on mining even without bounty.
Why are the coins you get from solving a block worth anything? Shouldn't they hold no value because they were created out of thin air?
Because there are people who believe that cryptopshits are worth something. That's all it takes for something to have value.
Wait, does it get value from people buying it from you. Does it act like a share in the stock market?
I don't actually know how you convert bitcoin into dollars.
There are new cryptos being able to make transfers without the miner figure. its 2 validations for 1 transfer model. so if you need to send money to someone you have to validate 2 transfers from other people. so you pay with processing power.
It's more or less a share without the equity backing.
How did so many people recognise it as a form of currency like cash? Meme power?
Miner's GPU do some maths for the blockchain and the blockchain rewards them with coins.
People will buy it, that's all it takes.
OK, thanks
I think it's more powerful than traditional government backed currencies. The existence of a coin is proof that someone, somewhere, worked for said coin.
Pretty much this. Nothing on earth has intrinsic value, only attributed value.
anybody have that graph of new currency trends that predicted the recent bitcoin price boom?