Does Bitcoin mining serve any purpose other than rewarding the people with the best mining equipment?
It seems that free Bitcoins are given to whoever can mine the fastest. Is that it, or is there any benefit brought about by mining?
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Possible duplicate - Assuming I actually understand the question properly... – David Perry Nov 01 '13 at 16:56
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Short answer: No. Mining is reimbursing people for providing the proof of work needed to secure Bitcoin transactions against double spends. Without mining, nothing would stop someone from spending the same Bitcoins more than once. – David Schwartz Nov 03 '13 at 01:21
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I think it might be more along the lines of What is the rationale behind bitcoin mining? – Murch Nov 03 '13 at 09:41
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Good question. I have the same question but unfortunately seems like this is not the place to get this answered. People on this site are lost in the technical details of bitcoin mining. – mindlessgreen Dec 26 '16 at 22:08
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The initial mining revenue was those who created the system and early adopters experimenting.
You have to remember at this time they were worth very little. many of those coins may have been deleted, sold or spent at a much lower value.
The risk to reward ratio was much larger, many thought they would not be worth anything. Your calling this money because millions of people have now given trust to the system. Back when it started currency from a game like World of Warcraft would have been considered more valuable.
The only reason people with "good computers" got coins is not because they had those computers, it is because less people were actively trying to accumulate bitcoin, making it easier for any computer to do so.
MaxSan
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Nearly everyone who bought specialized mining hardware (whether it be GPUs, FPGAs and now ASICs) would have done better simply buying bitcoins with the money instead. A few did get more than 1 bitcoin back per 1 bitcoin worth of investment in hardware -- it happen to end up such that those who speculated on the right mining hardware vendor that actually wasn't all that late in shipping happened to be the ones who earned more (in terms of XBT/bitcoin revenues) than the cost of hardware, electricity and operating costs.
Either way, Bitcoin solves a problem in how to have a decentralized system of money with no authority. The problem you are describing, ... allocation of a resource equally, doesn't exist in nature. Bitcoin is a protocol, with issuance modeled to be similar to what history has yielded as the leading natural form of money (gold).
Stephen Gornick
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1The equality problem is not the issue im addressing here, what i want to know is why is bitcoin worth anything, what am i doing to get it? What is the value in mining? Is there a real world porpuse to mining other than just working as a lottery? – Fernando De Souza Martins Nov 03 '13 at 00:13