Since it's not physical like gold or silver you don't need mining equipment, you should just be able to create infinite copies. So why does bitcoin need to be "mined" and why would mining it cost so much energy?

  • Segorinder [any]
    ·
    4 years ago

    The idea of crypto is that, for any particular transaction, there are a few people who would directly benefit from fraud, but they’re vastly outnumbered by all the regular crypto users who aren’t affected one way or the other by the transaction, and just want it to be recorded and processed accurately.

    Since it’s not feasible, not secure, and not private to try to keep track of all the people that use crypto, the way that the protocols decide what version of a transaction is approved by the indifferent masses is with ‘proof of work’. The coins have algorithms to mathematically prove how many hours you left your computer grinding away at menial calculations, and whichever listing of a transaction has the most processor-time (carbon in the atmosphere) behind it is considered official.

      • Segorinder [any]
        ·
        4 years ago

        It's not just the richest person, you have to control the majority of global processor power. The assumption is that, even at the top, where people have warehouse sized rigs, there's supposed to be enough conflicting interests that no one would be able to coordinate a majority. It still could theoretically happen though.

        In hindsight, people would be able to see that fraud had happened, but the transaction would have gone through.

      • meme_monster [none/use name]
        ·
        4 years ago

        No you are describing 'proof of stake' where the man with the most crypto coins gets to dictate which transactions clear. Proof of work means the man with the most graphic cards makes this decision, how he acquired all those graphic cards is immaterial.