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Can anyone explain how Bit Coin works?

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User Info: lightningbugx

lightningbugx
2 months ago#21
First things first. What is currency? Just because a coin is made of gold does not mean it has value. Until recent developments, gold was a completely useless rock. It had absolutely no value. Why is gold good for currency if it is worthless? It is rare and weighs the same as lead. Its rarity makes it hard to add more units, reducing the value of each individual coin. Its weight makes it hard to steal a substantial amount. Beyond that, physical currency is an I.O.U. Its value is based on how much the other person thinks it is worth.

What does cryptocurrency do? Cryptocurrency uses cryptography to identify specifically unique numbers to act as currency. What makes this great? You virtually can't counterfeit it. Whoever discovers a new usable code owns it and can trade it. Someone has to keep track of all known codes and who has them, although. So why processing power? You are sequentially testing possible codes to define how many unique combinations exist for the cryptographic algorithm. Not every possible combination works, and you won't know that until you test each one.

Why GPUs? Back some time ago, GPU manufacturers were concerned about "what if no one needs a new video card". So the various GPU developers researched on how to make their GPUs work for a broader audience so they don't have to rely on the PC gaming community and professional graphics community. And thus GPGPU was born, allowing programmers to use the computational power inside a GPU for tasks other than 3D graphics rendering. What happens if you don't research alternative uses for your products? You will go bankrupt if your primary consumer finds a better product.
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