Did You Give Up On Bitcoin?

Filed under Bitcoin, Economic
One of the more compelling ideas of Bitcoin is that everyone has a chance to be the Ben Bernanke.  Meaning, everyone has a chance to "print money out of thin air."  The specification of Bitcoin is such that its money supply is "generated" by individuals who run the client on the network in "generate mode."  If you run it long enough, at least for now, you have a chance to produce 50 BTC (BTC is the currency code that stands for Bitcoin).

But if you were attracted to this idea, lately you may have noticed that it has been harder and harder to generate.  The simple fact is, the more people trying to produce, the less of a chance you'll have yourself.  On top of that, there are more people who resort to using their GPUs (graphics card) these days than ever before.  In a matter of months, the opportunity to generate Bitcoins seems to have dried up.

The good news is that there are new opportunities.  If you want to generate, I would like to recommend the Bluish Coder:

This is the group that picked the Bitcoin Remote Pooled Mining application to collect lower powered machines together so they can have a chance to generate.  If you have Windows or Linux (Mac OS X has limited support if you really dig), you can contribute your own CPU time to the mix and get a cut.  It's not 50 BTC, but it's something.

The amount you generate depends on the speed of your system, how long you participate, and how many other users are in the pool.  Yes, the amount is much smaller, but it's much better than nothing.

Of course, just like the carrot of 50 BTC, there's a chance your efforts will not pay off.  But you never know unless you try.  Since the time this pool was established, it generated 2 blocks, which means it distributed 100 BTC, so far, among all those who participated.  But the more people who participate, the smaller the winnings.

The advantage of pooling in this way is that none of the participants work against each other.  If you have two systems churning away on the official client, they are working against each one another by definition.  But in an alternative system like this, none of the systems in the pool do redundant work.

It is even possible to set up your own private pool with this kind of software, if that's what you want.  That way, if you have multiple computers, they would no longer work against each other.  But if you have only two computers to devote to Bitcoin generating, you may not see any results.

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Posted via email from Anthony Martin's Weblog

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6 Comments

  1. FYI, according to doublec, who runs the server for this pool, "Unfortunately running the pooled server is proving too taxing for my VPS host. They keep killing the server due to using too much CPU. sjaak on IRC has offered to host a server on 91.121.29.91 that runs full time on a dedicated machine (rather than a VPS). If sjaak posts here to confirm the offer I plan to turn my server off when it generates the next block (so all the existing contributers haven't wasted their time since the last block). sjaak's new server is currently running if you want to start using it now."

  2. Money is for trading. says:

    Bitcoins are a medium of exchange. The point of bitcoin is to trade. I get frustrated with the obsession with mining and the complaining about how difficult it is to generate bitcoins. That's the point...they're supposed to be hard to generate. People could much more easily obtain bitcoins by offering something for sale on the Internet instead of wasting their energy. Just run the miner in the background and focus on the real purpose for bitcoin.

  3. Yes, I agree with you. But I know several people who have given up on Bitcoin because they cannot generate. Some have tried to trade and had little luck. So this approach can rekindle the attraction for them, perhaps. Whatever it takes.

  4. asdf says:

    "... the more people who participate, the smaller the winnings."
    This is not true. More participants increases the likelihood of generating a block, which means more BTC to spread around.

    "... in an alternative system like this, none of the systems in the pool do redundant work."
    False. There is no redundant work. every node works on different hashes. All hashes are equal.

  5. Re: more people, smaller winnings. You realize, I was talking about a particular instance of 50 BTC being split up after being generated, not the overall chancees of generating at that point, right?

     

    Re: redundant work. Yes, that was explained to me elsewhere. I'll just have to take all'y'all's word for it.

  6. A lot of the specific information like the IP addresses are outdated. Check here to get more up-to-date information:

    http://www.bitcoin.org/smf/index.php?topic=2444.0

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