Bitcoin News

A blog post by David Perry (@KJ6CCZ) gives a thorough explanation of how mining works without any of the specific details that “might scare the non-techies”. Excerpts:

“Core concepts and terms:
“Hash - I tell you that I added two numbers together and the result was 14,862. Given only that number there’s no way you could tell me what two numbers I added to get that total, but it would be easy to reproduce my result if I asked you to add 3,608 and 11,254.
Block - Transactions are bundled up into big chunks of data called blocks. These blocks are linked together in such a way that each one proves that the block before it was valid.
Difficulty - Ensures that [Bitcoin’s] math problems are hard enough that it always takes the combined efforts of all the miners around 10 minutes to solve a block.”
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“The more miners there are, the higher the difficulty goes. The higher the difficulty goes, the harder it is to commit fraud on the Bitcoin network.”
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“Sudden changes in the value of a bitcoin can make or break mining operations. Granted if a drop in price knocks some miners out of the picture, difficulty will decrease to accommodate, but that takes time. Miners follow the market - the market does not follow the miners.”

 - http://bit.ly/Q3v5i9
 - http://news.ycombinator.com/item?id=4488047 (Additional comments)

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