Quote:
Originally Posted by id10t
Yup.
Intense repetitive computation of algorithms against data to produce an un-alterable-after-the-fact ledger of transactions, all decentralized and can be done peer-2-peer (like the *coin stuff) or on a distributed cluster (think a record of stock trades/buys/sells/etc).
Basically the first piece of data is used to create a hash of some type (math operation the data, can take extremely long to calculate. Same technology is used to securely store passwords. With a good enough hash, any data that has a matching hash is also the same data - and no other data will match.
The next transaction logged uses the hash the first transaction calculated as "salt" for its hash - ie, it is added to the data to make it impossible to generate all possible data combinations and then just search for a matching hash to find out the original data (rainbow table - these exist for password attacks, etc).
The third transaction (or Nth) uses the hash the second data (or N-1th) to salt itself and compute its hash, and then N+1 uses that hash to salt itself and so on.
Change any record, and NONE of the other records stay the same.
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If you will humor me with what is probably a dumb question. All this decentralized computing is enabled by the fact that the computer owners are rewarded with whatever curency for doing the heavy lifting. This is the mining process as I understand it. Does this create an issue when we are closer to the fundamental limitation on number of coins and nobody is willing to support the computing costs for the last few coins?