Quote:
Originally Posted by HarryD
I have been watching this and have a question. You "mine" for bit coins by solving mathematical puzzles. Who owns the puzzles (and solutions) and why are they willing to pay for them? To my paranoid mind, there is a whole other story about the why of this and I suspect it is not necessarily a benign thing.
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the mathematical puzzle is inherent in the transaction process. basically, every server of bitcoin tries to find the unique solution to where all the bitcoins transacted in the last time slot go. and all the fractions etc etc. as soon as your server has found that, it transmits that, which all the other server check, and if it passes, then you get a fraction of a bitcoin. this is how the bitcoin transation system is considered safe ... everyone in the system verifies its accuracy.
its a pretty cool system. its just even more fiat then fiat currencies. i have no idea why all the precious metal folks don't see that.