Bitcoin is a new currency built off "Satoshi Nakamoto's" (alias) 2008 Bitcoin white-paper. Bitcoin provides its users with a way to make peer-to-peer (P2P) transactions without having to use a bank as a mediator. There is no middle man, no corporation backing it, and no one has access to your money, except you. It's decentralized from government, run by the people, for the people.
How does it work then? The Bitcoin program uses cryptographic hashes and hash addresses for everything. The hash addresses are what you can use to send Bitcoin to another peer—just think of them as really long house addresses. Users can have unique hash addresses for every single transaction if they choose. Bitcoin (BTC) is generated by peers who use their computer's processors to crack the cryptographic hashes that Bitcoin keeps. When a hash is cracked, a user recieves 50 BTC, unless they are in a shared mining pool. Since the program is peer-to-peer, it makes it impossible to cheat or fake transactions, because all of the data is stored on the Bitcoin nodes and clients.
Both the cryptographic difficulties and the people who use Bitcoin determine the value, which is currently set at $5 per Bitcoin. Bitcoin has seen prices as high as $30 each.
Tons of places offer Bitcoin exchanges for cash, goods, pre-paid debit cards—even Amazon does cash-back with Bitcoin now. See the Bitcoin site for more details.
Where Is My BTC Stored?
After running a bitcoin client for the first time, the client will create something called a "Bitcoin Wallet", which is where all your bitcoins are kept. From here, cryptographic keypairs are read from the user's wallet and tranformed into bitcoin addresses.
GPU Mining Bitcoin
In this Null Byte, I'm going to show you how to mine Bitcoin using your graphics card, which is a much more suitable hash-cracker, and Bitcoin miner. To do this, you will need a decent graphics card. AMD graphics are superior at math functions, and can mine a lot faster than nVidia cards, so bear this in mind if you decide to shop for one.
Follow the video below to learn how to mine Bitcoin on Windows with your GPU, for those fancy people with CUDA capable drivers and such.
Warnings
- Keep your Bitcoin Wallet safe! This is just like a real wallet. If a thief steals it, they get all your BTC.
Download Links
Using GPU mining, you can seriously rake in some cake and get a piece of that sweet free money. Well, minus the cost of electricity.
Come talk in IRC!
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27 Comments
This is crazy! I didn't know much about Bitcoin before this article. How "legit" is this? I assume that getting currency for nothing isn't "legal."
It's completely legal, it's only cost is electricity, really. I've bought loads of things with Bitcoin, it's completely legit :D.
It's legal now!
http://ia600904.us.archive.org/35/items/gov.uscourts.txed.146063/gov.uscourts.txed.146063.23.0.pdf
I have a completely novice question. I understand bitcoin serves as a currency, but how do you "make money" with it?
Well it is basically free money if you find a way to make your costs (wear/tear & use of time for your computer + electricity) lower than the current trade (cash or otherwise) value of a bitcoin.
When you crack a hash-block with your processors, the Bitcoin network gives you all 50 BTC from that hash-block. That's how you make money ;p. Every algorithm your computer solves makes you BTC. You can even exchange Bitcoin for cash. WonderHowTo should accept bitcoin donations :). I've been investing cash into Bitcoin for a while, and have returned alot more money than spent. It's like a mix between gold and stocks. Buy when it's low, sell when it's high. But the average value of 1 BTC is always rising, and when it drops, it's only for a few minutes to a few days.
" But the average value of 1 BTC is always rising, and when it drops, it's only for a few minutes to a few days"
That's an exaggeration. It's gone up over the long term - but you can sure lose money too if you're speculating. Hopefully it's a little more stable now that the userbase is growing!
If the money is going up over long term, how is it speculating then? That's a fallacy in logic. If the value of 1 BTC drops, people sohuld just hold onto it. It bounces back, it always does.
When New World Order (central government) is commenced, I wonder if this could be the new currency. With all of the global financial failures of banks, government and other financial systems I have to wonder.
The .gov has been trying to regulate Bitcoin, sadly. But it seems as though they aren't budging and it will stay the way it is.
If you are willing to believe in this system, it can be very beneficial. If for example, you don't want to get taxed on extra income or you don't want the govt to track it or know you have it, you can convert that cash to bitcoin. It's like a virtual cayman islands.
So bitcoins doesn't only go one way (from bitcoin to real cash). There are good reasons to go from real cash to bitcoin.
I wonder if you pay with bitcoin for amazon goods do you get taxed? I don't think you do. Maybe that's one way of getting around taxes.
Bitcoin isn't an investment vehicle it is a transactional currency and only the most efficient miners can earn bit coins these days. Your best bet is to use a bitcoin exchange like the new one launching soon at http://cryptoxchange.com
You can do what you please with it, you can invest in it and make money. https://mtgox.com/ has been around for ages, and their pretty awesome :3.
I read somewhere that it could take a computer years to generate 50 bitcoins because there's so much computing power already competing for it. Sounds like a waste of time unless you know what you're doing.
That's why this is a guide on using GPU's! GPU's can crack millions of times faster than a normal processor. Still takes about 2 weeks doing it alone on average :D.
Ah, I see.
I have a nvidia GT 525 ! GB yet it only gives me the same as a CPu would im running an i5 and think thats what actually been doing the mining this last coupel of tims. how can i determine that?
sorry forgot to mention max 8 mhash/s
I have Windows7 64bit system, everything was going smooth but i could not get the Bitcoin path. i mean there was no folder by this name Bitcoin.exe
REname Bitcoin-qt.exe and make sure its in the folder that should fix your problem
You mind i ask what GPU ur using?
So its a better deal to go solo or pool? Alex you should start a pool!
so please correct me if i am wrong ... You need a GPU running for 2 weeks , and if cracks the hash , you recieve 50 BTC ?
How much knowledge do you need to do this ? Do you let the pc running for all this time ? and why does it cost so much electricity ? i am new to all this and could really need some advice ...thanks in advance !
I am very new here. I just heard about this from a couple of friends at work. I saw the video but it tell me nothing on where the btc are stored except in wallet. Where is this wallet and how to I access to exchange for cash or products?
Can you do this on an Intel 3000 Integrated Graphics. (If this is a newbie question, don't get angry at me)
You can mine bitcoin with anything basically, but it might not be effective at all. On a guess, your built in Intel card probably won't cut it, but I know nothing really.
Instead of storing/trading/setting up bitcoins, you can just use www.eobot.com and they will pay you in cash for the same thing.
Hi alex, i have a problem. And many question, can u give me a direct way, to ask you my questions? Pls pls
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