4 ms·

Umm.... was just thinking, why can't someone set up a EC2 cluster (or a plain old home computer cluster) and get it cracking on this bitcoin generating program

by rick_2047 16y ago

Umm.... was just thinking, why can't someone set up a EC2 cluster (or a plain old home computer cluster) and get it cracking on this bitcoin generating program? I mean they are fast and if this thing ever gains some traction then it will be a huge win. Edit: I would also like to see the list of people using this for actual selling and not donations.

doublec 16y ago
Coin generation rate is tied to the amount of computing resource in the network. So if you bring a cluster online the difficulty to generate coins increases. EC2 machines are a bit too slow to generate coins in a timely manner. Even a cluster of them wouldn't be cost effective.
- rick_2047 16y ago
  So if you bring a cluster online the difficulty to generate coins increases. I don't get it, I thought they were giving a bit coin on the computation power.
  - doublec 16y ago
    bitcoin generation is rate limited such that one 'block' is generated every 10 minutes or so. Generating a block produces 50 coins. As more computation comes on board the difficulty increases to try and keep the average around that.
    - rmc 16y ago
      How do they 'increase the difficulty'?
      - tomjen3 16y ago
        Whomever gets the solution first wins, if there are money people in it, you need more computer power to be the first.
      - arst 16y ago
        Roughly, bitcoins are generated by hashing some metadata about the state of previous transactions together with an incrementing nonce until you find a hash below a certain target value. If other users verify the hash and you were the first person to find one this round then you get some bitcoins. As the computational power of the bitcoin swarm increases, the hash target is automatically decreased, leading to a roughly constant rate of generation.
rmc 16y ago
If you could do this, then you can establish a currency coversion between USD and bitcoins. i.e. "You give me X dollars, i'll spin up my EC2 instances and give you Y bitcoins". This is essentially a forgein exchange rate and you have established the exchange rate. And if you find someone offering USD in exchange for bitcoins, and they give you more USD per coin, then you can use arbitrage to exploit the difference in price and turn this into a magic USD making machine.
- haribilalic 16y ago
  Mt Gox (http://mtgox.com/ http://mtgox.com/) and others let you trade Bitcoins for USD and vice versa. I don't know how much computational power you need to generate a Bitcoin, but the current exchange rate seems to be 1 Bitcoin = 0.280 USD. The few other exchanges I checked out having similar exchange rates.
  - rick_2047 16y ago
    but wtf do you do with these?
    - guelo 16y ago
      He just told you, you can turn them into 28 cents.
doublec 16y ago
There's some places listed here where you can use bitcoins: http://www.bitcoin.org/trade http://www.bitcoin.org/trade There are also other directories and services which you can find in the bitcoin forums.
kiba 16y ago
You would be competing against people with GPU cluster. Plus, you only get a part of the limited bitcoin mining pie.

doublec 16y ago

Coin generation rate is tied to the amount of computing resource in the network. So if you bring a cluster online the difficulty to generate coins increases. EC2 machines are a bit too slow to generate coins in a timely manner. Even a cluster of them wouldn't be cost effective.

rick_2047 16y ago
So if you bring a cluster online the difficulty to generate coins increases. I don't get it, I thought they were giving a bit coin on the computation power.
- doublec 16y ago
  bitcoin generation is rate limited such that one 'block' is generated every 10 minutes or so. Generating a block produces 50 coins. As more computation comes on board the difficulty increases to try and keep the average around that.
  - rmc 16y ago
    How do they 'increase the difficulty'?
    - tomjen3 16y ago
      Whomever gets the solution first wins, if there are money people in it, you need more computer power to be the first.
    - arst 16y ago
      Roughly, bitcoins are generated by hashing some metadata about the state of previous transactions together with an incrementing nonce until you find a hash below a certain target value. If other users verify the hash and you were the first person to find one this round then you get some bitcoins. As the computational power of the bitcoin swarm increases, the hash target is automatically decreased, leading to a roughly constant rate of generation.

rmc 16y ago

If you could do this, then you can establish a currency coversion between USD and bitcoins. i.e. "You give me X dollars, i'll spin up my EC2 instances and give you Y bitcoins". This is essentially a forgein exchange rate and you have established the exchange rate. And if you find someone offering USD in exchange for bitcoins, and they give you more USD per coin, then you can use arbitrage to exploit the difference in price and turn this into a magic USD making machine.

haribilalic 16y ago
Mt Gox (http://mtgox.com/ http://mtgox.com/) and others let you trade Bitcoins for USD and vice versa. I don't know how much computational power you need to generate a Bitcoin, but the current exchange rate seems to be 1 Bitcoin = 0.280 USD. The few other exchanges I checked out having similar exchange rates.
- rick_2047 16y ago
  but wtf do you do with these?
  - guelo 16y ago
    He just told you, you can turn them into 28 cents.

doublec 16y ago

There's some places listed here where you can use bitcoins: http://www.bitcoin.org/trade http://www.bitcoin.org/trade There are also other directories and services which you can find in the bitcoin forums.

kiba 16y ago

You would be competing against people with GPU cluster. Plus, you only get a part of the limited bitcoin mining pie.