AMA: Long-time DU lurker and democratic supporter, know everything there is to know about bitcoin

[Rassah]

72. Glad to explain

> I still don't get if "miners" are actual humans, (monitoring/mining) or, is it a software application?

Mining is done by hardware, being controlled by an application. To mine, you need a computer or specialized hardware to generate billions of random numbers a second, to find the "correct" random number. So the hardware is instructed by the software to pick random numbers, and then the software checks if the number is "correct." The software is a specialized application, and is not part of the common-use Bitcoin "wallet." People buy the specialized hardware (it can costs thousands of dollars), set up the applications, and run the mining from home (it can cost hundreds of dollars in electricity bills). At this point, mining is basically done by professionals as a small business, and everyone is competing against everyone else to be more efficient at finding these random numbers.

> And how do I get started? Do I have to pay $ into the system to acquire/obtain bit coins, or am I generating bit coins by essentially leaving my computer on, connected to some sort of bit coin generator/mining site?

Since mining is so expensive and specialized to start with (and since profitability on that business is almost zero), it's not advisable to start mining them. If you were to use your computer, you will burn way more electricity than you will earn in Bitcoin value. So, basically think of Bitcoin as a foreign currency, with the foreign country being "the internet." The easiest way to get them is just to exchange your local currency for bitcoins at one of many online exchanges (if you are in US, the easiest one is Coinbase). You can also offer to sell something for Bitcoin (such as on bitmit.net, which is like e-bay, or through your own business), or work and get paid in Bitcoin. Some new businesses are now set up entirely online, with no country as a base, employing people from all over the world, and paying them all with Bitcoin, so as to avoid any issues with currency exchanges and accounting issues.

To get started, all it takes us to open a Bitcoin account, which is as easy as downloading a Bitcoin wallet to your computer or phone, or opening an online wallet at blockchain.info, and you can receive and send bitcoins. No forms to fill out or personal info to give out. You can even create paper wallets at bitaddress.org. Then you can either buy some coins to add to your wallet on Coinbase, or ask someone for a bit to play around with.