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View Diary: The Problem with Crypto-Currencies and Why SolarCoin is Different (124 comments)

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  •  Good Question! Answer: Bootstrapping (0+ / 0-)

    My understanding is that the distribution of SLR that has been going on (via "mining"), is simply to get a trade going in SLR and establish a value for it.

    The "mining" that goes on allows people to set up their computers to do a whole bunch of complex calculations to "find" coins and deposits them in their wallets.  This establishes a supply that is large enough to encourage trade to start in the coin.

    I buy coins from these miners in order to drive up the value of SLR.

    Will that work?  I don't know, no one does.  Nothing is certain, except death and taxes.  I don't expect SolarCoin to eliminate either one of those.

    Ted Cruz: The second coming of Christ, but not Reagan (yet).

    by nuketeacher on Sun Apr 13, 2014 at 11:32:39 PM PDT

    [ Parent ]

    •  The mining portion secures the public ledger of (0+ / 0-)

      cryptocurrencies that uses distributed ledger. As such, it is vital work needed to prevent someone from just creating a "falsified" ledger.
      If you're interesting, look into "Proof-of-Work" algorithm. But in essence, say the block-chain validation is setup such that you need 1 Giga-Hash (1 billion cryptographic hashes) every ten minutes to update the ledger, it means that an attacker (or a group of attacker) need to collectively hash faster than that create a ledger that's, in terms of cryptographic signatures, indistinguishable from the original valid ledger.

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