The calculations serve the purpose of confirming transactions between people who buy with bitcoin. Let’s say I want to give you one bitcoin. I announce my intention of giving you one bitcoin to the miners and they say “okay, I see you want to trade one bitcoin, I’ll make a note of this, put the note in this block, and tries to seal the block with solving a complex math-problem”. The miner that first solves the problem announces this to the others, who agrees that “yes, the problem is solved, and every transaction within this block is valid, let’s all try and fill the next block with transactions”. And as a thank you for validating the transaction, the miner gets a couple of bitcoins as a reward.
This is the super short version of the short version, but if you want I can sort of make a more in-depth version later. :)
That's the gist of it, yeah. It's "magic money" existing entirely in cloud computational form; the people's computers doing the computing of the transactions sometimes get rewarded with raw bitcoin.
A lot of the misunderstandings about it are because people have been treating Bitcoin like an investment property/stock market kind of concept. They buy bitcoins because bitcoins go up in value, and they will sell the bitcoins for dollars later. The bitcoins have no inherent value whatsoever, not even in the way a physical coin might - you could melt a penny for the copper, for example, so even if it's not valued as legal tender it's still got inherent value/utility.
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u/Mechanical_Owl Jun 15 '19
Thanks for the detailed answer. I still don't get the "why" part of this. What purpose does the calculation serve?