Looking for a little more info on cryptocurrency mining like Bitcoins.

[Masonisbetter]

I'm sure it will be obvious once I ask this question that I am fairly uneducated when it comes to computers other than the hardware, so please let me know if this question is, in reality, ridiculous. So I have been looking into the mining of cryptocurrencies, specifically bitcoins and litecoins, but the whole process is just baffling to me. I understand how to do it and have had my computer mining for several days, (not looking for a comment on whether or not this is worth it, I know where I stand on the matter already) but the overall question I keep asking myself is "why?" I have a very limited understanding of what hashing is and how blocking works, mostly what I read on wikipedia, but I can not figure out who the process is benefiting. I'll just use bitcoins as an example. Are the coins actually being generated through this process or is it just recirculating coins people have spent back in to use? Is getting in on mining just a complicated lottery or is my 100% gpu usage actually being used to do work for something? Here comes the part where my lack of knowledge will really show. If I understand it correctly, the GPU is doing calculations that generate a random number, if the number is below a certain threshold then you get bitcoins for your effort. This threshold can be changed to keep the demand for bitcoins the same in the face of the rising popularity of mining. When someone hits one of these numbers and the members of the pool get coins paid out, did the pool generate a block or simply gain the contents of something that was already there? I tried Googling and wasn't able to find much on the matter, although I know this could be due to the fact that I'm not informed enough to know what words to Google. If anyone could give me an explanation or the link to a website that goes in to detail it would be much appreciated!!

 

[bill001g]

It is a race to see who finds the solution to each key first.

It is a total waste of time to even attempt anymore. You will never break even compared to the electricity costs to run your machine. They use custom designed asic chip to do this now.