user64941: Recently I got in a discussion with my brother over what bitcoin is and what mining is. He had never heard of it so I had to do my best to explain it all from the beginning. I had trouble explaining certain aspects of mining though. He only understood Bitcoin from the standpoint of it being disruptive and undermining or potentially destroying the US economy. He saw my actions of mining crypto currency as printing money at home and artificially inflating the US economy. I tried to explain that essentially it is the US economy and other fiat currencies that are the ones printing money and causing massive inflation and that Bitcoin in the long term does not suffer from that problem. I am having difficultly still though understanding the best way to explain to him where the money comes from when I mine, how it is different from printing money. Anyone else out there have a similar experience or know the best way to explain this? 

user74482: Mining serves mainly two purposes:

It prevents Bitcoin from any fraudulent activity as opposed to fiat currencies like double spending or manipulating transaction history. At every transaction level, every network nodes literally check the authenticity of the transaction right from the first transaction to the most recent one. Mining is the reason why no one can "print the money" on his/her will but at consensus will.
Since the reward can only be given to one node, mining is also important to determine the rightful owner of the reward in cases where multiple miners solve the proof of work puzzle. The award is given to the miner whose block is accepted by the major section of the network.

Besides...

As opposed to fiat literally everyone can participate in "money making" by running a full node or joining mining pools. Hence mining also provides an honest platform for money making removing the need for any third party institution.
If a miner somehow accumulates 50% plus hashing power and alters the transaction history mining is the reason you can publicly know about his/her fraudulent activity. As a result either the price of the coin will fall down or other miners will power the right blockchain to make it the longest chain. Hence mining also ensures that no matter what the cheat miner gets nothing even having 50% plus hashing power.
Mining is the reason why a financial institution cannot demonetize or inflate an economy on their will because they cannot control or destroy the network alone.


user85868: Is mining gold creating money? It's called mining because work goes into it. The money that comes out of it is remuneration. When the FED increases (er, eases) money into our system it's done by adding a few digits to an account. There literally is no work that goes into that. I cannot make bitcoin with no work -- that's the primary differentiator. Gold and bitcoin have real work backing them. Understanding would be enhanced by a read through Bastiat's economic sophisms: https://mises.org/library/bastiat-collection . This book is also recommended: https://mises.org/library/mystery-banking

64941: <p>Recently I got in a discussion with my brother over what bitcoin is and what mining is. He had never heard of it so I had to do my best to explain it all from the beginning. I had trouble explaining certain aspects of mining though. He only understood Bitcoin from the standpoint of it being disruptive and undermining or potentially destroying the US economy. He saw my actions of mining crypto currency as printing money at home and artificially inflating the US economy. I tried to explain that essentially it is the US economy and other fiat currencies that are the ones printing money and causing massive inflation and that Bitcoin in the long term does not suffer from that problem. I am having difficultly still though understanding the best way to explain to him where the money comes from when I mine, how it is different from printing money. Anyone else out there have a similar experience or know the best way to explain this? </p>
 74482: <p>Mining serves mainly two purposes:</p>

<ol>
<li><p>It prevents Bitcoin from any fraudulent activity as opposed to fiat currencies like double spending or manipulating transaction history. At every transaction level, every network nodes literally check the authenticity of the transaction right from the first transaction to the most recent one. Mining is the reason why no one can "print the money" on his/her will but at consensus will.</p></li>
<li><p>Since the reward can only be given to one node, mining is also important to determine the rightful owner of the reward in cases where multiple miners solve the proof of work puzzle. The award is given to the miner whose block is accepted by the major section of the network.</p></li>
</ol>

<p>Besides...</p>

<ol start="3">
<li><p>As opposed to fiat literally everyone can participate in "money making" by running a full node or joining mining pools. Hence mining also provides an honest platform for money making removing the need for any third party institution.</p></li>
<li><p>If a miner somehow accumulates 50% plus hashing power and alters the transaction history mining is the reason you can publicly know about his/her fraudulent activity. As a result either the price of the coin will fall down or other miners will power the right blockchain to make it the longest chain. Hence mining also ensures that no matter what the cheat miner gets nothing even having 50% plus hashing power.</p></li>
<li><p>Mining is the reason why a financial institution cannot demonetize or inflate an economy on their will because they cannot control or destroy the network alone.</p></li>
</ol>
 85868: <p>Is mining gold creating money? It's called mining because work goes into it. The money that comes out of it is remuneration. When the FED increases (er, eases) money into our system it's done by adding a few digits to an account. There literally is no work that goes into that. I cannot make bitcoin with no work -- that's the primary differentiator. Gold and bitcoin have real work backing them. Understanding would be enhanced by a read through Bastiat's economic sophisms: <a href="https://mises.org/library/bastiat-collection" rel="nofollow noreferrer">https://mises.org/library/bastiat-collection</a> . This book is also recommended: <a href="https://mises.org/library/mystery-banking" rel="nofollow noreferrer">https://mises.org/library/mystery-banking</a></p>
