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Oh dude, I'm surprised at how wrong you got it. First, there's no list of hard problems for the computers to solve, and there's no bot handing problems to them. A computer needs to take a group of transactions that were performed recently, and combine them with a random number, then take it through a one-way algorithm that will result in a number that is unpredictable. This number should be smaller than certain value, and a computer must try many different random numbers in order to get the right result. All nodes of the network know what the upper-limit of this number should be, since it depends on the speed at which the network was able to perform previous calculations. No bot, and no central authority of any kind, it's truly distributed and decentralized. On the other hand, inflation does not make anyone happy. It's the prices that inflate. Your money is worth less. It's the amount of money available in the system that increases by inflation, it's "inflation" of the money supply, or prices. What makes people happy is deflation. It means that the amount of money out there is fixed, so as the economy gets bigger, prices decrease, because money gains value. Some people, particularly those in the elites that control the money supply want to make you believe that deflation is bad for everyone. Your common sense probably tells you otherwise, as well as the economists that follow the Austrian school of economics, as opposed to the mainstream Keynesian school.
Toggle Commented Jul 21, 2011 on Bitcoin at Terra Nova
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Jul 21, 2011