Bitcoin, BlockChain For Absolute beginners
Why are non-existent things as concrete as your hard cash?
Yes, the world is moving towards the Etherium smart chain, with all the hype about NFTs, and Play-To-Earn contracts, yet we would have to agree that it all started with bitcoin and the blockchain technology, so to get to the core of the matter, we would need to go back to the basics.
What is blockchain tech and what is bitcoin mining, why are they not going away?
Blockchain technology is a set of codes in databases connected to a network of millions of servers. So one would ask if the bases of blockchain is so… basic, why is it revolutionary?
The answer is simple, Because it is in a network of millions of servers, it isn’t housed in any particular server. It is not under the control of some person, hiding in his parent’s basement, or some big brother corporation with a massive high-tech server room; it is housed in millions of guys’ servers hiding in millions of parents’ basements.
Since No single person owns it, it is impossible to hack or alter the information in the network, It also means that for blockchain to die, one has to shut down all the millions of servers, around the WORLD, all at once.
What is a block?
Blockchain got its name from the visualization of how it operates, BlockChain operates as a database of records that allow people to transact, prove and transfer ownership of stuff. These records are packaged in blocks.
A block is a combination of values (usually nonce, data, and current hash) that helps identify a transaction on a crypto network.
And with the more people transacting, the more the need for computer servers around the world, crunching mathematics, keeping records upon records, and validating people’s claims, these computers carry out that which is popularly called Mining.
what is mining in blockchain?
Mining is the act of using brute force to meet the particular requirements of a block in a crypto network so that a block can be added to a blockchain.
It is the act of using brute computing force to find a nonce that changes the hash value of a block to meet a particular requirement.
For example, a block with
Block id- 1
Nonce- 2345
Data: a monthly ledger of bitcoins
Hash: 1723939933
Now, this is a transaction on a blockchain that has been sent off to the mines, what do the miners or mining pool do?
Using computing force (basically sending in different values with the hope of getting a particular value correctly) the miners compete to find the nonce value which when put changes the hash value to meet a requirement for that specific network. In this example they try different, nonce values to make our hash value begin with 4 zeros that i.e 00001723939933Which brings another question
What’s in it for the owners of the servers?
Another simple answer… whoever gets the right nonce value is rewarded with 1 crypto token or coin, depending on the crypto network. BTC, Etherium, or some crypto coin that depicts value.
So the owners get paid in digital money, how does it have value?
Well, how do your economy, stock market, and exchange rate work? demand, supply, and a lot of GDP mathematics. The mathematics is very simple, if people want what you are producing, it becomes valuable, and the more people want it, the more valuable it becomes.
Now the information crunched per second is accessible on public ledgers. I am no economist, but if a public stock market ledger, allows you to see in real-time, the demand and supply, purchases, and sales history of people in the digital space. It begs the question; does it make digital currencies as “real” as the economic values of our Stock market?
I hope that answers all the basic questions on Blockchain technology and how it works.
share your opinions in the comments below.
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