We are experiencing the golden age of technology where its advancement has been faster than ever. Computers and coded programs have never been more sophisticated, and this sophistication has led into a new kind of currency – cryptocurrency.
In 2009, Bitcoin became the first ever decentralized cryptocurrency. To get started, what exactly is a cryptocurrency? To put it shortly, cryptocurrency is a form of digital currency that uses cryptography as its security to protect it from nefarious activities. It only exists in the digital world, but can be used to conduct transaction outside its virtual domain. And Bitcoin is one of its many forms.
What is Bitcoin?
As said, it is a form of cryptocurrency. “Can I use it to buy something?” Yes, indeed. “Is it safe?” It sure is. “How?”
To better understand what Bitcoin, let’s list some of its most common jargons:
• Blocks – whenever someone makes a transaction in the Bitcoin network, the network gathers these transactions in that specific time and turns it into a list. This list is called a block.
• Blockchain – the long list of blocks that comprises a general ledger.
• Miners – as these blocks are collected by the Bitcoin network, someone needs to verify and place them into a general ledger. This someone is called a miner. Miners are also responsible for taking the info from the block and apply a mathematical formula unto it. Turning it into a hash.
• Hash – the result when information from a block goes through mathematical formulas which consist of seemingly random letters and numbers.
Let’s Go Back to “Is it Safe?” Question
What makes Bitcoin secure is how the general ledger works. When a hash is created from a block, it takes information from the previous block and incorporates it into the next hash. That means that each hash consists some of the data from the block before it making a unique timestamp of hashes every time since the general ledger is chronologically updated based on the last transaction that was made.
If anyone tampers with it, everyone would know because the general ledger is transparent. Faking a transaction by tampering with a block will be known since they could just check the authenticity of the block by running the hash function on it.
Another reason why it’s safe is that it is decentralized, meaning no single entity controls it. People are at ease that their money isn’t handled by one single authority.
The above information is just the tip of the iceberg with regards to the information about Bitcoin. Other factors are involved if you’re keen in making a profit out of mining this cryptocurrency. Computer software and hardware are being sold left and right that will help you hash data faster.
You’ll need to sink quite a bit of an investment if you’re serious on this venture as well. Moreover, safety such as fire hazards, keeping room temperature and your miners at a reasonable temperature, and preventing circuit overload should also be considered.
With all this being said, there are a lot of people in the Bitcoin community, as well as in the cryptocurrency, suggesting that mining can indeed churn quite a bit of a profit. It’s only a matter of being familiar with what currently works and self-educating yourself on the other aspects involve in mining cryptocurrency. Some even said they’re just at it for fun and to be a part of history.