Paradigm Shift? Digital Currency 3 - Mining
What the hell is Bitcoin Mining? Getting Technical now, if your a non techie, to avoid an aneurism, shield your eyes and move on:
Bitcoin is a virtual currency that uses SHA-256 (hashcash with minor changes) for the generation and verification of currency.
Proof-of-work (generated by chipping away at the hashcash encryption) is used to protect the network and keep it decentralized with no central authority - rather, processing power becomes votes.
Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks (of encrypted data).
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. No counterfeiting.
Therefore, the block chain serves to confirm transactions to the rest of the network as having taken place. There's your communal Authenication.
You need to invest in specialized hardware, free open source software, join a mining pool and start helping to "chip away" at the mathematical "algorithms" involved in order to generate "proof of work" and new currency.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.
Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Alrighty then, if you say so. More to come.
Paradigm Shift? Digital Currency 4 - Hashcash
Paradigm Shift? Digital Currency - Index
Bitcoin is a virtual currency that uses SHA-256 (hashcash with minor changes) for the generation and verification of currency.
Proof-of-work (generated by chipping away at the hashcash encryption) is used to protect the network and keep it decentralized with no central authority - rather, processing power becomes votes.
Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the block chain as it is a chain of blocks (of encrypted data).
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. No counterfeiting.
Therefore, the block chain serves to confirm transactions to the rest of the network as having taken place. There's your communal Authenication.
You need to invest in specialized hardware, free open source software, join a mining pool and start helping to "chip away" at the mathematical "algorithms" involved in order to generate "proof of work" and new currency.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.
Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Alrighty then, if you say so. More to come.
Paradigm Shift? Digital Currency 4 - Hashcash
Paradigm Shift? Digital Currency - Index
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