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Every person who has not yet learned about Blockchain technology and Bitcoin starts out completely mystified.  If you have experienced that, remember that you are not alone.  Imagine the early days of the internet and trying to learn how that worked: domains, web addresses, search engines.


Revolutionary technologies require us to do a little homework to build a new frame of reference.  Eventually, even if we may not know how all the internal gears turn, we adopt the technologies that make our systems better.

This is Blockchain. 

This is Bitcoin. 

Learn on.


The Blockchain

A blockchain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions.


The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.

One key difference between a typical database and a blockchain is how the data is structured. A blockchain collects information together in groups, known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.

A database usually structures its data into tables, whereas a blockchain, as its name implies, structures its data into chunks (blocks) that are strung together. This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled, it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact timestamp when it is added to the chain.​


Bitcoin Mining

Bitcoin mining is the process by which digital transactions are verified and added to a digital, public ledger known as a “blockchain.” This process is an essential service and the backbone of the payments system for blockchain networks like that of Bitcoin. Without mining, the network cannot support transactions or transfers.


To validate transactions on the network, miners must expend massive amounts of electricity to solve complex computational problems for the right to create a block. This verification process is conducted by special purpose ASIC computers (Application-Specific Integrated Circuits). This is the process known as “mining.” 


How are miners paid? Coded into the Bitcoin protocol is the miner “incentive” system whereby arms-length mining operators are rewarded for their validation efforts in both a predetermined and variable number of Bitcoin (currently 6.25 Bitcoin plus +BTC transaction fees) for each block created. This incentive system is commonly referred to as the “block reward.”


The Bitcoin protocol also incorporates a self-regulating governor known as “network difficulty,” designed to moderate block creation time (and thus, the supply of new Bitcoin) in response to changes in network computing power. Network difficulty adjusts every 2016 blocks, varying the complexity of the computational problem in order to target an average block creation time of 10 minutes. As more miners join the network, the amount of computing power required to mine a Bitcoin goes up and vice versa.


Mining or Trading Bitcoin

We chose to become part of the infrastructure.

It is important to understand that there are different ways to be involved with Bitcoin, in addition to using Bitcoin as your currency. Bitcoin can be mined (or created/produced), and Bitcoin can be traded like stocks and other currencies.  These two different paths to be a part of Bitcoin have different risks and rewards.

Mining Bitcoin involves using special software to solve math problems to earn Bitcoin. This can be a great way to make a passive income, but it requires a lot of upfront investment and technical knowledge. On the other hand, trading doesn’t require any specialized skills or equipment, and all you need is some spare cash and an internet connection.

However, trading also carries more risk than mining. If you don’t know what you’re doing, you could easily lose your entire investment. On the other hand, mining will always be profitable if you’re willing to invest in equipment and electricity.

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