What Is Blockchain and How Does It Support Bitcoin?
Understanding bitcoin requires quite a bit of work at first. And one of the big questions people have when diving into this space is what supports bitcoin.
The answer to that question is simple: the blockchain.
Now... Explaining what the blockchain is is a bit more complex.
But no need to worry. Here, we will tell you everything you need to know about the blockchain.
What Is A Blockchain?
Bitcoin works through a software system described as an immutable digital ledger. This is called a blockchain.
Metaphorically, you can think of blockchain as a collection of blocks. In each block, there are a ton of transactions. And obviously, each transaction has a certain amount of Bitcoins.
These blocks are ordered through intricate mathematical problems that only supercomputers can solve. The problems are often so complex that they cannot be solved by hand. They are also complicated enough to test even incredibly powerful computers.
The people who sort through all these blocks with these supercomputers are the miners. They, thanks to their high computing power, manage to solve these blocks every 10 minutes. And thanks to solving these problems, they receive bitcoins as a reward.
No one can cheat the system. All the miners do the work on the same blockchain — No one can edit or alter it.
This is what makes the blockchain secure.
Blockchain and Mining: More Complex Than That
While it seems pretty easy in theory, mining Bitcoins is a little bit more intricate than that.
Back in 2009, Bitcoin was still a tiny little baby software. It was underground — not many people knew about it. Back then, it was pretty easy to mine.
Since there wasn’t any traffic in the software, it was easy for someone with a somewhat good computer to do it. In the beginning, 50 BTC were distributed among all miners every 10 minutes.
Nowadays it is a lot harder to mine some BTC as it requires a lot of computing power.
Is Bitcoin Mining Worth It?
If you want to mine Bitcoin, you absolutely can. You don’t necessarily need to be a genius in computing or anything similar.
You just need to keep in mind that it is complicated and you need special equipment. Mining is costly and only sporadically rewarding.
Mining machines need a lot of electricity — which causes a lot of heat coming on from those machines. It requires so much energy that large mining farms are located in cold places like China and Iceland
This generates a myth about whether sustaining the bitcoin ecosystem is bad for the environment. Obviously, a lot of electricity is needed and it leaves a large carbon footprint. But, according to Cambridge, 62% of miners use renewable sources of energy. But that's a myth for another day.
Now, there are bitcoin farms, made by companies that specialize in Bitcoin mining. You don’t need to mine to get your BTC. You can invest directly in Bitcoin and not on the equipment to mine.