So, anyone following the BitcoinCash drama?
So, anyone following the BitcoinCash drama?
Yeah, wow... So much uncertainty. I can't help but believe that (a) uncertainty is hard on financial instruments; (b) the debates behind the split are so technical that most people will conclude something is wrong with bitcoin that's beyond me to understand and it needed to be fixed but they can't agree on how.
And so headlines in branded business pubs will read like this:
What do you think?
Yes, this is pretty much it. It just goes to show how immature that whole field is, and how all of it is in early early days of just throwing stuff against the wall to see what sticks.
Cryptocurrency tech is cool, but still has many problems to work out before it begins to fulfill the promise of state-free, worldwide, cheap financial system. Besides the technical problems, much of the drama stems from personal conflicts that drag the whole field down, like in this particular case.
A whole lot of people will have to lose a whole lot of money before we get to the promised crypto-land.
Does someone have a link for me to understand the differences between bitcoin, cryptocurrency, block chain and bit coin mining?
I've read a bit on this stuff but it's confusing for a neophyte, especially when i don't feel like spending hours and hours reading about it. Seems to me they have to get the ridiculous waste of energy mining problem solved before this goes full on mainstream.
A 10 second explanation: Bitcoin is a type of cryptocurrency which uses mining to securely chain blocks of transactions into a, well, blockchain.
Or, in a few more seconds:
Cryptocurrency is a name for decentralized ledger system used to tally participants' holdings. In other words, a system to reliably note who has which amount of particular currency. The twist is that cryptocurrencies rely on cryptography (basically, math) to ensure ledger veracity and prevent forgery and cheating. Unlike, for example, banks which you have to inherently trust, with 'cryptos' you just need to have trust that the math is sound, there is no central authority that decides on the truth.
Bitcoin is one such cryptocurrency. There are many others, but Bitcoin is the first popular one, and the one most people invested in.
Blockchain is a type of ledger that some cryptocurrencies use. The name comes from the fact that ledger consists of a series of blocks, which are cryptographically chained so that each depends on all the others before it, ensuring that they none are modified and, thus, that you can trust what is encoded in them. Blocks consist of a bunch of transactions (wallet X sent amount Y to wallet Z) that are themselves cryptographically signed, ensuring their veracity. All of blockchain data is public, enabling anyone to check that the cryptographic data is sound (that is, cryptographically proven to be correct).
So when I say "I'll send 2BTC to you", you don't have to trust me, you just have to observe the blockchain and monitor if the transaction of 2BTC from me to you appears in it. The ledger itself ensures that I actually have 2BTC to send (by going back down the chain and looking up the state of my holdings). There are other types of ledgers, blockchain the most popular one.
Mining is a process of producing new blocks of transactions. Bitcoin uses a process called Proof Of Work, which is basically a bunch of computers trying to guess a very large number. Whoever guesses the number, gets to produce a new block of transactions, and gets a reward for it (reward is a certain amount of BTC).
BTC mining is hugely wasteful, but the waste is actually the point of it. That sounds kind of silly, but it serves the purpose of preventing fraud. In order to produce a block, you need to do the work. Once you succeed, further work is based upon the work you just completed. That ensures that whoever would like to change (forge) something in the block you produced, they would need to duplicate that work. And not only that, but also all the other work that comes after it. New blocks get produced all the time, which makes it very hard for the attacker because a single attacker would need to perform more work than all the rest of the participants. And that ensures the data stays reliable.
Your point that this waste needs to be solved before this goes fully mainstream is a very good one. There are actually other types for block production that use other types of securing the blockchain against fraud. None of them have been successfully deployed globally so far, but there are a few promising contenders. Which will win out in the end remains to be seen.
Hope this cleared up the situation somewhat.
That is the best explanation I have ever read about cryptocurrency & blockchain. You have a future like Randall Munroe's if you want it. 👏
Oh no, I could never make it as simple as he does (a huge fan of XKCD here). :-)
I appreciate the time it took to write that reply. THANK YOU!!