What is Blockchain technology? Why use Blockchain in Bitcoin mining

To a lesser extent, the differences that make Blockchain technology more obvious. Although running on a distributed network , Wikipedia is integrated into the World Wide Web (WWW) using a client - server network model .

Users (clients) have the right to link their accounts to change the content and information entered on Wikipedia stored on a centralized server.

Whenever a user visits a Wikipedia page, they receive an updated version of the 'master copy' of Wikipedia content. Database control with Wikipedia Admin permissions allows access and access is maintained by authorized personnel.

What is Blockchain technology? Why use Blockchain in Bitcoin mining

To mine Bitcoin, users first need to create a Bitcoin Blockchain wallet , which is where your bitcoin data and transactions are stored. The process of creating a Bitcoin Blockchain wallet is also very quick, not taking up much of your time.

Let's start to learn about this technology, what is the application of Blockchain in Bitcoin mining, and is Blockchain-based Bitcoin mining effective or not?

Wikipedia's digital backbone is similar to the centralized database model and database protection model that governments, banks, and insurance companies still use today. now. Controlling centralized databases is a responsibility left to the owner, including managing updates, access, and protecting against cyber threats.

Distributed databases created by blockchain technology have fundamentally different digital skeletons. This is also the difference and the most important feature of blockchain technology.

The original Wikipedia is edited on a server and all users will see this new edited version. In blockchain technology, each network node reaches a similar end point, each updating its own profile, and the most popular profile becomes the official profile instead of the original.

What is Blockchain technology? Why use Blockchain in Bitcoin mining

The transaction is broadcast and each node creates their own version of the update event

It is this difference that makes blockchain technology more useful. It represents innovation in the registration and distribution of information that eliminates the need for a trusted third party to facilitate digital relationships. However, blockchain technology is not a new technology.

Blockchain technology is a combination of tested technologies applied in a new way. It is the special combination of three technologies (Internet, private key encryption and blockchain protocol) that makes the idea of ​​the creator of the digital currency Bitcoin Satoshi Nakamoto so useful.

What is Blockchain technology? Why use Blockchain in Bitcoin mining

The result is a digital interactive system that does not require the support of a trusted third party. The security of digital relationships is considered an 'unknown' - provided by the simple yet 'powerful' network architecture of blockchain technology.

Definition of digital trust (roughly translated as digital trust)

Trust is an assessment of risk between different parties, and in the digital world, determining trust is no different from proving identity (authentication) and proving permission (authorization). .

Or to put it simply, they want to know: 'who do you say you are?' and 'can you do what you're trying to do?'

In blockchain technology, private key encryption provides a 'strong enough' ownership tool to satisfy authentication requirements. Owning a private key means you have been granted ownership.

In addition, private key encryption also helps other users share more personal information than necessary for exchange without this information being leaked or falling into the hands of hackers.

Authentication alone is not enough, it also depends on authorization. Authorization - having enough funds, issuing the right type of transaction (transaction), . requires a distribution network, peer-to-peer is considered the starting point. Distributed networks reduce the risk of centralized servers failing.

This distribution network must also be committed in terms of storage and transaction security. Transaction authorization is the result of the entire network applying the rules for which it is designed (the blockchain's protocol).

Authentication and authorization provided in the above way enable interaction in the digital world without having to rely on trust.

Today, businesses around the world are waking up to the implications of this development – ​​newer and unimaginable digital connections are possible. Blockchain technology is considered the backbone for the transaction layer on the Internet, the foundation of the Internet of Value.

In fact, the idea of ​​encryption keys encourages users to use them to secure and formalize digital relationships. Everyone from government agencies to IT companies to banks are looking to build this transaction layer.

Authentication and authorization are important elements for digital transactions, established as a result of the configuration of blockchain technology.

Why use Blockchain in Bitcoin mining?

Blockchain technology has been thoroughly tested: millions of dollars have been spent on research into blockchain technology over the past few years and ongoing surveys test whether blockchain technology is suitable in various scenarios. Whether a different version has been made or not.

Blockchain technology provides new tools for authentication and authorization in the digital world without having to concern central server administrators. As a result, this technology enables the creation of new digital relationships.

By formalizing and securing new digital relationships, the blockchain revolution is 'launched' to create the backbone of an Internet layer for valuable transactions and interactions (commonly known as the Internet of Value , in contrast to the Internet of Information, uses the original client-server model, accounts and databases that we have been using for the past 20 years.

However, with all the talk about building a digital backbone for a new transaction layer for the Internet, it can sometimes seem that blockchain, private key encryption and cryptography are not the right solution.

Many development teams have created flowcharts to assist an individual or an entity in deciding between a blockchain or master copy, client-server database. Here are some factors:

Flexible data that can be edited over time?

Documents are difficult to forge because they have seals, and documents stored on papers have a certain durability.

However, if the data is constantly changing, if it is a transaction that occurs frequently and continuously, we cannot constantly change the paper records. Manual data entry also has limitations.

So if data and data history are important elements to the digital relationships users are establishing, then blockchain provides flexibility, allowing multiple parties to add new data to the record system. records are kept by many people.

Is the data controlled by authorized personnel?

There are many reasons that a 3rd party should take care of some authentication and authorization. Sometimes third-party control is entirely appropriate. If data privacy is considered most important, there are many ways to protect data even without data connection on the network.

But if the current IT infrastructure of accounts and logins is not enough to ensure digital identity, the problem can be solved using blockchain technology.

Private key encryption allows transactions to be facilitated, without requiring centralized systems and complex accounts used to establish digital relationships. If this database requires millions of dollars to secure financial transactions, blockchain will be a useful solution.

Is transaction speed most important?

Does this database require high performance millisecond transactions? If high performance, millisecond transactions are what is required, it is best to stick with the traditional centralized model system. Blockchains are slow databases and there is a cost to storing data - processing (or mining) each block in a chain. Centralized data systems based on the client-server model are faster and cheaper.

While we cannot know the full limitations and capabilities of blockchain technology, we can at least know the tested use cases of blockchain technology in terms of management and security of blockchain technology. Number relationships are part of the filing system.

If you are planning to start Bitcoin mining, in addition to the concept of Blockchain technology, you also need to pay attention to the Raspberry Pi, a miniature computer that supports extremely powerful Bitcoin mining. There are many different lines, so you need to carefully learn what Raspberry Pi is and how to use it.

Lesley Montoya

Update 15 June 2024