It means that (as of February 2022) miners earn 6.25 BTC for every mined block and that by 2024 they will be making only 3.125 BTC. This process is called "Bitcoin Halving" and every ~4 years rewards are cut by half. The number of Bitcoins earned decreases over time. Why would you do all this work? Why people would want to help?Įvery mined block automatically rewards the miner with some bitcoin. ![]() □ Why miners help the Blockchainīut still, how the hell can you get people to contribute? I mean. It forces miners to be honest and (implicitly) punishes those who aren't. That's what makes Bitcoin and Blockchain an awesome combination. Bad actors are inevitably isolated from the Blockchain If a malicious miner is trying to insert invalid blocks or even remove a block from the Blockchain, he's rejected by all due to the consensus of the network! Attempting to modify the Blockchain is a waste of time and effort. Include in this question many different people I don't know, and an even bigger amount of money and this question gets even more obvious. ![]() If you gave me $10,000 to deliver it to your friend □ Why Blockchain and Bitcoin are secure? Instead of a single entity, we have many different entities that communicate between themselves, they're in charge of checking whether John has enough balance, and if he does, they're in charge of moving the money straight to Mary. Decentralized authorities communicate between themselves to validate ![]() In simple words: "Mining" is the process that allows people to use bitcoin as a decentralized currency and that incentivizes people to collaborate. Since Bitcoin proposes to be completely decentralized (thus we can't have a single central authority) it needs to create a way so people collaborate and replace the need for banks. Attempt to detect frauds and block them.Validates you have enough balance to send money.Inevitably there's a central authority (the bank) that makes things happen: A central authority is in charge of validating and moving money Let's analyze first how the economy works with banks. That's what allows people to send and receive bitcoins. Here're the entities Block and Transaction we're creating for the scope of this article: Blockchain Entities See as Python Code □ from dataclasses import Transaction:īitcoin mining is what keeps the network consistent and working. If you're interested in knowing more, I'll be happy to make a part two, and implement transaction details, validation, and some cryptography (yet again, interactively!). We're assuming that every transaction is legit and needs no more than "from who", "to who" and "how much". I'm going to abstract how transactions are validated, so we can focus on the blockchain itself. Since the blockchain is public and open, you can check and see the genesis block here (or any other block really). What makes it special is that it's not tied to any real previous block, that's the only and unique exception to the Blockchain. The first block ever is called the Genesis Block □, it's a special block with a single transaction (50 BTC to Satoshi Nakamoto). In our example above it's fine to say that the block of height 1 is also the block of hash 6b86. The hash is long and complex while height is quite easy since it's just the block number in the chain. A chain of blocksīlocks can be identified by two means: height or hash. It literally manages a chain of blocks, and each block contains many transactions. It’s a public ledger that guarantees information is decentralized.įor Bitcoin it means transactions are records and that each record is compliant and secure in the ledger. ⛓️ What is a blockchain?īlockchain is the technology that powers Bitcoin, Ethereum, and Crypto. The purpose here is to give you “enough” theory so it doesn’t get boring and so we take baby steps towards learning about blockchains. Example of executing Python interactively Note that if you're reading this article in AMP mode or from mobile you won't be able to run Python code from your browser, but you can still see the code samples and illustrations. With just enough theory and a high focus on practice. □ It means that you will be able to run the code straight from your browser. We’re going to implement a simple version of a Blockchain written in Python interactively. ![]() Always asked yourself how blockchain works? Well, ask no more.
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