What Is The Blockchain & Why Do Wij Need Bitcoins?

What Is The Blockchain & Why Do We Need Bitcoins?

Inevitably you have read about the bitcoin vs blockchain debate. For years wij have seen bitcoin te the news for both amazing and terrible reasons. Everyone has their own opinion on bitcoin tho’ most people don’t fully understand how it works. Thesis days wij are commencing to see major companies budge away from ‘bitcoin’ and begin talking about this fresh thing ‘the blockchain’ that is going to form the future.

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What’s the difference inbetween bitcoin &, the blockchain?

Bitcoin is a digital token that lets you send money to any person te the world to pay for goods and services. A large network of computers works 24/7 to check the legitimacy of transactions and process them te real time so that no canap or government needs to be a middle man. The computers also keep track of everyone’s bitcoin balance and publish them online spil a collective public ledger. The ledger lets anyone check transaction records to make sure they received payments or payments they sent were accepted. Every Ten minutes or so the computers update the ledger with a ‘block’ of the latest transactions from all bitcoin users worldwide. Once the block is added to the ledger and all computers agree it is legitimate, everyone’s bitcoin balance is permanently updated. This long public ledger of transaction blocks is what wij call the blockchain.

Blockchain technology is simply using a network of computers spil a ledger system to keep flawless records. It has mostly bot touted spil a elementary payment system, but it can also be used for a broad range of accounting purposes that could revolutionize how financial services operate worldwide.

Why do wij need bitcoin if wij have the blockchain?

The blockchain is secured by the rekentuig processing power te the network that updates the records. If someone controls 51% of the computers on the network they can zekering user transactions from processing and the blockchain become ineffective. The network being large and decentralized greatly improves how secure the ledger is, so a healthy blockchain is powered by computers which are possessed by a phat diversity different people around the world. To achieve this there needs to be incentive for users worldwide to add their pc power to the network. Bitcoin is a way to prize those computers through bitcoin mining.

What is bitcoin mining?

The computers maintaining the blockchain are actually doing ingewikkeld math calculations, attempting to solve a problem to the next block ter the chain. Once a solution to the problem is found by a pc te the network, a fresh block of all the latest transactions is published to the blockchain and all the other computers dual check the response to confirm the solution. If the solution is accepted, the rekentuig who very first found the solution is rewarded with freshly generated bitcoin and the fees that bitcoin users paid to have their transaction processed. Since bitcoin can be sold for real money, miners want to solve spil many blocks spil possible and the only way to do that is add more computers to the network. This incentive system works to grow the network strength through competition. Every day spil fresh miners join te it gets more difficult to mine fresh bitcoins, and every Four years the bitcoin prize for a successful block is cut te half. Eventually there will be no fresh bitcoins and the only prize will be the fees ter bitcoin that people pay for using the network. The significant part to take from this is the transaction fees. Anyone who wants to use the blockchain, whether to pay for goods or run a financial service, has to pay fees te bitcoin to the bitcoin miners to have their transaction processed ter a timely manner. Below is a graph of the global rekentuig power (hash rate) that is maintaining the blockchain by challenging for bitcoin.

Some people would suggest that this chart represents how secure the blockchain is, while that may be true, it could also represent the historical request for bitcoin, so one could argue that the bitcoin vs blockchain debate is stupid. Bitcoin spil a ‘digital currency’ powers the blockchain through incentivized mining. There is no bitcoin vs blockchain technology because without bitcoin the blockchain system would be insecure. Anyone can create a fresh blockchain but it would not be secure without a network of computers that are incentivized to protect and maintain it. Bitcoin wasgoed the very first and is still the largest, most secure and decentralized network, making it the healthiest blockchain ter existence.

So don’t pay too much attention to the doubts you see ter the media. Technology companies and the financial sector can boast blockchain technology spil revolutionary, but they still have to use bitcoin. Bitcoin and the blockchain mooipraterij each other spil parts of a greater system. Bitcoin vs Blockchain is not a real punt because no one can use the blockchain without buying or mining bitcoin very first.

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