What is Block Chain?
Block Chain is a form of distributed database similar to a public ledger that maintains a continuously growing list of records often termed as ‘blocks’.
Block Chain is an indigenous creation by a person or group named Satoshi Nakamoto, typically designed to maintain records of all Bitcoin transactions.
The public nature of Bitcoin allows it to be distributed (and not copied) across computers connected to a crypto currency network, each of which can perform the task of validating and relaying transactions.
The Block Chain database consists of two types of records – transactions and blocks. Blocks hold sequence of valid transactions that are encoded and secured.
Each block holds a hash to the previous block in the chain, thereby forming the link. On an average, a new block is added to the Block Chain every 10 minutes through mining.
This self-growing architecture is similar to a new emerging type of Internet.
- Records aren’t stored at single location. The records are truly public and hence easily verifiable.
- No centralized version makes it safe from hackers.
- No single point of fail owing to the distributed architecture. Cannot be corrupted.
- Block Chain avoids the typical “Pass the locked copy” approach between two parties working on the same document. The same updated ledger is visible to everyone at a single point in time, similar to Google Docs (or Google Sheets).
This very architecture makes Bitcoins and other crypto currencies shielded from any central authority. Block Chains are managed by its own Network and not any governing authority such as Banks and Federal departments.
What is Bit Mining and how does it affect the Block Chain?
Cryptocurrencies are not manufactured similar to paper currency notes. Crypto currencies such as Bitcoins are “mined” though the mining process that includes compiling recent transactions into blocks and solve a computationally challenging puzzle.
Bit mining could be imagined as a large lottery that allows you to compete with your mining hardware with everyone else on the network to earn more Bitcoins.
The user with advanced hardware (graphics processing units (GPUs) and ASIC (which stands for Application-Specific Integrated Circuit)) can attempt more tries to run the cryptographic hashing function (two rounds of SHA256).
The Advent of Mining hardware manufacturing companies
With the rise in popularity, many companies such as Butterfly Labs, Bitfury, KnCMiner have started manufacturing exclusive bit mining hardware. Other companies such as CloudHashing and MegaBigPower have been renting out hosted mining hardware to its customers.
The first user on the network who solves the puzzle manages to place the next block on the block chain network and claim his/her reward. The reward includes a transaction fees (in Bitcoin) paid to the miner and the newly released Bitcoin.
Why is Bit Mining an essential part of the Block Chain?
By approving transactions, the overall security of the Bitcoin network is maintained by the Bit Coin miners. It also ensures fairness and stability while every member in the Cryptocurrency network is given an equal chance to indulge in mining and win bitcoins. With each mined block, the amount of new bitcoin released is termed as “Block Reward”.
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