We all know that the emergence of new things often has two extremes of excellent and wrong, and myths and ugliness also arise because both are derived from the unknown, just like cryptocurrency, but we have to thank you for the past two years. The government’s supervision and the power of the media have given cryptocurrency a lot of exposure.
1. Bitcoin is the blockchain?
Because the two words Bitcoin and blockchain are often inseparable. And most of today’s cryptocurrencies (altcoins) are issued based on the blockchain or in the name of the blockchain, leading to confusion of concepts. However, the only relationship between Bitcoin and the blockchain is: Blockchain is Bitcoin’s underlying technology.
As a distributed ledger, the blockchain can be understood as a decentralized ledger that everyone can view and join. More generally speaking, it is similar to the knotting notes of the ancients. Each knot is equivalent to a block. A new transaction entering the blockchain is equivalent to tying a knot when something happens, and the knot is recorded on this knot. These are the new serial number and date, the owner’s identity, and corresponding values or a set of other parameters defined explicitly for the transaction.
Bitcoin is practical because it uses blockchain to store value and trade. However, the difficulty of blockchain does not lie in the technology itself but the environment and ideas, such as application scenarios and regulatory issues.
Blockchain is divided into the public, private, and joint blockchain. And the prominent category is no permission and permission.
So the correct statement is: cryptocurrency uses blockchain technology, and blockchain technology is not exclusive to cryptocurrency.
2. The emergence of Bitcoin and the weaknesses of Bitcoin
Unlike other currencies, Bitcoin is produced according to a specific algorithm to ensure the security of all links in currency circulation.
The biggest problem with Bitcoin is that it is easily manipulated, the transaction itself is not easy to regulate, and every rise or fall of Bitcoin may be maliciously manipulated.
3. Blockchain is meaningless. It’s just a waste of human resources
Mining: Through the open-source blockchain network, deploy mining to ensure trust, tamper-proof, and complete lengthy and complex algorithms through networked computers. The “miners” who run the calculations get their mining rewards when they get the correct answer. Mining uses worldwide servers, generating millions of calculations per second, so the mining process is very energy-intensive.
This misunderstanding still stems from the confusion between the concept of cryptocurrency (Bitcoin) and blockchain. Since 99% of the blockchain projects currently issue coins, very few projects have been applied. The crazy mining of coins has caused a waste of GPUs and electricity. The current electricity consumption in the Bitcoin network within one year is equivalent to the annual national electricity consumption in Denmark.
Bitcoin is indeed like this. But, blockchain is not an exclusive technology for cryptocurrency coins.
Bitcoin’s blockchain technology is an open-source network developed for everyone. The advantage lies in its perfect decentralization (no people control), but the disadvantages are obvious. Bitcoin is a public blockchain. Because “mining” consumes a lot of hash rate, the electricity it uses is equivalent to the electricity consumption of one or more countries.
All pre-selected nodes jointly determine the generation of each block of the joint blockchain. The pre-selected nodes participate in the consensus process, and other intervening nodes can participate in the transaction, but the accounting process does not matter.
The private blockchain must have the permission of the owner, and its access is restricted. Participants using a private blockchain must obtain a license. A trusted regulatory agency or network participant verifies the information in the entire chain, so there is no need for mining. Since data mining is not required, there is no energy consumption problem with private blockchains.