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Bitcoin: An Introduction to Blockchain and Crypto

Posted July 7, 2022 6:04 pm
5 min
By Yehia El Amine

One cannot bring up the very topic of cryptocurrencies without Bitcoin being mentioned somewhere in the mix – from the eager coverage of each dramatic high and stomach-turning low, the coin has rendered itself an inescapable and integral part of the space. 

Putting aside its volatility and fluctuations, Bitcoin receives much attention mainly because it’s one of the first cryptocurrencies to come into existence. Yet, it remains the most known of the 5,000 other cryptocurrencies today. 

While it’s become the poster child for Web3, Bitcoin is not the optimal choice for novice investors or people looking to enter the space from the get-go. However, to this day, many people still don’t understand the history of Bitcoin, how it works, what technologies were birthed as a result of it, and much more. 

Let’s jump in. 

Bitcoin: The Origin Story

It all started during the 2008 financial crisis, trust in the global banking system was on the decline, with people looking elsewhere for financial stability and safety from the global economic shock that came as a result of the crisis. 

Then, somewhere, a post labeled “Bitcoin: A peer-to-peer Electronic Cash System” appeared on a little-known internet forum. The post contained a whitepaper penned by a persona called Satoshi Nakatomo – a pseudonym used to hide the author(s)’s true identity. 

According to the whitepaper, Satoshi considered that banks and governments enjoyed too much power, strictly utilized for their interests. It is with that thought in mind that led to the birth of Bitcoin. A cryptocurrency free from the control and manipulation of central banks and governments, allowing people to send and receive money directly to each other anywhere around the world, free of charge.

A Slow Start

While the concept didn’t initially gain traction, Bitcoin started to slowly rise in popularity worldwide, kickstarting the first use cases for the cryptocurrency. Soon enough, it began to attract evangelists who described it as the future of money – the worse the big banks behaved, the more popular it became. 

Since its launch in 2009, Bitcoin has not only grown in popularity but also in value. The currency went from a low of 0.9 cents in 2010 to a monumental high of $68,000 earlier in November 2021. The cryptocurrency reached 15,797 nodes (as of the time of writing) or participants that utilize the Proof of Work system to validate transactions and mine Bitcoin, according to Bitnodes.io.                                                                                                                                                                               

The freedom of anyone mining Bitcoin prevailed until the inception of specific mining computers called ASICs, which overpowered regular PCs. This allowed certain companies to hoard these capabilities to amass riches. While it is still possible for many individuals to mine, it is an expensive set up for the machines needed and the return on investment (ROI). The reason for this is due to high electricity fees and the currency’s fluctuations. 

The Birth of Blockchain 

On the 9th of January 2009, the blockchain was born and officially launched the first block “the genesis block.” This allowed for the first mining act to occur. The first test transactions took place a week later. 

“For the first few months of its existence, it was obtainable only by miners validating the Bitcoin blockchain,” Chetan Chawla, assistant professor of entrepreneurship at North Central College in Naperville, Illinois, researches cryptocurrencies and blockchain, told U.S. News. 

So what exactly is blockchain technology? And how does it work?

According to Investopedia, a blockchain is a distributed database or ledger shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. 

In cryptocurrency systems, blockchains maintain secure and decentralized records of transactions. That is the guarantee provided by the technology, as it eliminates the role of a third party handling such transactions. 

Blockchain Explained

The blockchain gathers information in clusters, known as blocks, holding different datasets of information. Accordingly, these blocks enjoy specific storage capabilities. When reaching full capacity, close up and link to a previous block, forming a chain of data known as blockchain, Investopedia explains. 

All new information following a freshly added block is compiled into a newly formed counterpart added to the chain when filled.

“A database usually structures data into tables, whereas a blockchain, as its name implies, structures its data into chunks (blocks) that are strung together. This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled, it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact timestamp when it is added to the chain,” said Investopedia. 

Blockchain aims to allow digital information to be recorded and distributed but not edited. This way, a blockchain is a foundation for immutable ledgers or records of transactions that cannot be altered, deleted, or destroyed. Blockchains are also known as distributed ledger technology (DLT).

How Does Bitcoin Mining Work?

Bitcoin mining can be achieved by verifying new transactions against the Bitcoin network, producing new Bitcoins or mining. 

With that in mind, mining is the act of other Bitcoin transactions validated digitally on the network and then added to the blockchain ledger. This is done by high-powered computers solving and calculating complex cryptographic hash puzzles. This verifies blocks of transaction updates on the decentralized ledger. 

However, these puzzles require mighty computing power and state-of-the-art equipment. Many miners rewarded with the currency itself through Proof of Work (PoW) and released into circulation. 

Mining isn’t easy since its complex puzzles are only solved by trial and error. The odds of solving it is at approximately 1 in 5.9 trillion.  

Bitcoin Games 

Many Play-and-Earn games are located on different blockchain platforms. Among them Avalanche, Ethereum, and the like, however, Bitcoin also has its fair share of fun on its Lightning Network. 

Let’s check some of them out.

Lightnite

Lightnite is a multiplayer online game developed by Satoshi’s Games. It allows players to earn Bitcoin by shooting down virtual opponents and collecting their items as rewards. Gamers must stack sats (satoshis, considered the tiniest units of BTC) during gameplay to compete against others. 

Lightnite allows you to cash in on your Bitcoin when you exit the game through the Lightning Network. 

Turbo 84

This racing game makes players drive past obstacles at exponential speeds, intending to collect tickets, high speeds, and distances reached. 
To earn Bitcoin in Turbo 84, players must collect THNDR tickets by consistently playing the game. The tickets would then be used in a daily draw to determine the number of satoshis won.

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