You've heard about cryptocurrencies. You've heard about Bitcoin. You've even heard about Ethereum, and I'm sure you've even heard about the Pi Network by now.
But Do You Know ANYTHING About Blockchains?
Simply put: They are secured data that can not be manipulated, altered or changed in ANY way, shape or form.
I will explain a bit further. Because after all, if I stopped there, it would be the world's shortest article. (sorry, dry humor)
I recently saw a lecture from the great Dr. Nicolas Kokkalis. Nicholas is the man who created the online gaming platform Gameyola, he was the founding Chief Technology Officer at StartX, and with his PhD from Sandford (where he is a Postdoctoral Scholar in the Computer Science Department) he is a co-founder of the Pi Network. From his lecture, he breaks down the components of the blockchain in to a basic format that [he thinks] everyone should understand. I'm going to break it down even further.
Now, please bear with me for a few minutes, but I'm sure by the end of this article you will have a clear and concise knowledge base of the "BLOCKCHAIN".
Lets get started...
There are five main components that the infamous blockchain must have to operate.
1) HASHES 2) NONCES 3) BLOCKS 4) NODES 5) SECURITY = BLOCKCHAIN
Breaking it down:
1) Hashes: Are just data. It can be any form of data that you want to transmit or hold on to. The data is random in length, but will result in the same size. For example you can use the word "Money" or the entire "SEC Code; Rules and Regs". Money is only 5 letters long, and the SEC Code is very long (i have no idea how many words are in that thing! No matter what data, the size will always be 256 bits or 64 hex digits. DON'T GET LOST, Its just a very big number.
Maybe you are asking, "what's a hex digit"? If you want to know, keep reading, if not... skip this part! Computers are basically a complex calculating device that runs algorithms and code. Hex means hexadecimal... which is a number system with a base number of 16. Each hexadecimal digit it 4 bits (binary digits) which is half a byte. DID I LOSE YOU? I hope not. Like I said earlier... A very big number.
Now, The GENESIS BLOCK is the starting point for any new blockchain. The data that is entered will always have the same hash. If any portion of the data changes, the hash will of course change... Because Data is the Hash.
2) Nonces: Just confirmation of its validity. It is the portion of the Block that does change! Its a random number added to a "verification" section of the data that needs to match up. When the Nonce verifies the data, the hash will change to incorporate all data on the Block. SO WHEN YOU "MINE", its actually the process of finding the SINGLE Nonce that validates the new block. When its valid, the Hash will start with four or more zeros. (Sorry, that's just how it was designed)
3) Block: As stated before, the Genesis Block starts off the algorithm. Think of a block like a spreadsheet. This spreadsheet needs confirmation (nonce) before is can be sent in. When the spreadsheet is correct it gives the total (hash). Lets say that you need a spreadsheet made every 10 minutes to keep track of everything. Well, to start off the "new" spreadsheet (block)- the previous spreadsheets total (hash) will start the new spreadsheet. When the entire cycle is complete, this forms a ledger. The ledger is the Blockchain. Once the final confirmation of the ledger is complete, it is verified/validated. The information in this ledger can NEVER be altered!
Now I'm sure you are asking, that was only 3 parts to the Blockchain, what about the fourth and fifth.
Glad you asked.
4) Nodes: The independent computer systems verifying the blocks. These nodes are scattered all across the world, and not only one computer (node) verifies a block. Thousands of computers verify the block and entire blockchain! Once its verified, the computer that verifies the blockchain first, will have its time stamp on the "ledger" giving credit to that computer. This brings up the security aspect of a blockchain...
5) Security of the Blockchain: When you have hundreds of thousands (maybe millions even) of computers world wide trying to solve the blocks and blockchain first, they all want to of course get there first. Thousands upon thousands of computers (nodes) verify every block in the chain. Once that single portion is verified, they all move on to the next block. this happens over and over until its COMPLETELY solved. A "hacker" would have to have access to every computer that had verified each of the blocks, and have the correct data information per block. THIS IS GOING TO MAKE YOUR BRAIN HURT... Data = 20x10 trillion. The hash would look like this 0000000000000000000472h690475jue45628777hu76398w70083jk90o24e
And every time only 1... yes... ONE letter changes, the whole hash will change. Yeah... the amount of sheer code and variations of the hashes are enough to get a migraine. But YOU also forgot about the NONCE that is RANDOM! The Nonce changes each time the data changes, and the data in turn changes the Hash. To top it all off, that's for only the last block in the chain. Think how it would be to have someone try and change the second block of the blockchain. Nope... nope... not going to even think about that craziness!!!
You now have a simplified version on the makings of a Blockchain.
There's some more information, should you like to know more.
The "hash rate' in which the Nonces are cycled (entered) is at 143 million terahashes per second world wide. A terahash is one trillion hashes. Right now, in 2021, there are 143 million-trillion hashes around the world. One Block is solved every ten minutes. You can imagine the difficulty and LUCK it would take to be able to solve the LAST block of a blockchain. In regards to Bitcoin's blockchain that is. In 2009, Bitcoin starting with the Genesis Block would yield a "mining" of 50BTC. It was much more simple in the beginning, where the four zeros at the beginning of the hash signified the correct validation. You can see now from above that the amount of zeros have grown. That's not saying that there aren't some algorithms out there not solved yet, because there are. A Blockchain that was started in 2010 was just solved this past year. The person who owned the "mining rig" (aka- Node) recieved over 2,000 BTC. So if you have about $95,000 to get a mining rig, you can join the vast amount of people mining for Bitcoin.
But Blockchain Technology isn't only used for cryptocurrencies. There are unlimited uses for blockchains which can be integrated in to almost every field. Its all about using the different pieces in the right way. When used in cryptocurrency, the abovementioned explanation is standard. But to simplify a "Blockchain", its essentially a very secure database which can be distributed. This database wont be able to be altered, or "hacked" in to.
Whether its a completely encrypted transmission of medical files complying with HIPPA laws, or a screenplay that has been sent to be registered with the Writer's Guild of America, blockchain can be implemented. Legal papers from the smallest legal firm that need filed with the court, the data search on a popular website, or stock trades on your mobile app... Blockchain is there.
Can you now see the importance of the blockchain. Can you see imagine the world wide industries that will benefit from their information that can't be messed with! THAT'S RIGHT... Almost EVERY INDUSTRY!
I know people are regretting not jumping in to the Bitcoin era. Back then it was innovative and lucrative. When the price started to rise (at the real "take off point") the price was around $4k per BTC. Now the market in Bitcoin is saturated with mining farms all over the world. Those mining farms are warehouses filled to the ceiling with computers that literally puts most of our desk tops and all of our laptops to shame. Those computers do nothing by "mine" all day long. Yes, the price per Bitcoin is around $34k (at time of publishing), but its roughly 200 trillion to one. Not a great ratio. But hey, everyone can get in on the Bitcoin era still, but its more likely that you will buy a piece of a Bitcoin, because mining a Bitcoin is highly unlikely. You know the phrase, "Getting the Whole Enchilada" - or - "Getting a Piece of the Pie"!
I'm glad you thought of Getting a Piece of the "Pi"... There is however a way to get in on a different type of cryptocurrency. There's no use for a $95K mining rig. Just your PHONE. Read these articles to learn more about Pi Network.
The Pi Network is truly innovative. It is currently in the PRE "Take Off" phase. And best of all, there's no saturation (And its free to mine!). Yes, Pi has halved six times already, but it currently has only 12 million users. The Pi Network's Core Team positioned the milestones for a 1 billion user profile.
THAT MEANS that Pi only has 1.2% of the total amount of users it anticipates. This is why I say that the market IS NOT saturated. As you can see from the graph below, the Core Team could actually stop allowing new miners to mint Pi. There are three more halvings, so the time is NOW, before you miss out on this millenia's "Gold Rush"!
As always, if you have any questions or comments, please feel free in doing so!