Four components of Bitcoin - Chapter 7- Beginners guide to Blockchain!

vishalsingh4997 (57)in #bitcoin • 7 years ago

Hello Everyone, Today's chapter is going to be an important chapter in this series. Today we are going to learn about the FOUR BASIC COMPONENTS OF BITCOIN. This four elements will clear our way to understand the bitcoin blockchain. I hope that you are enjoying the lessons . So Without wasting time let's start the CHAPTER NO.07.

The Four Basic Components of Bitcoin

Till now we have learned the basics of blockchain. But now we are going to put up every object that we have learned in the previous chapter in a single SCENE.
I know that these may be a bit hard to understand for you guys but I will try my best to bring down everything at a basic level.
We know a block is madeup of hash and complex cryptography environment ,but this is only the one side of the coin. The bitcoin blockchain is more Amazing than we thought.

Facts
Never do mining unless you have a good Rig or Hardware! No to smartphone Mining!

First Component - Software

The first component of Bitcoin is software but how and why software....?

What if I ask you that "What is a Bitcoin?"

Your answers will be like "Bitcoin is ......."

A blockchain
A Mining Technology
Uses Cryptography
Have Money Transactions
Has Online wallet
Do Verification,etcetra...

But if you see all this 6 points at a time,than you can easily understand that Bitcoin is A Software.

Bitcoin is a software at core which operates 24x7 .

Second Component - Cryptography

Without cryptography no online transaction is possible even a message or email too uses a cryptography to ensure the security of the data travelling over internet.Cryptography is a mathematical approach which is solvable by computers and not by the humans. So all the stuff that protects your data is served by the cryptography.

Facts
Online Electronic-Mail works on SMTP and POP3 protocol.

Third Component - Hardware

Running and solving cryptography requires hard HARDWARE. This hardware are specially designed to mine i.e. finding Nonce to validate block and hash. It requires a lot of cpu power to complete a simple task on bitcoin blockchain.
You can use your computer and even smartphone to mine but only if you can go in the past ( 2012 A.D.) with your laptop and smartphone. If you try to mine bitcoin right now with your smartphone or home computer than you will *End up loosing your computer along with a hefty electric bill.

Why you can't mine btc using smartphone or general computers?

ANSWER IS SIMPLE - DIFFICULTY LEVEL.
The difficulty level to solve such mathematics is relatively high and the level is keeps on increasing to ensure the security. So No Mining with Home computers. Instead use Bitcoin Rigs!

Fourth Component - Miners (Gaming Theory)

Miners are the users who is actually involved it gaming theory. All the hashes and validation are done by this miners. After successful creation of block, Block is added to blockchain.

Let's have a deeper look at Gaming theory!

So this is how it works!

Bitcoin software creates the task and than give to the miners to solve it!
This task or challenge will take approximately 10 minutes to be completed!
Every single miner starts to find that Nonce which will validate the hash of block
At a moment One of the miner with higher speed and great hardware specs will win the match but the match will go till 10 minutes.
No one is loser!
All the community will start verifying that block which is mined by the winner.
It will end up by being the new block that will be added to blockchain.
This is both competition and co-opetition .
Winner will be paid by 12.5 Btc and that's how new bitcoin is created!