Pundits often talk about Bitcoin mining as though it were some sort of mysterious process. Once you start to really delve into it, however, it quickly becomes obvious that there’s more to it than seemingly magical divination. These three points show just how multifaceted Bitcoin mining really is and why it’s important to research the mining process so you fully understand how Bitcoin works and the technology behind it.
1. Mining Uses Existing Technologies
Despite the fact that many people have said that cryptocurrencies are revolutionary, they actually use the same time-tested technologies that much of the web relies on. For instance, standard cryptographic message digests and summation algorithms make up much of the back end of nearly every Bitcoin mining program on the market. Since most of these use open-source libraries, hackers and programmers are free to change them in whatever way they want. Those that are released under a public license can then be further modified in order to build better tools that should prove useful for everyone on the scene.
2. It’s Often Done Collaboratively
The popular image of Bitcoin miners is of those who operate purely on their own. However, a majority of serious miners now operate with other like-minded individuals who pool their resources. Investors can hire professional Bitcoin mining firms who will mine on their behalf. Since the process uses a great deal of electricity, it makes more sense to work collaboratively than it does on one’s own. That being said, mining groups have found a number of ways to use power reclaimed from other industrial processes so they don’t have to buy nearly as much electricity.
Some have elected to install solar panels while others have decided to use various types of generators in order to reduce their bills. This can help to dramatically increase the amount of money that people can make by actually generating proof tokens.
3. Blockchains Can Store More Than Just Transactions
Since blockchain processes leverage cryptographic technology, they could theoretically be used for a wide variety of other applications outside mere mining. Engineers are actively looking at new ways to deploy this same technology in new ways. Some are using them to make immutable records that show whether or not certain workflows have been tampered with. Once something gets written to a blockchain, it’s usually not possible to go back and delete it. That means these chains are a great way to ensure that nobody tries to actively mess with sensitive information. It also helps to provide a single source of truth that everyone in an organization can rely on to settle disputes.
Perhaps even more promising is the possibility of a blockchain-based file system. This would allow storage of additional metadata needed by some legacy systems while simultaneously providing a complete directory of everything written to a storage device. Organizations that need a so-called Write Once Run Anywhere solution would be among those most likely to gravitate toward these kinds of solutions.
Considering the heavy focus on research in this field, it’s likely that a number of other applications are coming right down the pipeline.