Intro to BlockChain Technology

My crypto journey starts out on a pier to pier (P2P) share network full of anime geeks and software developers.

Back around 2008 I used to chat to a lot of folk online and as I enjoyed anime and still do I ended up in a social group with similar interests. One of the users on the platform and I must admit I forget who now as so many years have gone by advised the group check out some growing tech called Bitcoin.

In those days Blockchain technology was unheard of on the net and in society generally and it would be a few years before the mainstream and the news caught wind of the whole affair.

I chatted with the other members of the P2P group back then about it all then Googled it further where I found the odd forum out there for information on the system where often those forums would then link to other obscure posts and before I knew it I was bouncing through forums and websites gleaming bits of information from different comments and down the rabbit hole I crawled.

I remember at the time being quite fascinated with the idea of the Bitcoin Blockchain structure, the idea behind it, how it tied in to the Kardashev scale and the future as well as the enthusiasm and good nature of the community helping to build it. Perhaps a quick rundown of how I saw it back then would be appreciated here.

I considered Blockchain tech (more on what that means in a moment) the best of open source software a great way to share wealth which could be fully scrutinized with full transparency. From the code that it runs on and how it all works with its user wallets, the way it transacts payments from one wallet to another and the infamous Bitcoin mining (the miners who are the facilitators of the transactions).

I came to think of Blockchain technology and still do in a nutshell essentially as ‘the changing of a really long list of ones and zeros that depends on what people send from one crypto wallet to another crypto wallet using cryptography and the power of hardware processing as to secure each transaction in real time’.

By doing this in real time around the world it becomes near impossible if not totally impossible to hack.

The long list of ones and zeros are broken up in to what are called blocks by the community that created, developed and facilitate the network. Each block is made up of a set amount of coins in this case Bitcoin, as the same applies to all other crypto currencies like Ethereum coin and Litecoin and all the other Blockchains that are now online and available out there. It is just Bitcoin was the first Blockchain, ground zero for the technology.

Not all blocks were/are the same amount of Bitcoin/coins, when the Bitcoin network was young a block represented quite a chunk of Bitcoin where now in 2021 there are only about 6 Bitcoin in each new block. It was designed this way so that in the early days a lot of coins could be minted/mined/produced/added so the network could grow and spread and then as time moved on the coins could then reduce so the currency did not become flooded with a large continuous volume of coins being added to the network.

Many have heard of the fabled Satoshi Nakamoto and as far as I know that isn’t a person but an acronym of letters of the key initial creators of the network but it was and still is shrouded in mystery.

The main currencies on the planet the USD and GBP to name but two for example have two decimal places each in them $1.00/£1.00 where one Bitcoin has eight decimal places 1.00000000BTC where the fractions of each coin are known as Satoshi’s after the name. This is to allow for late stage inflation.

There will only ever be 21 million Bitcoins produced. This means it is both a limited edition and it also highlights why the eight decimal places are in the currency.

Between the eight decimals and the gradual reduction of Bitcoin production from the different blocks as the system further develops this all comes together as to manage the inflation aspect of the network, where hardware capabilities of the Bitcoin miners and the uptake in how many people use Bitcoin are/were all factored in to the initial architecture/structure of the network.

Bitcoin miners and all crypto miners are subject to what is called ‘the mining difficulty’. As more blocks (clusters of Bitcoin, or clusters of other crypto currencies on other Blockchains) are mined then the mining difficulty increases. The miners on the network are the facilitators of the transactions on the network; they are basically encrypting each transaction on the Blockchain as they are generated, changing the long list of ones and zeros as to secure each transaction made in real time and for doing this they are rewarded by the network in new coins.

When the mining difficulty increases the hardware that was capable of processing a certain amount of transactions before the mining difficulty went up then drops in what it can produce. So basically the more the mining difficulty increases the less coins and Satoshis the miners’ hardware then receive as rewards from what they received prior to the mining difficulty increase.

The harder the mining difficulty = Less rewards for the Blockchain miners

All these factors together are there as to steadily grow the network rather than to flood the network with vast quantities of newly minted coins. Without these factors in play well… think Zimbabwe and Venezuela when they kept printing too much money and you needed a wheel barrow of the stuff to buy a loaf of bread.

You heard me mention that I see the Blockchain as a long list of ones and zeros. Well this is because each block is a list of encrypted ones and zeros and each block represents so many Bitcoin. When you add blocks together you get…you guessed it a chain of blocks, a Blockchain. Simply put it is a chain of blocks comprised of encrypted ones and zeros - meaning it’s a really really long list of ones and zeros. This means when you own a crypto coin you actually just own the encrypted ones and zeros in the Blockchain that represents that coin – as to say the ones and zeros that represent the fraction of that chain of blocks.

To recap:

Blockchain technology is open source and transparent so it can be fully scrutinized.
Users of a Blockchain have wallets and the transactions between the wallets are facilitated by the miners.
Each block in the Blockchain represents a set amount of coins, not all blocks are the same amount of coins.
There are 8 decimal places in Bitcoin to allow for late stage inflation.
There will only be 21 million coins produced and added to the entire of the Bitcoin Blockchain.
As more Blocks are mined and added to the Blockchain the harder it becomes to mine the Blockchain.
Early adopters and facilitators of the Blockchain often helped develop it to share wealth.

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