The public has latched onto the recent market events with an intense curiosity brought about by a greed for instant riches. In the last year alone, the value of Bitcoin has risen by 1,731%. We’re talking gold rush V2.0, baby. Money talks, and with a resounding $615 billion held up in cryptocurrencies, it is clear why this is assuredly not the first cryptocurrency article you have read — maybe even today. An unfortunate side effect of mass interest in a subject is the wildfire-like spread of misinformation. So, what exactly is a blockchain, and what can you still do now that everyone has finally jumped on the cryptocurrency bandwagon?
Bitcoin and Other Cryptocoins
Bitcoin was the first peer-to-peer decentralized virtual currency released in 2009 by the mysterious figure known as [Satoshi Nakamoto] — a notoriously mysterious character — and it has continued to be the big dog in the cryptocurrency market today in 2018.
However, there are a whole slew of other digital coins that are being feverishly bought up like stocks in the 20s. Coincidence? Some of the notable contenders out there include Ethereum, Litecoin, and yes, even Dogecoin. You can see the growing list of 1000+ cryptocurrencies here.
The technology underlying all of these crytocurrencies is know as a blockchain, and that term has taken on its own mythical level of buzzwordiness.
Blockchains are not black magic, they do not hold the answers to the universe, and they will not pull cold, hard cash out of thin air. They are, however, generating a rather large buzz and confusion as of late. In layman’s terms, blockchains are digital files that list accounts of the transactions that take place with forms of cryptocurrency. As the image below shows, these files — blocks — record the information in hash functions with timestamps. But these ledgers are not kept away from prying eyes by your banker, or under your own lock and key. These are public ledgers accessible by everyone, simultaneously creating a need for trust while abolishing it.
Whoever you transfer money to can see all of your previous transaction history since it is locked into the blockchain. This eternal record of transactions has understandably intrigued many. Using blockchains to store small files of data is one project that was introduced after Bitcoin started to become mainstream in 2015. Now, large corporations are frantically looking for ways to use blockchain technology in their businesses.
It is likely that blockchain technology will fundamentally change the way we use some technologies, and those uses may be in something other than accounting for monetary transactions. Blockchain has been proposed for tracking property ownership, storing large amounts of data, filing copyright, implementing micro power grid sharing, and a slew of decentralization applications of many different kinds. At this point it’s cliche to say you’re planning to “put it on a blockchain”, but that’s no joke. At some point, all of these attempts to apply the concept will result in a few that really do make sense.
With the growing number of applications for blockchain being introduced, the validity of its security is something to watch. Since the data written into the blocks cannot be tampered with or overwritten, it appears to be secure. However, as is the case with Bitcoin, if 50+% of the computers working on a network tell a lie in a consensus protocol, then it will become true. This unique security flaw is kept at bay by the communities of mining pools ensuring that no one gains such a large influence over the network.
What Does the Future Hold?
So you missed out on mining Bitcoin before it really ramped up over the past five years, and are kicking yourself for not investing in this gold mine earlier. Don’t worry; your future is whatever you make it. There is still money to be made in the game, albeit maybe not as easily as in the good ole’ days of 2010.
The average Joe simply cannot compete with monstrous mining farms that have popped up. Some are turning towards GPU mining Ethereum. Unlike Bitcoin, it can still be mined at a profit with a half decent gaming rig although a dedicated multi-card setup is better. Students living in on-campus housing are pressing their gaming machines into service since they do not pay a separate energy utility in their dorms. They have been known to set up several mining rigs with this virtually “free” energy to offset soaring tuition prices and learn a thing or two about mining.
So far we have seen a couple of standard Bitcoin price trackers, and even a Bitcoin Bot that dances whenever it receives a transaction. As Bitcoin skyrocketed through 2017 some sites were caught stealing your CPU cycles to mine covertly while others began doing it overtly as an alternative to running ads.
Don’t kick yourself for having missed the gold rush. That’s how gold rushes go. But don’t give up either. There’s plenty of room to play with the new technology and that’s what the Hackaday Community does best: find new and interesting applications for the latest and greatest. Just make sure you let us know what you’ve discovered!