Jerry brito bitcoin mining
This article explains what a crypto currency is and gives an attempt to give some answers to these kinds of questions. To understand why cryptocurrencies have precisely these characteristics, it is necessary to understand what problems are designed to solve their appearance. Therefore, to begin with, we will outline the problems faced by electronic payment systems in their history and point to technical innovations that made the emergence of cryptocurrency.
Based on this, we turn to specific economic themes that arise in connection with the appearance of this kind of money. Cryptocurrency is the name of a distributed and decentralized system for secure jerry brito bitcoin mining and transfer of digital banknotes based on cryptography.
The money symbols of such a system can be exchanged for fiat money at a market rate. The first crypto currency was Bitcoin, whose work began in January Later, using the same innovations that introduced Bitcoin, a number jerry brito bitcoin mining other crypto-currencies were created - however, some specific parameters of the algorithms laid in their work differed from Bitcoin.
Two major innovations, thanks to which Jerry brito bitcoin mining appeared and due to which the existence of crypto currency became possible in principle - the solution of two long-known problems of computer science: Prior to the Bitcoin invention, the two parties could not conduct jerry brito bitcoin mining transactions without the involvement of a third party, a trusted intermediary.
The reason was a paradoxical situation in computer science called "the problem of double spending," because of which all attempts to create electronic banknotes since the advent of the Internet have invariably been unsuccessful.
To understand the essence of this problem, let us first consider how normal transactions with cash take place. A person who jerry brito bitcoin mining a paper bill can transfer it to another person, and the latter, to confirm the fact that he is now its only holder, just look at what is in his hands. For example, if Alice gave Bob a hundred-dollar bill, she ceases to be its holder - it becomes Bob.
Bob can easily make sure that he has a bill, and Alice, accordingly, no longer has it. In addition, physical cash transactions are final: Thanks to jerry brito bitcoin mining this, cash provides transactions jerry brito bitcoin mining different parties, including those who are not familiar with each other, regardless of whether they trust each other.
Now let's see how electronic payment tools work. Naturally, paper money in this process is impossible, it is necessary some kind of digital implementation of banknotes.
If Alice wants to send Bob dollars, she attaches this file jerry brito bitcoin mining an email and sends jerry brito bitcoin mining to the addressee. But, and this is known to every email user, when you send a file by e-mail the original file in your computer remains.
Thus, Alice will have an indistinguishable copy of the dollars that she already sent to Bob - and she can jerry brito bitcoin mining them repeatedly, as well as three times, four times and as many as she likes.
Alice, of course, can promise Bob to erase this file after sending. But without cooperation with Alice, Bob does not have any way to check if she did it. Until recently, the only way to overcome the problem of double spending was to participate in the transaction of a third party - a trusted intermediary. Alice and Bob needed to have accounts from a third party, jerry brito bitcoin mining they both trust, for example, in the PayPal system. Trusted intermediaries such as PayPal keep a record of all transactions and account balances.
At the end of the day, all transactions with all accounts are completed. Note that transactions involving a trusted intermediary are not final in the definition we gave for the finality of transactions with ordinary money - since a third party can "reverse" it back.
The Bitcoin solution to the problem of double spending by accounting for thousands of peer-to-peer network nodes raises another problem. If there is a complete copy of the "ledger" on each of the network nodes, which he shares with other nodes, how will the new user connected to the network know that he was not given a fake copy? And how already connected to the network user can be sure that he does not receive fake updates of this book?
The problem of reaching a consensus between participants in a distributed network that do not trust each other is another long-standing problem known in the computer science literature as "the task of Byzantine generals": Several generals, each at the head of his legion, besieged the city. Each of them knows that half of all their troops are enough to take the city with a simultaneous attack - but if the attack is not simultaneous, then the forces will not suffice, they will fail.
Communicate with each other generals can only through messengers, there is no way to verify the authenticity of the delivered dispatches, and there is reason to suspect that some of the generals are traitors who will send false information to the others. What should be the strategy of negotiations of jerry brito bitcoin mining generals about the single time of storming the city, if there is jerry brito bitcoin mining mutual trust or a single high command, and the probability of attempts to prevent the assault by false reports is great?
As a matter of fact, exactly this problem is faced by Bitcoin "miners" - specialized nodes that check new transactions and add them to the ledger. The method used by Bitcoin - all the additions to the book are possible only based on the results of solving a certain mathematical problem, very laborious, but easily verifiable for correctness this is largely reminiscent of the calculation of simple multipliers - a time-consuming task whose performance is verified simply.
About new transactions in the peer-to-peer network are reported by their participants. Miners learn and confirm these transactions, checking on their copy of the book block chains that they do not have double expenses.
If the transaction is legitimate, the miner enters it into the "queue" of new transactions to add a "new ledger" new block in the chain as a new page. At the same time, all exchange participants simultaneously solve a mathematical problem, where all the previous blocks jerry brito bitcoin mining the chain are its introductory.
Miner, who manages to solve the problem, communicates his decision along with a new block to add to the chain all the rest. All reporters who have jerry brito bitcoin mining the message can easily verify the correctness of the solution: Then everything starts again, and the updated chain becomes the initial data for the task that you need to solve to add the next block-the record of the next transaction.
The solution of the jerry brito bitcoin mining problem for creating a block takes about 10 minutes. This is very important: On average, every 10 minutes a new block is added to the chain, because it is during this time that the miners decide the next task they have set.
However, if more miners join or network their computing power, the average gap between the addition of new blocks decreases. To maintain the number of blocks added at the level of six per hour, every blocks two weeks the task complexity increases. Again, the main thing here is to provide a solution for each current task in about 10 minutes. How can this solve the "problem of Byzantine generals"?
Imagine that the miner collided with two competing chains of blocks just as the general receives two dispatches with different assault times offered by other jerry brito bitcoin mining. To choose which chain to accept and continue, the miner determines which one is longer - that is, which circuit was given more computing power. The gap between the longest chain and its "competitors" will increase with time - since it will have more computing power behind it.
The new blocks contain not only new transactions transmitted over the network, but also one more - accruing the winner-winner of 25 specially issued bitcoins, and this serves as a stimulus for all to provide the system with its computer capacities.
In addition, for everynewly created blocks every four yearsthe size of the prize for miners is halved. When the system was launched injerry brito bitcoin mining premium for the new block was 50 bitcoins. Today jerry brito bitcoin mining is equal to 25 bitcoins, and jerry brito bitcoin mining will be reduced to This means that the total amount of jerry brito bitcoin mining bitcoins will never exceed 21 million.
But with the reduction of the premium to the miners - what is their incentive to provide the power of their computers to verify the transactions of the system? The following solution was found: Jerry brito bitcoin mining the operation of the crypto currency, there is no need for a central bank that would manage jerry brito bitcoin mining money supply or supervise financial institutions in the system - but the role of the governing institutions in the crypto currency system of monetary circulation should not be understated.
We will focus on two separate but interrelated methods of "managing" crypto-currencies. The rules that determine the validity of transactions with crypto currency are laid down in peer-to-peer network programs that are used by miners and users. One of the forms of legitimate transactions is the issue of new coins-bitcoins "out of nothing". Such operations can not be performed jerry brito bitcoin mining everyone - the miners compete for the right to secure one such transaction per unit on Bitcoin approximately every 10 minutes.
When the miner finds a valid hash for the block, he can jerry brito bitcoin mining newly issued coins. Transaction on the issuance of new coins by the miner, like any other, must comply with the rules of the system. So, the block containing the transaction will be rejected, within which the miner credits himself with coins that he did not earn and for which he did not have the right to issue.
Thus, the growth of the money supply is restrained by the jerry brito bitcoin mining amount for each block. At Bitcoin, this fixed amount does not remain constant, jerry brito bitcoin mining is halved every blocks, or every four years, as jerry brito bitcoin mining above.
The total mass of all bitcoins that exist and can exist is asymptotically approaching 21 million. Init will reach 20 million, and in it will cease to grow altogether. An attentive reader will certainly notice that Bitcoin software, which establishes certain rules of transaction confirmation, did not appear on its own. These rules laid down in the programs have arisen as a result of the interaction between the leaders of the open-source project developing the so-called reference client program, other developers, miners, the community of users and malicious players.
The dynamics of the relationship between these jerry brito bitcoin mining is also important for understanding Bitcoin, as the relationship between central banks, traditional financial institutions and monetary policy - to understand the mechanism of the work of fiat money.
Like all successful crypto currency systems, Bitcoin is an open-source project with no owner. Users, as a rule, are suspicious of crypto-currency projects acting on the basis of a closed code - for such crypto-currencies, there are significant amounts of preliminary mining to reward insiders or other features of ownership.
Constraints for developers are also the certainty jerry brito bitcoin mining users' expectations regarding the future of the system. For example, a hard limit jerry brito bitcoin mining 21 million bitcoins can in principle be changed when upgrading a software product, but in jerry brito bitcoin mining case of Bitcoin this is not discussed - although other crypto currencies have different rules for regulating the money supply.
The nature of the evolution of the system is also affected by the separation of Bitcoin software into a reference client program and so-called alternative client programs.
The community of users believes that the main Bitcoin team should manage and manage the network. An alternative approach would be to agree the community on the specification of the network, after which independent development teams could write client programs to implement this specification. The fact that Bitcoin has a dominant reference program means that the evolution of the system can go faster, although there are pitfalls.
For example, the community must firmly believe that the core team of Bitcoin developers will not undertake non-procedural changes in the jerry brito bitcoin mining. A more dispersed approach to the development of the crypto currency would slow the evolution process, which would not allow any changes to be made to the system without a full-scale discussion by the whole community. Perhaps Bitcoin will eventually move towards this model, but so far the benefits of rapid evolution seem to be considered more important than its costs.
Important role in the management of the Bitcoin system is played by the miners. Since they provide cryptographic protection against double expenses, the operation of the crypto currency requires their agreement on what can be considered an absentee transaction. Since any changes in Bitcoin are possible only if they are accepted by most miners, they can also deter developers.
The influence of the miners is also carried out through the mining pools. Miners are pooled for more stable payouts. Sometimes a separate miner does not find a new block for quite some time. But if the miners join forces and divide the reward, they can receive payments on a daily basis. In connection with the mining pools jerry brito bitcoin mining are complications. For example, the largest mining pool in Bitcoin often has at its disposal up to one-third or more of the computing power of the network.
This hypothetical situation will undermine Bitcoin's credibility and, most likely, will cause a collapse of the course of this crypto currency.