Unless you’ve been living under a rock for the past five decades, you’ve probably at least heard the word "Bitcoin" before. While you’ve probably heard of it, there is a fair chance you don’t completely comprehend what it is, how it works, and why people are so excited about it.
Bitcoin was started in 2008 by an unidentified person or group who goes by the title Satoshi Nakamoto. Even though bitcoin has received plenty of coverage focused on its potential as a currency, business insiders are quick to point out that it’s really a whole lot more than that. Bitcoin as a currency is simply one application that uses Blockchain technology, the inherent technological framework that produces the currency, and the rest of the possible applications potential.
While describing all of the complexities of bitcoin would take several posts, the key thing to understand is Bitcoin is essentially a decentralized network of computers. You’ve got an address for Bitcoin to be sent , and also a safe wallet to store them. While Visa and Mastercard have their own data centers to power their network, confirming transactions, payments, etc.. Bitcoin is decentralized and is powered by what’s called Bitcoin miners.
These Bitcoin miners provide computing capability to the Bitcoin network which simplifies the intricate math problems required to power the community in exchange for a commission, paid out, needless to say, in Bitcoin. Bitcoin mining is the backbone of this Bitcoin industry that has already raised well over $1 billion in venture capital from the world’s leading venture capitalists.
But, the business is shifting quickly. Only a couple years back mining could be done from home, today it’s big multi-billion dollar organizations conducting the series building out enormous "farms" dedicated to one thing: mining bitcoin.
Marco Streng: Within only the past 2-3 decades, we’ve noticed a huge jump in tech, even outpacing Moore’s law. This has already changed over the previous year and mining has moved more and more from a brief term fast profit game to some slower, patient and more steady industry where the most efficient operations have a chance to yield large profit inside an extended frame. This tendency will clearly continue as we are approaching Moore’s law and the development of newer technology gets more and more expensive.
Q: Are you concerned about the inner conflicts happening in the business? (Blocksize limit, etc.)
Marco Streng: » I must admit there was a time especially beginning of the year where miners and core programmers opinions occasionally were fundamentally different which led to the ongoing scaling debate. Although this has been quite a lengthy and intense discussion over the community I am glad that there is consensus today about the second objectives and you will find great reasons to be positive and enthused about what’s to emerge. In fact the variety of solutions for on chain scalability such like the upcoming SegWit or Schnorr Signatures in addition to options for off chain scalability such as for example Lightning or Thunder Network make me more bullish on bitcoin than previously not mentioning Sidechains and Rootstock. It’s really amazing seeing those solutions being worked out!
Q: What other cryptocurrencies are the most intriguing out of a miner’s perspective?
Marco Streng: There are a lot of unique cryptocurrencies in the now booming altcoin market that are really quite intriguing for miners. The top candidates in my view are Ethereum, Dash, storage coins such as Sia or Maidsafe and the upcoming Zcash. There are a good deal over those and the listing is by far not complete, but those are certainly among the most interesting ones right now. We could be quite excited to see what the altcoin market which often is regarded as the playground for cryptocurrencies attracts up. Anonymous oriented coins or file storage based coins since those mentioned aren’t the only ones and there is surely a good deal more to come.
Marco Streng: When you look at the Gartner Hype ycle and consider 2014, we’re clearly in the "Peak of Inflated Expectations" point, then we dropped straight into "Trough of Disillusionment" and the industry as a whole is fighting it’s manner towards growth. There has been plenty of venture capital invested into some really amazing Bitcoin focused startups lead by entrepreneurs that are incredible. This funding is presently being deployed and an entire infrastructure is being built, which of course, takes quite a very long time. Where the business goes from here mostly is determined by those entrepreneurs and organizations to be certain they leverage this amazing technology to solve real problems that real people and businesses need solved.
This post was initially featured on Future of Everything.