Bitcoin mining education and history

[69er miner]

I thought I would begin a series of posts with interesting facts about bitcoin mining and some of its many components. I think its very interesting how everything came together and how existing ideas and technologies were used with new ideas. I hope you all enjoy!

SHA256

The National Security Agency (NSA) is a United States government agency that is responsible for the collection and analysis of foreign intelligence. One of the technologies that the NSA has developed is the Secure Hash Algorithm 256 (SHA-256). SHA256 is a cryptographic hexadecimal hash function that is used to secure data. SHA-256 is a member of the SHA-2 family of cryptographic hash functions, which were first published in 2001. SHA-256 is similar to the other members of the SHA-2 family, but it uses a different number of bits in the hash output. The output of SHA-256 is a 256-bit hash value, which is a unique representation of the input data.

SHA-256 is widely used in various applications that require secure data transmission, such as digital signatures, data integrity, and password hashing. One of the most notable uses of SHA-256 is in the cryptocurrency industry, where it is used to secure transactions on the Bitcoin network. an interesting function of this is the avalanche effect, any changes to the encrypted data, even the slightest change completely alters the hash value.

The NSA first proposed the use of SHA-256 in 2005 as a standard for digital signatures in the Federal government. The standard was adopted by the National Institute of Standards and Technology (NIST) in 2011 as a recommended standard for Federal agencies. The NSA has also developed other cryptographic technologies, such as the Advanced Encryption Standard (AES) and the Elliptic Curve Digital Signature Algorithm (ECDSA). These technologies are widely used in government and commercial applications to secure data and protect against cyber attacks.

Overall, the development of SHA-256 by the NSA has been widely adopted and used to secure important information. Its reliability and security has proven to be valuable to many different industries and organizations including the crypto industry, where as we know its Widley used in mining and the creation of bitcoin addresses.

more to come at a later date! but i promise if you decide to follow along I will try to keep it short, sweet and interesting!

 

[R-T-B]

I tried an article here some time ago to explain how it all worked.

It didn't exactly stick, but I tried. Best of luck.

 

[69er miner]

Thanks bud! Hopefully a few people will enjoy them and learn something

 

[69er miner]

Blockchain and bitcoin

In the last article we discussed in short SHA256 and its history, as well as a short introduction to the technology. We can't talk about bitcoin and mining without mentioning another key pillar of this industry and that's Blockchain!

Blockchain is a decentralized, digital ledger that records transactions across a network of computers. It is a highly secure and tamper-proof technology that is revolutionising a wide range of industries.

At its core, a blockchain is a chain of blocks, each block contains a number of transactions. When a new transaction is added to the blockchain, it is added as the most recent block. Each block is linked to the block preceding it, this creates a chain of blocks that stretches all the way back to the first block, which is called "the genesis block."

One of the key features of blockchain technology is that once a block is added to the chain, it becomes immutable, it cannot be altered or deleted. This is because each block contains a unique "hash," (we spoke a little about this in the sha256 article) the hash is a string of characters that serves as a sort of digital fingerprint for the block. If someone were to try to alter the contents of a block, the hash would totally change due to the avalanche effect, this would make the block and all the blocks that follow it invalid.

Another key fundamental of blockchain technology is that it is decentralized, meaning that there is no central authority controlling it. Instead, the blockchain is maintained by a network of computers, these are known as "nodes," the nodes work together to validate and record transactions. When a new transaction is added to the blockchain, it is broadcast to all the nodes in the network. The nodes then work together to validate the transaction in a majority ruling scenario, then it is added it to the most recent block confirming it via the network.

The most well-known application of blockchain technology is Bitcoin, Bitcoin is a digital currency that uses blockchain to record transactions. However, the potential uses for blockchain technology go far beyond digital currencies, as immutable decentralised networks take away the issue of trust and provide full transparency. Bitcoin is a digital currency that uses blockchain technology to record and verify transactions. At its core, Bitcoin is a decentralized system that allows for peer-to-peer transactions without the need for a centralised institutions such as banks.

When we send Bitcoin to someone else via an exchange or wallet, we are broadcasting the transaction to the network. Nodes (computers) connected to the network are known as "miners," the miners then compete to validate the transaction by solving a complex mathematical problem (essentially decoding). The first miner to solve the problem adds the transaction to the most recent block and is rewarded with a small amount of Bitcoin.

 

[69er miner]

The importance of an immutable ledger!

last time we discussed bitcoin and blockchain.

Throughout history, assets such as property have been kept on ledgers which were safeguarded by an authority such as a bank or government. In most cases these ledgers were not immutable, meaning that they were subject to tampering or even deletion. Even today many governments still only keep housing ownership records on physical ledgers. This is cause for concern because they are vulnerable to circumstances such as natural disaster, theft, tampering or deletion. Unfortunately without proof of ownership anyone could lay claim to your property.

This is where blockchain comes in! We discussed Blockchain in our previous article and the purpose of this one is to highlight it’s immutable nature.

One of the biggest features blockchain is often associated with is its immutability. Blockchain by design is an immutable database in which you cannot manipulate the data that’s already stored within. The hash value of an existing block is a unique value determined by the data held within. So depending on the block’s content a unique hash value will be assigned that will identify this block only, and never an altered or different version of it. Therefore each block can reference or point to the block which precedes it, meaning blocks always reference their previous blocks and their corresponding hash.

Lets take a look at simple transaction to further break this down. Kevin wants to send money to Lisa. This transaction is represented as a “block.” This block is broadcast to every member of the network. The people in the network approve whether the transaction taking place is valid. As more transactions go on, a chain is formed (Blockchain), that visually show transparency in transactions. Lastly, the cash is sent from Kevin to Lisa, and the transaction is complete.

So in this example, blockchain’s immutable nature is visible, making it flawless. The issues surrounding tampering, deletion, hacking etc are resolved! The fact that we have validations combined with the blockchain hashing process and cryptography makes it immutable and therefore an obvious solution for recording everything to do with assets to monetary transactions and even personal records.

Do you think blockchain will take over as the universally adopted way of doing business? Let me know your thoughts on the comments.

 

[A&P211]

I love you NSA.

 

[P4-630]

Just ban it all!!

 

[ir_cow]

When people realize its easy to track people since the ledger is public

 

[A&P211]

Just ban it all!!

I started mining in the 1st BTC mining boom with lots of 7970 and 7950s, then the 2nd boom with ETH and 1080s and a few 1070s, I still dont understand what is it mining. Is it mining an old language that died out or trying to map out the entire universe.

I still say, burn it all.

 

[Dr. Dro]

The question I pose is one of practical utility; what can someone do with blockchain technology that cannot be done better, and in a more secure and efficient form with anything else?

 

[Frick]

The question I pose is one of practical utility; what can someone do with blockchain technology that cannot be done better, and in a more secure and efficient form with anything else?

I've seen this question asked a lot but never a satisfying answer.

 

[Dr. Dro]

I've seen this question asked a lot but never a satisfying answer.

I must confess, that was the intention

 

[ir_cow]

blockchain is good for anti-theft. pretty useless for legit money transactions.

Raven coin is a good example of how the automotive industry could stick a QR core on each part using Raven coin type blockchain. It would cost the company nothing (if they minted coins). Public ledger and can be updated to say the car or part was stolen. completely kills off the grey market.

 

[Dr. Dro]

blockchain is good for anti-theft. pretty useless for legit money transactions.

Raven coin is a good example of how the automotive industry could stick a QR core on each part using Raven coin type blockchain. It would cost the company nothing (if they minted coins). Public ledger and can be updated to say the car or part was stolen. completely kills off the grey market.

I mean, original vehicle parts already have a serial number that matches the chassis, this is known as a VIN and it is unique to each and every vehicle built. The registry of this identification number is usually tied to your vehicle's license. Cops searching for stolen cars and workshops that deal in illicitly obtained parts will often be caught by a VIN check. Wouldn't that completely eliminate the need for the use of the blockchain as it is? Unless your vehicle is also in an illegal condition

 

[ir_cow]

I mean, original vehicle parts already have a serial number that matches the chassis, this is known as a VIN and it is unique to each and every vehicle built.

Yes, but the way chop shops work they take a legit wrecked cars frame. Remove everything from a the stolen car and put it on the rebuilt title one. Can't trace that. However if ever part had a VIN type number, this would hinder sales as now each part is registered and not just the VIN/ Car Frame.

Edit: Chop shop stuff comes from a VICE documentary. I have no experience with this myself.

 

[dragontamer5788]

It probably should be noted that SHA256 isn't very important, as much as the concept of a hash itself.

The goal of a cryptographic hash function is to create a one-way trapdoor function. That is, f(X) -> Y, where if you publish Y, it is "impossible" to discover X. However, this is a "trapdoor", because f(X) "should be easy" to compute. (IE: "If you already know X", the trapdoor activates and its really easy to verify that Y and X are related).

That's it. Any function that satisfies this requirement (F(X) easy to compute, but "impossible" to reverse) is a good hash function. Older hash functions (MD5 and SHA1) have patterns discovered where the Y back to X path is being discovered by mathematicians. No such path is known yet for SHA256.

 

[Dr. Dro]

Yes, but the way chop shops work they take a legit wrecked cars frame. Remove everything from a the stolen car and put it on the rebuilt title one. Can't trace that. However if ever part had a VIN type number, this would hinder sales as now each part is registered and not just the VIN/ Car Frame.

Edit: Chop shop stuff comes from a VICE documentary. I have no experience with this myself.

Usually when parts are legally harvested from a wreck they accompany documentation explaining this condition, I could maybe see it serving as proof of purchase or proof of origin, but then again any old paper slip signed by transit authorities could fulfill this role

 

[ir_cow]

Your assuming everyone isn't in on it. Maybe the parts place just makes stuff up. But the dealership or the new buyer can trace it back themselves.

 

[Vario]

I propose OP should discuss proof of work versus proof of stake models.

Vulnerabilities such as 51% attack, etc.

 

[Bitboyoo]

I'd love to see how , hypothetical of course a 51% attack would play out