Jan 4, 2016
Bitcoin Primer: Don’t Start with Miners
Posted by Philip Raymond in categories: bitcoin, cryptocurrencies, disruptive technology, economics, innovation, internet
I administer the Bitcoin P2P discussion group at LinkedIn, a social media network for professionals. A frequent question posed by newcomers and even seasoned venture investors is: “How can I understand Bitcoin in its simplest terms?”
Engineers and coders offer answers that are anything but simple. Most focus on mining and the blockchain. In this primer, I will take an approach that is both familiar and accurate…
Terms/Concepts: • Miners • Blockchain • Double-Spend
First, forget about everything you have heard about ‘mining’ Bitcoin. That’s just a temporary mechanism to smooth out the initial distribution and make it fair, while also playing a critical role in validating the transactions between individuals. Starting with this mechanism is a bad way to understand Bitcoin, because its role in establishing value, influencing trust or stabilizing value is greatly overrated.
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