Everywhere you turn, it seems there is a mention of crypto currency, or the most renowned of them, Bitcoin. Elon Musk joked that he was giving his mother crypto currency on Saturday Night Live, investors are debating if this new form of currency is going to last, and there is a proliferation of Bitcoin billionaires who invested in its infancy and have seen the most volatile growth of this newcomer in the financial world.
How does one navigate this new technology and potentially invest in it, let alone begin to wrap their head around what it is or what is happening? We’ve been working with crypto technologies for years, so let us help explain what is going on and point you to some resources to help you understand the world of blockchain.
To understand blockchain, we need to first understand how data has traditionally been stored and accessed. Data would be put into a tabular form of database, or into tables, something like what you see with Excel. In fact, many databases have their start with Excel and the formatting of these databases is conceptually the same. Programmers call data with their programming language from the cell location and display it on the application / software. However, data changes are overwritten in a database structure, which means the data accessible is the most current data that was inputted. Another aspect of the traditional data base is that it is hosted, or the space used to hold the data, is on one computer or server.
Blockchain differs from traditional databases by how the data is stored and retrieved. Instead of it going into a table, it goes into a block. When there is new data to input, it is recorded in a new block instead of being overwritten. These blocks are strung together into a chain like structure. The advantage is that a historical timeline is created of how the data changed. The other aspect of blockchain is that the data / or chain, is not hosted on one computer, but instead is distributed over a network of computers, or is decentralized.
>>>> What is Blockchain?
Crypto Currency / Bitcoin
These two differences with blockchain storage and retrieval of data makes it invaluable when used for financial transactions. That is where these virtual currencies or coins come into play. Blockchain is the historical ledger of the transaction of the coin. No points in the ledger can be deleted or altered, creating a transparent account of the transactions. Also, the data storage is distributed across multiple computers, so no one computer can destroy the complete chain of data.
>>>> Bitcoin Explained and Made Simple
The computers in the network have access to the blockchain data, but share the workload of processing the algorithms, or math equations, that handle the encryption of the transactions. These computers also close out the blocks in the chain. The computers doing the mining are built specifically for the task so they don’t look quite like your garden variety of desktop computers. The computer power needed to process these transactions consume large amounts of energy, and so miners aren’t something you can just plug in, at least more than one of them. Special considerations with electricity need to be made when running mining computers.
>>> What is Bitcoin Mining (In Plain English)
Discovering New Coins
Your miner works in a pool with other miners to confirm all the transactions to close a block, but because there are so many pools out there, they are competing to close the same block. This competition creates some issues in that all the miners are trying to close the same block and use massive amounts of energy to do so, but that only one pool earns the coin that is now released.
This all brings us to the crypto containers. For larger configurations of miners there is a need for dedicated space that allows for the power consumption, cooling, and storage of these specialized computers. We have found that modifying shipping containers is a great way to create these portable data centers, which are very similar to a server room. Certain container builds allow for these to be placed on a site with electrical connection, provide adequate ventilation while also filtering the outside air so dust and contaminates don’t reach the mining computers. Some containers also have remote management so the containers can be placed in rural areas.