Why is Mining Blockchain (Why Blockchain Makes Money)

08/15/2023 11:31 • Tech Ticker • 123 views

Why is mining blockchain? Bitcoin and Ethereum are both decentralized, immutable, secure, and technologically advanced cryptocurrencies based on proof-of-work consensus. These cryptocurrencies store data and facilitate value exchange in distributed networks, with verifiable transactions and traceability. As more mainstream assets are tokenized, the relationship between them becomes more complex. However, for certain applications, blockchain technology not only provides more efficient services, but also offers users greater efficiency and a better experience.

What is blockchain?

We know that blockchain is a new type of internet protocol that enables information sharing through algorithms, ensuring consistency in the transmission of information between chains. This means that anyone can use a computer system anytime, anywhere to meet business operation needs.

Therefore, when we need to consider certain issues in the computing process, we turn this idea into reality— because our computing process consumes a lot of electricity and each processing action may require significant resources. This leads to a huge energy wave.

This is why we believe that blockchain can solve the aforementioned problems, while ensuring the security and performance of blockchain technology.

So, after the emergence of Bitcoin, people have been focusing on a promising application: the essence of blockchain is the concept of “trust.” So what exactly is trust? Let’s take a look at how Bitcoin works and how it functions.

If Bitcoin had not become a universal means of payment, its operation would have been simple. However, not all commercial transactions rely on Bitcoin as a settlement unit, such as banks or credit card companies, who choose to send payments using their own accounts; on the contrary, their funds are held by customers themselves. Because Bitcoin is not controlled by a single entity, but rather a globally distributed database composed of multiple institutions, it is difficult for Bitcoin to return to its starting point. Of course, “trust” remains the key reason only when you have your private key.

Because of this, “trust” has become the core idea of Bitcoin. It is created through mathematical methods and is the fundamental knowledge required to meet the credit system needs of different economic entities.

Now there are many different blockchain protocols, such as Bitcoin Cash, Ethereum, EOS, Tezos, NEO, and more. However, the most important part is still the problem of Bitcoin itself— it only appears disproportionate fluctuations when it meets certain standards. In fact, the price of Bitcoin is still relatively low. Although the price of Bitcoin has been rising over the past year, it is still unsustainable in the long term, especially with the entry of more financial products and services.

Why Does Blockchain Make Money

According to Tencent Technology, why does blockchain make money? Many people believe it is because blockchain can solve trust issues, improve efficiency, and allow people to profit from it. However, it is not easy to achieve this in terms of investment. The volatility of cryptocurrencies like Bitcoin makes it risky for investors. For example, would you be willing to invest a portion of your funds to buy a Bitcoin or Ethereum? Can you afford the cost without fully covering it in order to purchase a Bitcoin or Ethereum?

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Why is Mining Blockchain (Why Blockchain Makes Money)

Why Does Blockchain Make Money

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