A lot of people have asked me this question: “Is mining bitcoin evil?” It’s easy to understand their concern, considering how the world is being defined by the “financial bubble” that has inflated the value of all currencies. The financial bubbles are now poised to burst, and the “Bitcoins” which are at the center of this bubble are the last treasures of previous generations. In order to protect our currency and our financial freedom, we need to prevent a repeat of the runaway inflation that destroyed previous economies. One way we can do this is by preventing the mining of bitcoins.
There are two sides to the “Mining Bitcoin Problem”: Developers of software that mine the bitcoins and users of the bitcoin mining network. These two groups have conflicting goals. The developers want to increase the computing power of the entire network; miners want to increase their profits by ensuring that there is always a high amount of computing power on the network. Naturally, there is a delicate balancing act that needs to be used in order to make sure that both groups are protected. When the software is released for public consumption, this balancing act must be used carefully.
If you were to count the approximate number of computers that are currently mining for bitcoins, you would probably find that it is closer to one hundred billion. This number is actually an underestimate, because some people are both mining for profit and protecting their computer systems. To get a real count of how many computers are actively mining, you would need to include not only computers that are mining for profit, but also computers that are protecting themselves from outside influences such as malware, which can sabotage any efforts to mine the bitcoins. There are approximately sixteen trillion possible computers that could be compromised if malicious programs were installed on them.
In order to protect the network, the balance of power must be kept in balance. The way this is done is to ensure that the total number of confirmations that are performed every ten minutes is greater than half of the total number of transactions that are performed during the same timeframe. Because there are about sixteen trillion possible connections that could be exploited when bitcoin mining begins, this rule could potentially keep out attackers who do not want to lose their money in the process. It is important for people to understand that in order for the system to remain effective, it is necessary for the number of confirms to be fewer than the number of unconfirmed transactions.
As soon as the network becomes operational, a new class of people will start to enter. These are people who have recently made an investment in the new bitcoin technology. They will buy up large amounts of new bitcoins that they can then trade between themselves. They will then try to convince others to join them in their investment efforts. Because the new bitcoins that are being bought are being purchased for fewer dollars than the current supply, this is a way for the new bitcoins to be quickly consumed.
As these miners start to find profitable transactions, they will start to build their empires. Eventually, they will control the amount of available supply. This means that anyone trying to attack the system will not be able to change the ledger in any way. Therefore, it is nearly impossible for an attacker to double spend or interfere with any transactions. Since all transactions are controlled by the users, this makes the entire system completely immune from outside attacks.
Because of the nature of the blocks in the bitcoin network, it is impossible for an outside attacker to alter the ledger. This is also true for any attacks that may be directed at the mining process. All that would become possible is for someone to send fake transactions in order to trick the miner into sending unprofitable transactions. Since the transaction fees that are paid to the miners are based only on the successful mined block, it follows that anyone who sends fake transactions will get their fee paid for by the honest miners. This makes the entire system immune to outside manipulation and doubles spend. Transactions cannot be reversed, which makes it nearly impossible for someone to use this attack to steal money or transfer their possessions using this method.
As mentioned earlier, there are some people who are trying to “mine” bitcoins using “smart” math problems. Unfortunately, these problems are quite difficult and not many have been successful in their attempts so far. One reason why this type of attack is not very effective is that most miners are smart and don’t mine using mathematical algorithms, but rather by hand calculation. These “smart” miners still follow the main protocol of making sure that each and every transaction go through and that the ledger is valid. With this simple security measure in place, it seems likely that a new wave of mining for bitcoins will only continue to grow as more people come to understand the incredible benefits this technology provides.