November 24, 2018
by Sharon Moran
I wouldn’t advise anyone to buy bitcoin or other cryptocurrencies without learning as much as they can about them first. Mining is a different story. Obviously, you don’t need a stem degree to be a cryptocurrency miner but if you’re successfully mining cryptocurrencies from home, you’ve likely achieved a requisite level of knowledge just by setting up your mining environment and syncing with the blockchain, etc. (Don’t forget about these Mac-friendly cryptocurrencies to mine.)
It’s not unreasonable to emphasize the importance of learning about bitcoin mining before buying bitcoin and even practice mining by hand. One tech-savvy bitcoin enthusiast describes how to do it.
Here’s what you’ll learn if you read Ken Shirriff’s blog entry, Mining Bitcoin with pencil and paper: 0.67 hashes per day.
1. If you didn’t know this already, you’ll learn that the algorithm that the Bitcoin protocol uses a cryptographic has function called SHA-256, and to provide added security, it applies the function twice.
2. It’s possible to mine Bitcoin with pencil and paper by performing the algorithm manually, but obviously, it’s not practical.
3. It’s harder to find a successful hash than it is to find a specific grain of sand given all the grains of sand on Earth.
Before you buy bitcoin, read this: the original Bitcoin whitepaper by pseudonymous Satoshi Nakamoto. It’s only 8 pages, 9 pages if you include the reference section. Since I mentioned the reference section, I’d suggest reading every one of the 8 listed references. That’s probably a wordsmith/crypto enthusiast’s fantasy though, so please at minimum at read the original whitepaper.
You’ll learn about timestamps, proof-of-work, honest nodes, simplified payment verification, and the consensus mechanism. If you read the references mentioned, you’ll learn about two electronic cash systems that predated Bitcoin, B-money by Wei Dei and Hashcash by Adam Back. Notably missing from the reference section is any mention of Nick Szabo’s Bit gold, which has led some to suspect that he is actually Satoshi.
If you don’t enjoy reading for fun, (you probably haven’t made it this far!), then just watch the video I linked in this article. If you’re new to cryptocurrency and you follow one or more of the above suggestions, you’ll walk away knowing more about bitcoin and digital currency then before you started.