Why does blockchain need mining (Why is blockchain valuable)?

Why does blockchain need mining? According to news from ChainNews, the topic of “mining” has been present recently. Why does blockchain need to “mine”? This is because blockchain itself is a very new thing: a new concept and way of thinking is emerging – the idea of decentralization, consensus mechanisms, and various application models (such as trading platforms), and this cognition has been widely accepted and constantly changing in the internet era. In addition, there have been many fraudulent activities in the development process of blockchain, such as some criminals using technical means to commit fraud, etc.

From the current perspective, Bitcoin and other cryptocurrencies do not have any intrinsic value, but they are only at the beginning of speculation. If one day they can really create more economic models or asset rules than before, then it will definitely generate a larger economic bubble, right?

So why does blockchain still need to “dig a hole”? It is based on the following reasons:

First, we need to understand what blockchain is, what is blockchain? Let’s start by understanding it briefly. The so-called blockchain is the process of recording a certain piece of information or event in a block for bookkeeping. This record will allow each node to verify these data and pack them into small pieces of data, then encrypt them with hash values to achieve more effective confirmation of transactions. So as long as a person inputs specific information, they can get the corresponding result.

Secondly, for ordinary users, participating in this activity requires attention to be truly “safe” only when it passes strict audits and can obtain sufficient validity. For example, familiar internet service providers usually do not require you to join the network, they will only allow access to the website and use its functions after a specified time.

The third point is that blockchain is not an omnipotent software, it is completely determined by the code. If you want to know what things can become the next generation of distributed systems, you must have a dedicated database to store your data, otherwise it will cause the collapse of the entire system.

The fourth point is because many people may not know how to understand what blockchain really is. But in fact, most people have heard of Bitcoin, although Bitcoin has not really come into existence. And due to its anonymity and irreversibility, many people feel that they do not understand this thing at all, thus becoming victims of scams. However, in fact, people have not realized that Bitcoin is a very high-risk investment tool. Despite this, as more and more people hold Bitcoin as their investment tool, its security issues are still questionable.

Why is blockchain valuable?

Why is blockchain valuable? In traditional financial investment, if investors want to buy cryptocurrencies, they must understand how this industry came about.

Let’s take a look at what blockchain is, how much value it has? What are its advantages and disadvantages? We will analyze it from two perspectives: Bitcoin and Ethereum, and the prices of these currencies.

The first question is, do people know about “blockchain”?

Actually, many people have heard of a term called decentralized network, which is a trust-based encryption technology based on cryptographic algorithms. This encryption technology is called trusted computing, so many people say that blockchain is like a computer on the internet, but in fact, it does not have any practical meaning. Then what is a decentralized network?

For example, Bitcoin, it is a public chain system composed of a group of data specifically for transaction verification; while Ethereum generates, stores, and provides to other participants through smart contracts, and can be freely scalable.

But now people’s understanding of blockchain technology is still relatively vague, and even some people think it is a strange thing because there is no reason why decentralized solutions cannot be applied.

Therefore, when it comes to whether blockchain is worth buying, we should first pay attention to its price. Secondly, the first cryptocurrencies they were exposed to were Bitcoin and Ethereum. At that time, most mainstream exchanges supported the trading of Bitcoin, so they chose Bitcoin. However, Bitcoin has become one of the largest virtual commodities in terms of global circulation market value. Although there are many altcoins running up and down in the market currently, veteran projects like EOS are still unable to make users profitable, which has also caused many ordinary players to sell tokens at a loss and suffer heavy losses, especially with recent blowout incidents. (Note: Currently, most domestic ICO platforms will die due to fraudulent practices, and once they are attacked by hackers, they will cause a major economic crisis.)