• TennHedge

Blockchain Is Bitcoin

You hear it far too often: “I’m skeptical of the value of Bitcoin, but I believe that blockchain has potential.” This sentiment is echoed by famous investors such as Warren Buffett, who want to appear like they are not ignorant to technological trends, but also wish to have an out from the "Bitcoin is a speculative bubble" criticism. I've got news for you folks: blockchain is Bitcoin.

What is the blockchain anyway?

The blockchain is simply a chain of "blocks," which are groups of Bitcoin transactions kept on a public ledger. These blocks are created every 10 minutes by Bitcoin "miners," who "mine" these blocks by using computing power to confirm Bitcoin transactions. Blocks occur in chronological order, and every Bitcoin transaction that has ever occurred can be timestamped, going all the way back to the genesis block. As long as the blockchain is controlled by honest miners and nodes (computers that validate the Bitcoin software), that is - none with ulterior motives, the Bitcoin network will remain the largest peer-to-peer and trust-less financial system on the planet.

The blockchain is secured by thousands and thousands of Bitcoin miners around the globe, who convert their computing power into "hash power," which is essentially the rate at which their computers can solve the complex algorithms that encrypt Bitcoin transactions. The greater the computing power securing into the network, the stronger the security of the network itself, as the likelihood of any one actor obtaining the necessary computing power to hijack the network becomes lower and lower (51% of the total hash power would be needed).

Let's take a look at the Bitcoin networks current hash rate:

As you can see, the amount of hash power going into the Bitcoin network is steadily increasing, which can be seen as a sign that miners are bullish on the prospects of Bitcoin's future value. This is also a sign that the adoption of Bitcoin is expected to increase, and it grows increasingly unlikely by the day that any one entity will ever be able to amass the necessary computing strength to overtake the network.

Ask yourself now, what is Bitcoin?

Bitcoin is simply the amount of purchasing power you have on the network, nothing more, nothing less. Bitcoin's value and the network's value are one in the same, and it is somewhat foolhardy to be bullish on the network, but bearish on the purchasing power used on the network.

Blockchain is Bitcoin.

This is a lot for a single mini-article, so we will continue these discussions in future posts.

Have a good evening!

Disclosure: I am long Bitcoin.

You should always consider seeking financial advice from a licensed advisor before making decisions with your money, and you should not consider anything I write as financial advice but merely my opinion. Getting your financial house in order is a prerequisite for Bitcoin saving, in my opinion.

Disclosure: nothing in this article should be considered financial advice and I am not a financial advisor. Do your own research as everything in finance carries risk.