Bitcoin For Non-Technical People #6 – What Is Bitcoin Mining, Miners, & Mining Pools?

This person processing this data… because there are thousands and thousands of transactions in the world that happen in that ten-minute span. So what happens is one person could not possibly have enough computing power to process all these transactions that quick.

So what happens is this person, this processor might group up with this one and this one and this one and this whole group of people right here is what we call a “pool of processors”,

This pool of processors will go out there and put all the computers together okay and connect them together and make like a super-duper giant computer and what they’ll do is they’ll process that next block of information.

So their computer is running 24 hours a day making all processing all these payments and they’re hoping that they get that next block of information before these other groups of people.

It’s rare, it’s extremely rare that you will find one person processing all these transactions. It’s usually in groups and obviously, some groups are bigger, some groups are smaller, right?

And there’s no rhyme or reason to who is going to get it first, the bigger groups have a higher probability but it doesn’t always mean they’re going to get the next block, okay?

Like I said that one group of people processes and they get the next block to go into the public ledger here called the blockchain, that person gets a 25 Bitcoin reward and at this moment. Right this moment on November 23rd as I’m talking these 25 bitcoins is worth $837 dollars apiece?

So we take 25 bitcoins times $837, right? That is worth $20,925 US. So for whichever one of these groups of processors can get the next block of information. That’s a huge incentive for someone to go out there and try to process these transactions for everybody so I mean there are these thousands of guys running around there saying, “Hey man, I’ll process your transaction for you” in hopes that they’ll hit that reward.

Keep in mind that every 10 minutes, thousands of these people are processing these Bitcoin transactions from around the world, however, only one group is going to win that reward.  So how do we know how does the system know that they get it correctly?

The method is extremely difficult and with my arithmetic level, I am not qualified to explain to you the mathematics of how they go about going through the history of the blockchain. But let me just do an example real quick for you of who has the money, who doesn’t, if it is a legit transaction or not.

If you guys remember back in school when we did the math. If we try to find the square root of something like 4, it’s very simple, it’s 2 time 2. Now if we try to find the square root of 5, it’s extremely more difficult. It’s not something that you can do off the top of your head. You would have to get a calculator to do it, right? And this calculator does it, but it’s going to be two points something now.

However, when I did the 4, I could just go 2 times 1 is 2, 2 times 2 is 4. Now with 5, I can’t do that. I can’t just go 2 times 2 is 4, 2 times 3 is 6 so it has to be somewhere between 2 and 3 the answer right? So I can go 2 times 2.1, 2 times 2.2, 2 times 2.3 until ultimately I get the answer to where I know that the square root of 5 right equals two point whatever.

Now it would take me a long time to do that, however, when you go the double check to make sure I did it correctly. It only takes you a blink of an eye because all you have to do is multiply the two numbers together and you’ll get the answer that comes out to be 5 and if it’s correct and you know that I did it correctly.

So I could take a day trying to figure out what the square root of 5 is but it would only take you a brief moment to check it to make sure it was correct. And it’s the same way here when one group here figures out what the next block of information is, it might take this group a long time and lots and lots of computing power.

It’s mean hundreds of computers or whatever to figure it out but as soon as they submit that and say, “Hey, man I got the next block of information here.”  It only takes a brief moment for all the other guys to double-check it. Because if they disagree on it, that person does not get the reward

So, like I said this is very non-technical, okay, if you’re watching this and you’re a technical person and you’re saying, “Hey Tai, you’re not explaining that correctly okay?” I just told you at the beginning of the video that all I know is arithmetic so give me a break.

Now,  one of the first things that you hear about when you get into Bitcoin is “mining”. It confuses the hell out of people and I wish that if I could go back to when Satoshi first came out with this system, I would ask him and beg him not to use the word mining because it confuses everybody that tries to learn about Bitcoin. That’s the reason why you never hear me say “mining”.

The words “mining” until now and you can hear me say the word “processing”. When you hear people in the news, in the media and online and you hear the word “mining”, replace it with the word “processing”, okay. So whenever you hear me say that these people are “processing” all the transactions for everybody, you’ll hear a lot of diehard Bitcoin enthusiasts call it “mining”.

That process where your computer is going out there and and and and correct a double checking all the transactions for everybody and processing those transactions, that process in the Bitcoin world is called mining so these people these people I call processors…

They’re really the technical term for and remember I don’t want to get too technical in these videos because I don’t want to confuse people but the term that people use to refer to these processors is called “miners” and each group of these people right that processes all these transactions are called “mining pools”. So basically, it’s just a group of people processing transactions but they want to use a very fancy technical term called “mining pools” to confuse us public.

So I hope that answers several questions of how the blockchain is used to authenticate that the person that you sending me the money is legit and me that I am the correct person that you are sending it to, so it doesn’t accidentally bill to someone else.

That’s not really a new technology because all the software companies use it right now. The emails that I send to you back and forth, they’re using this technology so that’s not really new and that’s not something we have to worry about, because that’s pretty secure and that’s pretty tight now, okay.

Now “double spending” is the new technology to prevent you from sending me the dollar and then sending it to someone else when Satoshi made this ledger public, this ledger is also called “the blockchain”, he eliminated the double spending issue and that was like the biggest issue that people had that they couldn’t invent this new currency

That’s not fair! Because no one could figure out how to eliminate that double spending. If you can do that all day then that would be you’d be the same as the 1% bankers here that only benefit 1% of the population on Wall Street.

So, it’s pseudonymous. Instead of using my name or your name see like if you want to send me some money, you have to tell your bank, I want to send Tai Zen you know, he’s from PrisonOrFreedom.com and here’s is his bank account number, his ID, driver’s license and a bunch of nonsense.

In Bitcoin, you just have an account number which is also called a Bitcoin address and you just send to me and boom. You don’t have to know what my name is, if I buy a service from you or product from you. I don’t have to give you my personal information and none of that nonsense. I just give you this send a Bitcoin to your address, you send me whatever it is and that’s it and the deal is done, right.

The last thing is that the people, the processors who run out there and process all these money trains these Bitcoin transactions. Why? 

Because there’s no central bank to process it so it’s been decentralized. Because the government cannot go in there and shut down each one of these people and you might think like, “Okay, they can do whatever they want.”

Well, not exactly because there’s thousands of people and there’s no way they can go out there and will shut down everybody. It’s just like the BitTorrent peer-to-peer network. They’ve been trying to shut it down for years now and they still haven’t been able to do it and that’s what Satoshi modelled his blockchain and the Bitcoin system off of was the peer-to-peer BitTorrent network so that he knew that when this succeeds, everybody in the 1% that’s in power they don’t like to lose their power.

They’re going to want to try to destroy this and by decentralizing it and making it so that there’s no one central location that all the payments are being processed, right? Then you don’t have to worry about it. In the next video I’ll talk about the Bitcoin account and the Bitcoin wallets. So let’s just stop here, take a break and then we’ll continue on to the next video.

Thanks for watching this video about Bitcoin for non-technical people. If you like this video and you want to subscribe to my blog so that you can get future videos I invite you to go to PrisonOrFreedom.com/newsletter and subscribe there and I’ll send you some more future videos.

And you know I like to talk about things that allow people to find freedom in their health, their wealth, their relationships, things like that. So it’s a bunch of good stuff, no spam, no nothing and thanks for watching this video and if you have a friend that’s confused about Bitcoin and this revolutionary technology, please share this video with them.

Thanks for watching this video and I’ll see you in the next one!

 

Slide
Cryptocurrency Investing Blueprint™ Course Cover

We believe you should NOT be in front of the computer all day making short term, in and out trades. That is no different than having a “day job” at home instead of at the office. After completing the blueprint, you will learn how to PUT your money to WORK for you in the crypto market.

Slide
Cryptocurrency Investing Bootcamp - Tai Zen & Leon Fu Dot Com 6

If you want to GET RID of the anxiety, nervousness, self-doubt, and FEAR of picking the “wrong” cryptocurrency and losing your hard earned money… then don’t think twice about it; get the blueprint today because it’s the perfect fit for you.

Slide
Cryptocurrency Investing Bootcamp - Tai Zen & Leon Fu Dot Com 12

You will learn “The VC MAN Method™” that we developed that allows you to systematically identify “A” Tier cryptocurrencies worth investing in, that are not scams, by identifying the 5 Key Traits of a Profitable Cryptocurrency.

Slide
Cryptocurrency Investing Bootcamp - Tai Zen & Leon Fu Dot Com 6

You will learn how to properly exit a trade so that you will be profitable even when you are wrong over 60% of the time! Imagine being RIGHT less than 40% of the time in your crypto investing and still be profitable! You do not have to be RIGHT all the time to be successful in cryptocurrency investing!

Slide
Confident Bitcoin and Cryptocurrency Investor

If you have the burning desire to make Life Changing Profits™… Faster Than You Ever, if you are SICK & TIRED of struggling to figure things out alone or listening to people who don’t make a living from crypto investing… then this blueprint is a perfect fit for you.

Slide
Confident Bitcoin and Cryptocurrency Investor

YES, there is a guarantee! If the Cryptocurrency Investing Blueprint™ did not deliver on what was promised on this website, simply make a request within 30 days for a refund, and we will cancel your student access and REFUND you back 100% of your purchase in US dollars.

Now there’s no excuse! If you’re serious about making Life Changing Profits™ in crypto investing, then click on the link below and order your copy of the Cryptocurrency Investing Blueprint™ immediately!

2 Responses

  1. With China banning bitcoin will the USA follow suite. what is the future for bitcoin if governments find ways to ban the use of it, can they actually stop Bitcoin?

    1. It will be very difficult for governments to ban bitcoin because there is no central location or company to ban. Also I don’t see that happening because why would a country ban a new technology that can help their country. The issue in China is not about banning bitcoin but about banning exchanges that are not following government regulations.

Leave a Reply