Let’s say you’re in a classroom with 19 other students and the teacher decides the class is going to play a math game.
The rules of the game are simple, the teacher will reveal a problem on the board and the first student to correctly answer the problem will win 5 jelly beans. The answer to the first question will then be used to build a new question and the next round will begin.
Playing the game is completely optional and so the students that don’t want to play can simply study or sit quietly at their desks and ignore the game.
Also this week, in this classroom only, these jelly beans can be eaten, shared with friends, or traded in for something on the following list:
5 Jelly beans - one homework pass
10 Jelly beans - 5 bonus points on a test of your choice
15 Jelly beans - take this week’s math test as open book
20 Jelly beans - skip this week’s math test (guaranteed A)
So - do you think the students would want to play? Would you?
Essentially, this is how and why Bitcoin mining works.
Math problems = blockchain
Students = miners
Jelly beans = bitcoin
The ‘math problems’ are related to the blockchain and verifying the transactions within it (all of which is literally just a math problem) and miners are all simply competing to be the first to solve the problem so they can be the one to earn Bitcoin (Jelly Beans in our example).
Once one problem is solved, the solution is used as part of the next problem (which is basically how the bitcoin network can understand we’ve started the next round).
Now with all of that in mind, ask yourself this:
How many students want to play if we take away the chart and the jelly beans? Would the game still work?
Technically the game would still be the same basic math game, but there is no reward for winning a round. Sure the jelly bean component doesn’t affect the actual gameplay; but it drastically affects the motivation and excitement behind it (i.e. all the fun).
Now imagine that instead of asking the students to play during a class period, you were only going to offer the game to anyone that wanted to stay after school and play.
Given the awards above, I suspect you would get at least one or two to show up and compete (and you could improve the awards to improve your participation numbers)…but take away the awards and how many do you think would show up?
That’s what you are doing when you say Bitcoin is not tied to Blockchain…and basically that’s why I’m strongly in the camp of “Blockchain doesn’t *really* work without Bitcoin”.
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Kevin also talks in more depth about many of the these things around twice a month via his drip campaign and has a day job as CTO of Veritonic. You can also check out some of his open source code on GitHub or connect with him on Twitter @falicon or via email at kevin at falicon.com.
If you have comments, thoughts, or want to respond to something you see here I would encourage you to respond via a post on your own blog (and then let me know about the link via one of the routes mentioned above).