In this episode we focus on miners, nodes, and the consensus mechanism. Here are the tastiest tidbits!
⛏️ Miners and Nodes: A Marriage Analogy
The consensus mechanism in crypto is to a marriage ceremony. Just as witnesses validate a marriage, miners and nodes validate transactions. The goal is to have as many witnesses as possible validate transactions.
🌐 Bitcoin and Ethereum
Bitcoin: Proof of Work (PoW)
In Bitcoin's PoW system, miners run complex calculations to produce a hash. This competitive process allows miners to propose the next block and receive rewards from the network, ensuring Bitcoin's security and integrity.
Ethereum: Proof of Stake (PoS)
In Ethereum's PoS system, nodes put up collateral to participate and can be penalized for malicious behavior, making the network more resilient against potential attacks.
📉 Bitcoin's 21 Million Hard Cap
The 21 million hard cap refers to the maximum number of Bitcoins that will ever be created, a limit that's reached through halving the miners' rewards approximately every four years, ensuring scarcity and value.
🌿 Ethereum's Evolution: PoW to PoS
Ethereum has transitioned from proof of work to proof of stake. This change has made the network more secure and efficient. The introduction of Ethereum's EIP 1559 allows for the burning of Ethereum during transactions, reducing the amount in circulation.
🧩 Complexity of Running a Blockchain Project
We reflect on the complexity of running a successful blockchain project. Understanding how value is generated and how the system is set up is crucial for anyone involved in the crypto space. Together we will make the future of crypto sweet!
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