What are Bitcoin miners? They’re competitive accountants

By Pune Media On Sep 25, 2024 47

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What are Bitcoin miners? They’re competitive accountants

“Bitcoin mining is simple, but it’s not easy,” Kurt Wuckert Jr. stated in a recent interview on the Untangling Web3 podcast. The CoinGeek Chief Bitcoin Historian delved into what mining is, why only proof-of-work (PoW) works, what he’s doing with GorillaPool, and the danger that the entry of legacy powerhouses like BlackRock poses to the digital asset sector.

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It was Wuckert’s second appearance on the podcast; in his first, back in July, he discussed Bitcoin’s rich history, from its origin to the Bitcoin civil war and what the future holds.

What’s block reward mining?

Miners are, in the most basic sense, “just competitive accountants,” Kurt told hosts Jack Davies and Alec Burns. Whenever a Bitcoin transaction is broadcast, the miners compete to reconcile the unconfirmed transactions “better, faster and cheaper than the other computers” and propose the next block to the blockchain.

Kurt believes most people became miners because they thought it was the easiest way to earn Bitcoin. This was the case up until around 2012, when mining became commercialized. A lot has changed since then, and today, mining is “the hardest way to get Bitcoin.”

Mining is no longer tenable for small household miners, especially on the BTC blockchain, where billion-dollar firms now control the sector. Hosted and cloud mining solutions have made the industry more accessible, but most are still beyond the reach of retail investors, requiring upwards of $20,000 to get started.

Initially, any laptop with an internet connection could mine Bitcoin. And then came the age of hashing and ASICs, an integrated circuit that “looks for SHA-256 hashes very efficiently but is inefficient at every other thing.”

Only proof-of-work works

Whenever Bitcoin mining comes up, the inevitable debate over proof-of-work vs proof-of-stake always ensues. While Bitcoin has retained the PoW consensus mechanism it pioneered, several other digital assets, led by Ethereum, have switched to PoS.

Wuckert first pointed out that as heated as the debate is, “the actual issue is more philosophical than technical.”

Delving into the history of PoW, he noted that it predates Bitcoin, which was first created as a solution to the scourge of spam emails. It was eventually picked up to solve digital cash, with Hal Finney among the first to develop a practical application. Finney worked with Satoshi Nakamoto in the early days of Bitcoin.

Proof of stake emerged as an alternative, where rather than burning energy to convey a trustworthy message, validators are picked based on the number of tokens they own.

“That creates its own trust issues…just because you’re rich doesn’t mean we should trust you.” This is the same problem that Bitcoin set out to solve in the first place.

GorillaPool and Bitcoin data indexing

Kurt founded GorillaPool, a leading community-led BSV mining pool. It amalgamates hashing power from hundreds of retail participants to mine BSV. This amalgamation allows it to compete with better-funded corporate players while ensuring the sector retains its decentralization.

GorillaPool is active in all Bitcoin mining spheres, from validating transactions and collecting unconfirmed transactions to its mempool to providing infrastructure that allows commercial application builders to deploy applications on the BSV network.

GorillaPool is also behind JungleBus, an indexing subscription service that filters massive amounts of raw data and provides it to users in a useful format.

JungleBus is leveraging the one thing that is most valuable about Bitcoin—the data.

“Data is the most valuable asset in the world today, and at the same time, the most undervalued asset. No other asset becomes more valuable as more of it is created, except data,” Wuckert said.

This means there’s an incredible opportunity to monetize data, and “if you have a tool that allows you to monetize every bit of data, then you’re sitting on the goldest of the golden goose eggs.”

Wuckert wants to position JungleBus as the runaway leader in Web3 ISP service provision, anchoring every other decentralized application that seeks to build on the blockchain.

Bitcoin’s data ledger abilities have also been getting a bigger spotlight in recent years due to the rise of AI, he added. While AI is transformative, its impact is limited to the quality of the training data. With AI now dictating critical aspects such as employment, mortgage approval, healthcare service provision, and more, it’s never been more important for the world to insist on quality data.

Watch: Understanding the changing topology of BSV

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