Understanding how Cryptocurrency works can be very confusing to the uninformed individual. The concepts of blockchain, cryptocurrency, bitcoin, bitcoin mining, and centralized vs. decentralized ledgers are hard to understand. Using some common everyday verbiage, actors, and symbolism, the BBC put together a pair of videos to explain Bitcoin and cryptocurrency mining in language almost anyone can understand who has a basic knowledge of money. While the videos are close to 3 years old, the concepts and manner in which they are described are certainly still a valid educational tool.
The first video (here) walks through a comparison of a credit card transaction being done in a store and a cryptocurrency transaction being done at the same place. While not detailing a distrust of banking itself, the video does discuss trust and why a distributed ledger is better than a centralized one.
The second video (here) addresses the more complex concepts behind cryptocurrency mining using a maze as a visual aid to the “puzzle” miners need to solve. This video was shot before the “halving” event last year, so miners are getting 12 and 1/2 Bitcoins for solving the puzzle in the exampe whereas today they would get 6-1/4 Bitcoins. Garrick Hileman describes the ever increasing security that exists because of the ever expanding network of miners that are checking the validity of transactions that take place in the Bitcoin blockchain. The host also takes a tour through a data center doing Bitcoin mining to explain the computing taking place behind cryptocurrency mining. The economics of cryptomining are also explained where the factors impacting profitability are your running costs (the cost of power, the cost of miners (computers working to solve the puzzles), the cost of labor and real estate for your data center) and the exchange rate of your currency to Bitcoin. Further, the video discusses the concerns around the energy spent to power the world’s Bitcoin mines where that power might equate to as much as the total power used in Ireland – certainly this continues to emphasize the value of low cost power and carbon friendly consumption (green energy) that miners like EcoChain are pursuing!