Game Development Reference
In-Depth Information
Bitcoins - Pools and Mining
Bitcoin is the first fully implemented cryptocurrency. A cryptocurrency relies on
cryptography to generate and validate transactions that become the currency itself.
This data is decentralized, meaning it is stored on computers all over the world and
it is shared using peer-to-peer technology. Digital counterfeiting is avoided by using
a proof-of-work scheme; a concept that works well but cannot be easily explained.
Bitcoin uses SHA-256 as its proof-of-work scheme, but Litecoin, an alternative to
Bitcoin, uses scrypt, a password-based key derivation function. Bitcoin and Litecoin
are the two most popular cryptocurrencies. They are not compatible with each other,
and require different hardware or configurations to work or mine with them. As of
writing this chapter, there are more than fifteen currencies and hundreds of other
implementations trying to get a place in the spotlight.
In this chapter, we will learn more about Bitcoins, the mining of Bitcoins, and
managing your wallet. Using other cryptocurrencies is very similar to Bitcoin
because they all use modified code, based on the Bitcoin client.
Installing Bitcoind
Bitcoind is the software that connects you to other nodes in the network. There is no
single point of failure, and the more nodes there are the faster and more secure the
network becomes. Peers are rewarded with a transaction fee for the first validation
of a transaction and are assigned randomly.
After installing Bitcoind by using the following command, we have to synchronize
it with the network, which means downloading millions of transactions exceeding a
gigabyte in size to your Pi.
sudo apt-get install bitcoind
