"Providing Efficient, Secure & Green Blockchain Power To The World"
Inspired by Satoshi Nakamoto
During the month of August we are winding down our very successful cloud hashing program where we had more than 1500 international customers renting petahashes of Bitcoin transaction processing from our Clear Sky facilities in northern Sweden.
As our business is changing shape from selling hardware and letting hash power to focusing on supporting and processing transactions in the Bitcoin network we're also updating our company tagline.
Here's an explanation on why we believe in the new Blockchain-based "bitconomy" and how we see ourselves fit into the ecosystem.
It's still early days...
Bitcoin is not going mainstream overnight. The technology is difficult to grasp, its promises often confuscated by copycats and Bitcoin has opponents in the financial establishment it is looking to disrupt.
However, as Bitcoin is superior to today's fiat currencies and settlement systems it will slowly eat itself into most value-transferring systems over the years to come, gradually becoming entrenched everywhere – acting as a foundation for the new bitconomy online.
Just as with the web, that grew powerful slowly over 20 years, Bitcoin will be chosen by person after person, app after app, system after system, year after year.
Our view reflects the genuine insight that Bitcoin is a wholly new innovation/discovery, as important as the discovery of iron or the invention of steel, the printing press or the personal computer.
A cut-out from one of KnC's Bitcoin transaction processing facilities.
Bitcoin derives its value independently and from within
Bitcoin uses the concept of "proof-of-work" where computers "work" trying to find a cryptographic solution to confirm a "block" of transactions. The results prove they've "worked" (spent energy) in the process. The solution triggers the predetermined block reward inflation (currently 25 bitcoins per block, approx. every 10 minutes). As usage grows transaction fees will become a more important part of the reward. In this way the network extracts security from incentivizing participators to continually increase the security of the world's most powerful processing network, while creating intrinsic value from within through its native token's properties (bitcoins). The sheer number of computers participating in the network – its increasing (competitive but collective) "hashrate" – ensures the system's integrity.
This all happens simultaneously using the same mechanism (the proof-of-work mining). Energy must be spent to "mint" each bitcoin. Minting through proof-of-work-mining proves a certain amount of energy was spent at the particular time the bitcoin in question was "minted" (mined). It's the open, decentralized nature of Bitcoin that creates this level of security; open to anyone the constant race positions the network well ahead of any attacker. As a side-effect this vast number of processors (connected to the Bitcoin network via beefy nodes) results in a speedy and always-on network.
Creating An Immutable Chain Of Events
The proof-of-work-solution creates a chain of "blocks". Each block contains info on the actual transactions (including cryptograhic hashes of any type of information) that took place at the time of the proof-of-work-confirmation, which elegantly prevents anyone from "rewriting history". As the network's participants continually race towards the next block the system prevents anyone from tampering with the record of the chain of events. This is a major argument for blockchain technology. It can be used to record voting, land titles, car registrations, ownership, stocks, bonds and board meeting consensus – and much more.
Running the bitconomy 24/7.
The Power Of 100 Billion Computers
As such, bitcoin (the currency) is inseparable from Bitcoin (the network). It creates its own intrinsic value independently thanks to its properties – not being pegged to the value of anything else in the "real world". Actually, Bitcoin has become a new way of measuring and proving that time has passed as the system is proving its immense capacity approximately every ten minutes.
There is no way for another network in this world to overpower the Bitcoin Network when calculating the SHA256^2 algorithm. It was long ago (August 2013) the network superseded the top 500 supercomputers in the world – combined. Today it expresses the equivalent processing power of more than 100 billion home computers – ever increasing its total hashrate.
Concepts such as merged mining, pegging-to-BTC, timestamping services, payment channels and sidechains are just a few of the current developments promising an exciting future for the Blockchain of Bitcoin.
A Global Online Currency For The 21st Century
The Internet has disrupted most businesses, practices and concepts in "the real world" – from shopping to music to travel to healthcare. Now it is time for finance and money to be disrupted by the Internet, thanks to Bitcoin – the new money protocol. Thier's Law famously states "Good Money Drives Out Bad" or; "In the absence of effective legal tender laws, Gresham's Law works in reverse. [WIKI LINK]".
Bitcoin is arguably the most practical type of money ever invented.
For example; bitcoins are highly suitable for:
• Online transactions
• Face-to-face mobile transactions
• Machine-to-machine transactions
• International remittances
• Secure savings
However, Bitcoin is much more than just "money". Bitcoin's network and technology (the "Blockchain") enables:
• Start-up innovation (an address is all you need, bank account optional)
• Autonomous Trading Entities / Decentralized Apps / Corporations (DAC:s)
• Proof-of-existence services (timestamping)
• Multi-signatory contracts, wills, insurance agreements
• Borderless value transfers
• Transparent governance
Decentralization means profit is made at the edges rather than at the center. In Bitcoin's case it means anyone can connect and start profiting from the system. That's why the number of transactions in the Bitcoin network is rising steadily.
Bitcoin is very resilient. So simple in its design that a bitcoin can exist in many variants; online or on your phone, backed-up on a usb stick or written on a piece of paper. You can even "store" bitcoins in your brain using a passphrase only you know. You can generate receiving addresses from that phrase, and generate the key to control your brain-stored bitcoins – with that same phrase.
Bitcoin is actually built on ingeniously simple mathematics.
Mathematics can't be "hacked". It just is. Just like Bitcoin.
The ground-breaking 20nm Neptune chip from KnC, released in June 2014.
Contrariwise and counter-intuitive
It takes time to "get" Bitcoin. Understanding the power of something truly decentralized is counter-intuitive. Humans tend to want control. Bitcoin turns things on it's head. Our vision is based on a deep understanding on why Bitcoin is powerful. Bitcoin offers: Decentralized Permissionless Timestamping.
That may not sound like much – but not only does it enable a new world currency, it enables a new sort of decentralized data structures to flourish, truly disrupting any and all industries relying on multi-stakeholder databases. This may be achieved by using add-ons to the Bitcoin network, such as sidechains or colored coins of different kinds - or altcoins working in harmony (being quickly and fluidly interchangable) with bitcoins. If Bitcoin provides the value-transferring mechanism in the cryptocurrency landscape there should also be room for forks (copies of Bitcoin) to provide other mechanisms that can benefit from using a blockchain.
You can't copy Bitcoin
A misconception regarding copies of Bitcoin ("altcoins") comes from the idea of using an ASIC-resistant algorithm, to compete with Bitcoin. "ASIC-resistant" is a contradiction in terms. It is always possible to remove inefficiencies in hardware computing any algorithm/s. If any coin would become valuable ASICs would quickly be developed and deployed.
Bitcoin's real value lies not in its properties compared to its copies, but in the fact that those properties now exist at all (!) – i.e. that this particular invention now exists, as compared to before it existed.
Contrary to popular belief there is no real point in trying to copy Bitcoin, as it's already here. Two of the main features are its permissionlessness and the fact that it acts like a unified global accounting system. That's not something that can be successfully "copied" as few would switch from the already very powerful and secure system that is Bitcoin today to a new and naturally weak copy.
It'll be weak compared to Bitcoin as nobody could amass the hashing power, match the head-start in development and financing or compete with the network effects Bitcoin has already displayed. Bitcoin is the future of cryptocurrencies. Other blockchains will have to interact with Bitcoin's blockchain to gain confidence – further strengthening the new gold standard - i.e. Bitcoin, the future world reserve currency.
The Vision Of Satoshi
There is a another widespread misunderstanding that cryptocurrencies run on idealism. The Bitcoin network is actually designed to rely on raw processing power for security. Stable industrial-scale miners, like KnC, play an important role in upholding the security of the Bitcoin network.
Satoshi Nakamoto, the inventor of Bitcoin, wrote forum posts and emails on the subject early on in Bitcoin's development. For instance this quote below, taken from Satoshi's early correspondence:
"At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware." - Satoshi Nakamoto (2008).
This, the foresighted "Vision Of Satoshi" rhymes very well with our core business; we design processors tailor-made for Bitcoin's algorithm (SHA256^2) and help validate and confirm worldwide bitcoin transactions in our Clear Sky processing facilities. We're one of the largest independent Bitcoin transaction processing houses in the world – securing the Blockchain of Bitcoin 24/7 – enabling new powerful blockchain-based applications in the process.
Satoshi's Vision ≈ KnC's Mission
All of these things come together to inspire us at KnC to pursue the "Vision of Satoshi"; to be those specialists that Satoshi spoke about and to do what he envisioned: power the Bitcoin network. So, we've embarked on a mission to provide efficient, secure and green blockchain processing power to the world. Our goal is to capture and maintain a healthy fraction of the global hashrate, helping to realize a vision of a future with specialized hardware, steadily and reliably securing the network.
But, it's not necessary to understand the tech or the incentives powering the Bitcoin network to use it. Just download an app (a Bitcoin wallet) and you can start to sell things or services in return for bitcoins. Today.
No permission required.
Check out a selection of Bitcoin wallets here: https://bitcoin.org/en/choose-your-wallet
Best, The KnC Team, by way of Nanok Bie, August 17, 2015, Stockholm.