Some technologies continue to exist even if their creators set them aside in favor of something else. A stone wheel remains a stone wheel, regardless of whether you use it. A printing press in a museum still operates precisely as designed, even though it\u2019s been bucked in favor of digital printers. And combustion engines will still run on gasoline, even when the day comes that no one cares to use one anymore.<\/p>\n
But this kind of staying power is not the case with the technology that underpins cryptocurrency: blockchain. If people stop caring about a given cryptocurrency, the blockchain that runs it will eventually die out.<\/p>\n
How is this possible?<\/p>\n
First, let\u2019s review what a blockchain is and how it works. Despite its futuristic-sounding name, it\u2019s actually a simple thing: a digital ledger maintained by a special kind of computer. Traditionally, a ledger is a piece of paper on which changes of ownership are recorded by hand. An ancient ledger might read that I have one sheep and you have three sheep. If either of us buys or sells a sheep, the ledger is updated accordingly. It tracks our account balances, so to speak.<\/p>\n
As opposed to sheep, a blockchain records changes in ownership of its \u201cbase token.\u201d A blockchain\u2019s base token is also called its \u201ccryptocurrency.\u201d The Bitcoin network\u2019s base token is a bitcoin, the Ethereum network\u2019s base token is an Ether, and the Dash network\u2019s base token is a Dash.<\/p>\n
The people who run the specialized computers that execute account balance updates on the blockchain are called \u201cminers.\u201d If they own a competitive number of computers as compared to other miners in the network, they\u2019re likely to win the right of entering an update to the blockchain. Making this update results in the creation of new base tokens \u2014 and the miner gets to keep them as his \u201cpay.\u201d<\/p>\n
It\u2019s these people who will make or break the future of cryptocurrency technology.<\/p>\n
From the giant warehouses of mining computers in China to the little flash drive miner sticking out of your friend\u2019s laptop, all mining efforts are focused on one thing and one thing only: turning a profit. For this reason, miners program their machines to only contribute effort to the cryptocurrency they estimate will bring the most profit \u2014 the network with the least mining competition and the highest payout. This is where human emotion begins to play a part.<\/p>\n
Because none of us can predict the future, we\u2019re left to make decisions based on how we feel. For example, no American can know for certain that a dollar will be worth anything tomorrow, but we\u00a0feel\u00a0pretty confident that it will be, so we choose to work in exchange for dollars today. If every dollar-holder in the world decided to sell all their dollars for something else tomorrow, however, the infrastructure that runs the dollar \u2014 that is, the partnership between the Federal Reserve and U.S. Government \u2014 would die.<\/p>\n
So it is with a blockchain. Whereas all dollar-holders cast an implicit vote in favor of the humans running the U.S. Government and the Federal Reserve, the holders of any cryptocurrency similarly cast a \u201cyes\u201d vote to the humans who make up that network\u2019s infrastructure \u2013 its miners.<\/p>\n