Hey fellow AZ Money comrades,
It's time to break down some crypto topics in a simple way and get into the nitty gritty of what is an AZ Money mining contract?
First let's start with cryptocurrency mining. Mining is the process by which new coins are created and transactions are added to the blockchain...the public ledger of all transactions. It also serves as a mechanism for securing and decentralizing the network.
Those who purchase an AZ Money mining contract receive a portion of hashpower, also known as computational power, that gets directed to the AZ Money mining process.
Hashpower refers to the amount of computational work and processing capacity that contributes to a blockchain network, particularly in the context of proof-of-work (PoW) cryptocurrencies like Bitcoin.
Hashpower is measured by the hashrate. An increase in hashrate means more computational power is being directed to secure and decentralize the blockchain. Hashes have various applications in computer science and cryptography, including data integrity, password storage, blockchain technology, digital signatures, cryptography and data structures.
Here is a cool link showing the growth of the Bitcoin hashpower going back to 2009: https://www.coinwarz.com/mining/bitcoin/hashrate-chart
A blockchain is like a digital ledger or record book that keeps track of transactions in a secure and unchangeable way over the course of time. It's a system of storing and transferring data that is distributed across a network of computers. Each block in the chain contains a record of transactions, a cryptographic hash of the previous block, and a timestamp. The blocks are linked together by the hashes, forming a chain that is resistant to tampering and fraud.
One way of thinking about this is by imagining a chain of blocks, with the genesis block being the first block in the chain, and where each block contains a list of transactions. See link for visualization - https://1drv.ms/i/s!AgvYsPI8j3fjgqog9WV ... A?e=e7lz3S
The Mining Process Step-by-step:
1. Transaction Validation: Before coins can be included in a new block, transactions must be verified by network participants called miners. These transactions are gathered into a pool known as the "mempool."
2. Proof-of-Work: AZ Money uses a consensus mechanism called Proof-of-Work (PoW) to decide which miner gets to add the next block to the blockchain. PoW involves solving a complex mathematical puzzle, known as the "hash puzzle," that requires computational power to solve. Other blockchains like Ethereum use a different consensus mechinism called Proof-of-Stake (PoS) which isn't relevant to our project.
3. Mining Nodes: Miners are specialized nodes on the AZ Money network equipped with high-performance computers called ASICs (Application-Specific Integrated Circuits). These miners compete to solve the PoW puzzle and are in constant competition with each other.
4. Hashing: Miners select a set of transactions from the mempool and package them into a block. To start mining, they create a header for the block, which includes a reference to the previous block's header, a timestamp, a nonce (a random number), and a list of transactions. They then calculate the hash of this block header using a cryptographic hash function (SHA-256) repeatedly.
5. Difficulty Target: The difficulty of the PoW puzzle approximately is adjusted every so often to maintain an average block time of about 2 minutes (10 minutes for Bitcoin). Miners must find a hash that is below a certain target value, which becomes more challenging as more miners join the network. This target is what makes the PoW puzzle difficult to solve.
6. Proof-of-Work Competition: Miners increment the nonce in their block header and rehash it repeatedly until they find a hash that meets the difficulty target. This process is highly iterative and requires a more computational power as the network grows. Miners are essentially guessing different nonce values until they find one that results in a valid hash.
7. Winning Miner: The first miner to find a valid hash (i.e., one that meets the difficulty target) broadcasts the solution to the network, along with the block of transactions they've assembled. Other nodes in the network quickly verify the solution.
8. Block Confirmation: Once the solution is verified, the winning miner's block is added to the blockchain as the latest block. This block contains the newly created AZ Coins (SAGZ) known as the "block reward" and transaction fees paid by users for including their transactions.
9. Reward and Transaction Fees: The miner who successfully mines a block is rewarded with newly created AZ Money coins and the sum of transaction fees from the included transactions. Currently the block reward for AZ Money is 15 coins per block which will drop down to 7.5 coins per block in the next halving cycle which is estimated to be next February.
10. Repeat Process: The mining process continues in a cycle, with miners competing to solve the next PoW puzzle, creating new blocks, and adding them to the blockchain. This will continue until the total supply of AZ Money coins hits its predetermined limit of 7.6 million coins.
Bitcoin and AZ Money protocol differences:
If you've had the chance to peruse the AZ Money and Microcurrencies whitepapers (attached for your reference), you'll understand that AZ Money is poised to become a microcurrency that will be tradable with Bitcoin in the near future.
At a protocol level, AZ Money employs a mining process akin to that of Bitcoin, but it operates as a "softfork" of the Bitcoin blockchain. This entails using the same mining process while introducing a few distinct variables. See here: viewtopic.php?t=45
Digital Commodities: Akin to Gold and Oil with Regulatory Recognition
In essence, a blockchain is a trustworthy and decentralized way to record and verify digital transactions, which can be used for various purposes beyond cryptocurrencies, such as supply chain tracking, voting systems, tokenization of real-world assets, and more, where transparency and security are paramount.
Miners play a crucial role in the security and decentralization of the network, as they ensure the integrity of transactions and maintain the blockchain.
Bitcoin is considered a commodity due to its striking resemblance to traditional commodities like gold or oil. Just like gold, Bitcoin is finite in supply, with a capped maximum of 21 million coins, making it a potential store of value much like the precious metal. Moreover, similar to oil, Bitcoin's value is determined by market forces of supply and demand. It is this intrinsic scarcity and market-driven value that positions Bitcoin as a commodity.
The classification of Bitcoin as a commodity has received official recognition from both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in the United States. The CFTC has categorized Bitcoin as a commodity since 2015, asserting its regulatory authority over Bitcoin futures and derivatives markets. Additionally, the SEC has also acknowledged Bitcoin as a commodity, further solidifying its status within the financial landscape.
What sets Bitcoin apart from traditional commodities, like gold or oil, is that it doesn't require any physical backing. Bitcoin's value is derived from its decentralized and trustless nature, where transactions are verified and recorded on a blockchain, making it a self-sustained financial system. In essence, Bitcoin is the commodity that serves as its own financial backbone, relying on its blockchain technology, scarcity, and the confidence of its user base to determine its value.
This innovative approach to a digital commodity highlights the changing landscape of financial assets in the 21st century, where the underlying value is based on technology and network effects rather than physical resources or government backing.
AZ Money can be likened to the modern-day silver, while Bitcoin represents the contemporary equivalent of gold in the world of cryptocurrencies. Just as silver complements gold in traditional precious metal markets, AZ Money serves as a versatile counterpart to Bitcoin in the digital financial landscape.
Like silver, AZ Money is often viewed as a more affordable and accessible option for investors. It offers a practical alternative for those who may find Bitcoin's price point intimidating. This accessibility makes AZ Money an attractive choice for individuals seeking exposure to the benefits of blockchain technology without the significant investment required for Bitcoin.
Bitcoin, on the other hand, mirrors gold due to its established status as a digital store of value. It is considered a reliable and enduring asset, often used as a digital equivalent of gold's role in preserving wealth and value over time. Bitcoin's limited supply and widespread recognition are akin to the qualities that have made gold a sought-after precious metal for centuries.
Just as silver and gold have distinct roles in traditional financial portfolios, AZ Money and Bitcoin offer diverse opportunities within the cryptocurrency space. While Bitcoin serves as a digital store of value and a secure asset for long-term investment, AZ Money provides a local entry point for those looking to engage with blockchain technology. These digital counterparts together contribute to the evolving landscape of digital finance, offering options that cater to a wide spectrum of investors and use cases.
AZ Money mining contracts:
Mining contracts offer an excellent means of obtaining AZ Money Coins (SAGZ) without the need to operate and oversee a Bitcoin mining machine.
Contracts start 10 GH/S where GH stans for gigahash and the S for seconds.
See link for hash power conversion rate: https://coinguides.org/hashpower-converter-calculator/
There are huge shifts in finance and banking that are taking place because of these blockchains. The fundamental premises of a robust, transparent, secure, sovereign and open ledger systems will change the way our world operates, similar to how the internet changed our society.
It’s early days and I believe there is something very special about local micro currencies like AZ Money that integrate with Bitcoin.
With AZ Money mining contracts, you harness formidable hashpower, ensuring not only the robustness of the network but also earning generous rewards in AZ Money Coins (SAGZ) – your key to a thriving future in the world of cryptocurrency. Join the community of forward thinkers and become a cornerstone of the AZ Money blockchain's success and unlock this extraordinary opportunity by purchasing an AZ Money mining contract.
If you want to be more involved and are interested mining AZ Money we would love to hear from you.
Reserve your mining contract today by replying to this email.
For those curious on the math behind how the mining contract payout work please visit: https://docs.google.com/document/d/1T9s ... nFgRM/edit
Regards,
Supertoshi
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