Disclaimer: This is an analogy rather than an in-depth criticism. The point of this article is to explain Bitcoin mining through an approachable analogy.
Before I begin, it should be noted that you’ll need at least a basic understanding of what an idle game is so allow me to shamelessly shill and point you to my article on idle games here.
Bitcoin Billionaire: An idle game based off of Bitcoin
I recently took a dive into what idle games are and how their economics and incentives work to entice players to keep playing. I did this based off of EtherGoo, the first blockchain idle game. From this, I had a thought that I couldn’t shake. Isn’t Bitcoin just an idle game? Not in the traditional sense of an incremental one (an ever inflating production scale) but a decremental one. To understand this analogy, I will discuss how elements of idle games mirror Bitcoin mining.
How Cookie Clicker Works
To earn cookies, simply run the cookie clicker website and if you’re as lazy as I am, run an auto clicking script (here’s my favorite for mac) and sit back while the sweet cookie wealth rolls in. As your cookie wealth amasses, you’ll want to up your production so let’s go ahead and buy some units. From a cursor, to grandmas, to farms, we now have higher and higher production capabilities and our cookie wealth just keeps growing.
How Bitcoin Mining Works (Simplified Beyond Belief)
To earn Bitcoin, simply run a program such as BFGMiner and sit back while the sweet Bitcoin wealth rolls in (Disclaimer: it won’t unless you’ve got one hell of a setup, but for the sake of this analogy I’m going to ignore that). As your Bitcoin wealth amasses, you’ll want to up your production so let’s go ahead and buy some units. Your mining will have started with your CPU (the processor within your computer) but you’ll want to upgrade to a GPU (the graphics processor within your computer). Eventually, you’ll upgrade to an ASIC, which is a circuit built for a specific use instead of a general one like a CPU. Now all you need to do it up your production and watch your wealth grow (again, it probably won’t).
Where the Two Diverge
Of course, an idle game and bitcoin mining isn’t a perfect parallel but it does shed some light on what exactly is being done. Both are based off of arbitrary tasks which can be optimized through increasing production. Cookie clicker and other idle games are gated by clicking because you need some measure to prevent infinite production. Bitcoin is gated by arbitrarily difficult mathematic problems that processing power is used to solve. The divergence happens in three key areas.
- First, in cookie clicker you’re not competing against other clickers to gain that elusive cookie whereas in Bitcoin mining, you’re competing against other miners to solve algorithms first.
- Second, cookie clicker is an incremental game where you earn more and more till infinity. With Bitcoin, you earn less and less as the difficult to solve arbitrary problems get tougher and tougher.
- Third, Bitcoin mining serves to confirm transactions on the network, adding a vital functionality wherein the system would not function without the work of miners. Cookie clicker has no such functionality and if everyone in the world stops using cookie clicker, it would destroy the system running the game.
But really the main difference is that Bitcoin is built on blockchain which allows a ledger of all transactions so that we assign value to each Bitcoin. Cookies have no value assigned as their production is unlimited and not secured within a blockchain.
What This Tells Us
Bitcoin mining is of course more complex than what is laid out here but I think its important to create parallels to help demystify the space and broaden the understanding of how the system works. If you’d like a more in-depth look at Bitcoin mining, bitcoinmining.com was a source I used to help familiarize myself with the space. Additionally, this analogy is not unique to Bitcoin but can apply to crypto mining in general.
Hopefully this analogy can shed some light on what Bitcoin mining is by putting it in context of a game genre that many people have played. Hopefully someone will make a Cookie Coin and we’ll all be able to mine through clicking so we can add a little fun to the process. So the next time someone asks you how many Bitcoins you have, just answer “I’ve got billions of cookies, what about you?”.