Showing posts with label Crypto. Show all posts
Showing posts with label Crypto. Show all posts
The Use of Blockchain. Innovation in Finance and More
In this video I am explaining the importance, use and role of blockchain. Check it out and let me know your thoughts!
Ways of Making Great Returns With Crypto!
Want to know different ways of making money with cryptocurrencies? Check out my latest video
Which Coin Will Be The Most Valued? Where Does The Value Come From?
In this video, I am explaining value of cryptocurrencies. Also, I am sharing my faviorite long-term coin!
What is Bitcoin?
Bitcoin (BTC) is a cryptocurrency that appeared in circulation in 2009. It was created by Satoshi Nakamoto. Although, until today we do not know in 100% who this person is (or maybe it is a group of people).
Anyway, Bitcoin is a specific currency that anyone can "mine" on their own hardware (usually some Graphic Cards with huge computing power). Bitcoins are divided into smaller units called satoshi (one bitcoin is 100,000,000 satoshi).
Storing this cryptocurrency is quite simple, because this coins are simply stored on the owner's personal computer in a special wallet or they can be stored in special portfolios, created on external websites. If we want to perform transactions via bitcoin, we simply "transfer" them from our portfolio to the portfolio of the second participant.
Bitcoins have been gaining in value since their creation. And in fact, no one knows how much the true value of it is. However, it must be admitted that Bitcoin currency is becoming more and more popular. Also the use of it is being accepted by increasing number of companies and even countries as a means of payment.
Bitcoin's popularity is also related to another fact. It is not controlled by any bank or other type of financial institution, and its value is determined solely by the rules of demand and supply (although supply is limited here, as it will be possible to mint a maximum number of 21 million bitcoins).
Bitcoin is often said to be the currency of the underground world (mafia, gangs, etc.) because transactions can be carried out that are not controlled by any supervisory authorities. However, as data supports it, such transactions are just a margin, and the vast majority of transfers are "normal" payments, exchanges, etc.
What does the future of bitcoin look like?
Hard to say. Most people say that it has a bright future and that over time, it will replace the payment means we currently know. However, some specialists say that the currency will be devalued after a while, and those who have it will lose only the funds they have allocated for its purchase. The truth is surely somewhere in the middle and time will tell who side was more right
What do you think about Bitcoin? Let me know in the comments below!
What is Ethereum?
Ethereum (ETH) is a cryptocurrency that was created in 2013 by Vitalik Buterin. In 2013, Vitalik came up with idea of creating this currency after reading a study about Bitcoin. Often, it is said today that ethereum is bitcoin 2.0. Although at first glance, both cryptocurrencies operate on similar principles, they actually differ in a significant way.
In the case of Ethereum, we are dealing with a protocol that is based on a decentralized Blockchain, on which run applications (anyone can develop an application that runs on Ethereum). This platform has programmed functions called smart contracts, it cannot be broken and it protected from fraud.
This is the main reason why it was very enthusiastically received by the market. This project received 19 million dollars for its development!!!
The value of Ethereum is systematically growing, which results of many factors. First of all, the acceptance and availability of this cryptocurrency is growing. In addition, this project is constantly improved, which allows for even better use of this currency and its smart contracts.
Read whitepaper
What are Smart contracts?
What are Smart Contracts?
Ethereum Technology
The year 2015 was very important for blockchain and cryptocurrency technologies. It was at that time that Ethereum appeared on the market. Unlike Bitcoin, Ethereum's main task was to create a fully decentralized application platform for users.In addition to modern technology and innovations that came with this new open-source platform, smart contract is "probably" the most important business solution of the future.
So, what is a Smart Contract?
As I have already mentioned, Ethereum's main goal is to provide users with a decentralized application platform. Where any developer can create his/her own decentralized app with smart contract.To understand how this system works, we must first understand the concept of smart contract. The idea of this solution appeared in 1996 - more than 20 years ago, but only now we have the technical possibilities to apply it through Ethereum.
Smart contracts are used to enforce individual lines of code. In other words, if there is an event A, the reaction will be B. The key point here is that blockchain, or individual nodes on the blockchain would verify if that event A happened to process reaction B. This would get rid off intermediaries and reduce costs.
It is a very simple process that happens simultaneously in thousands of blockchains. Also due to the existing technology, smart contracts provide extremely powerful computing power and new possibilities for everyone.
The main idea of smart contracts is to use blockchain technology not only to enforce a certain type of action, but also to automatically verify and facilitate it. These actions must be carried out automatically. When this condition is met, the system proceeds to the automated execution of transactions.
This system is useful in many fields, not only for banks. Blockchain's ecosystem has an advantage over classic transaction, contract and agreement process. Blockchain doesn't need a third party to verify transactions or contracts. This is one of the main reasons why Ethereum is successful and is becoming more and more popular.
How to use Smart Contracts?
Now that you know what smart contracts are, I would like to point out some areas in which this technology can be practically used. Please note that not all of these solutions can be effectively introduced into the markets.Let's think of automated payments or money transfer. "if the event A happen X amount of money has to be transferred to party B"
This technology would automate M2M (machine to machine) payments when it comes to Internet of Things. Where you drive your Tesla through the highway and the toll fee can be collected and verified automatically without you stopping.
Smart contracts will also allow us to replace traditional contracts.... think of rental agreements, labor agreements, etc.Thanks to smart agreements, we could automate the entire process related to traditional contracts.
Think of Sport Betting. All games and bets are in most cases conditional. If one team wins, you must pay X money to the user. Smart agreements will allow you to automate this process (no middle man to verify) and reduce the costs of bookmaking services, and increase their safety.
Considering everything I just wrote, it's easy to say that this unique technology will be quickly adapted by the market. The question is not whether this will happen, but when it will happen. Therefore, everyone should have fundamental knowledge about them and use their abilities!
What is Monero?
Monero (XMR) is a cryptocurrency that appeared for the first time on April 18, 2014. It is not known exactly who created it. Anyway, its creator probably withdrew from this project and now other people are working on it.
At the beginning, the cryptocurrency was called Bitmonero (in Esperanto it means exactly Bitcoin). At the beginning from the technical side the whole project did not function properly, but now everything looks much better. Recent upgrade improved processing and now transaction can be recorded on the ledger within one minute!
For the creators of Monero, anonymity is extremely important. Therefore, transaction addresses are hidden which makes it impossible to find their senders and recipients. What's more, Monero offers a system of confidential transactions, which allows you to hide the amount that is included in the transfer.
Interestingly, the developers of Monero did not specify what the maximum supply of this cryptocurrency should be. At present, almost 15 million coins have been extracted. When it reaches 18 132 000 coins, their production is to be reduced. It will be about 0.6 XMR every minute per block.
The Monero project has a good chance of success, because cryptocurrencies are still gaining popularity and due to anonymity. Monero is increasingly bought by investors, thanks to which its value is systematically growing.
Read the whitpaper
What is Dash?
DASH or, as some may refer, Digital Cash (DASH) is a cryptocurrency created by Evan Duffield. The first time it appeared on January 18, 2014. At the beginning Dash was known as Xcoin, later as Darkcoin, and from March 25, 2015 is known as Dashcoin.
It is a decentralized coin and nobody has top-down control over it. At the very beginning, only the creator of the project worked on it. Later, gradually more people joined him. Today, Dash team is a large group of people who are systematically working to improve this project.
The maximum number of coins to be "minted" is 18 million. So far, over 7 million coins have been circulated in circulation. Every year, emissions are reduced by 7.1%. Dash production is to end around 2150. 45% of the prize for "mining" a coin goes to masternodes, 45% for people who are mining them, and 10% is spent on coin development.
Dash is often treated by investors as an excellent alternative to Bitcoin. Its value is systematically growing
Check out whitepaper
What is Litecoin?
The creator of Litecoin determined that its maximum supply will be 84 million units. At present, over 50 million of this cryptocurrency has been "mined". Each Litecoin is divided into 100,000,000 smaller units.
How is this currency different from its original or Bitcoin? First of all, Litecoin processes the block every 2.5 minutes, records transaction on ledger. Bitcoin does it every 10 minutes. According to the creators of this currency, it allows for faster confirmation of transactions.
Another difference is the cryptocurrency supply. As we have already said, 84 million "coins" of this currency are to be created, and in the case of Bitcoin, there will be only 21 million of them.
Of course, there are also a lot of "technical" differences that affect the production of this currency, or the way in which the transaction code is saved (litecoin is using SegWit). In this case Litecoin is much lighter and its wallet does not require a lot of storage as opposed to Bitcoin.
Does Litecoin have a chance to beat its popularity with Bitecoin? It's hard to say, but many people say that there is a chance. .
Blockchain Security
Blockchain Technology and Security
Undoubtedly Bitcoin’s Blockchain has some strong advantages. One of them is anonymous transactions. Bitcoin holder does not need to provide personal information. Users are using a cryptographic hash function (which the blog explains later) to represents their pseudonymous identity on the network. Bitcoin payments are fast, and almost no-cost transfers to anywhere in the world, for which different transaction parties only need to access the Internet. The system has double-spending protection meaning that one cannot send the same coin to several people at once. This attribution is done through proof of work protocol.
The Bitcoin system is very user friendly where convenience and ease of use of Bitcoins is a fundamental aspect of this currency. The other main advantage of Bitcoin is that transactions are made without intermediaries, as opposed to any other payment system where all the reactions must go through the clearing house as banks or central banks. This independence from governments and financial institutions makes it very attractive to the users that would like to maintain its privacy as well as it makes it very popular on the black markets. As previously discussed the limited and strictly planned supply of this currency reduces risks of inflation. Safety and security are probably one of the key advantages in use as long as one follow the basic safety rules in the network. Bitcoin has some great advantages in its security procedures which are accomplished through implying a blockchain systems to store the information.
The essence of the blockchain is to maintain a common and collective accounting book of transactions, in digital form, distributed throughout the network in the same copies. This technology is based on peer-to-peer networks without central computers, systems that manage and verify transactions. Each computer on the network can participate in the transmission and authentication of the transaction. In the case of the blockchain, these will be blocks within the transaction book. The book is open to everyone but fully protected from unauthorized access by complex cryptographic tools. The user has only insight into his transactions. Because of this transaction, the transactions are public, but only accessible under the user's access rights and their entire history, from the very beginning of the blockchain to this day, can be reviewed and verified. 
The chain of blocks as a transactional accounting book with current technology and computing power cannot be counterfeited. It is estimated that to break the blockchain network requires computing power equal to half the internet. Nevertheless, the introduction of quantum computers will require the implementation of new cryptographic security. The blockchain transactions recorded in the blockchain are irreversible. Attempting to change one block entails a change in the entire blockchain following it. If someone tries to cheat, change, or enter an unauthorized transaction, the blockchain nodes in the verification and reconciliation process will discover that one of the copies of the book is a non-compliant transaction on the network and refuses to include it in the chain of blocks. Data, transactions and their order are resistant to counterfeiting and manipulation of any kind. The same blockchain philosophy, advanced mathematical methods, and cryptographic security allow us to trust the data contained in the accounting books of the transaction. Next section will describe key protocols or producers involved in the creation of a blockchain.
Blockchain ecosystem and security
The blockchain ecosystem and all the different protocols involved in creating/verifying transaction are making Bitcoin very secure, resistant to fraud or double spending. Cryptographic hash function is used to digest a message of transaction that is coming from party A to party B. Bitcoin is using the SHA256 standard to accomplish such a digest. SHA 256 converts any message (doesn't matter what length) to 256-bit length numerical representation of that message. If the message is changed then the SHA256 function will change too. This process is irreversible, which mean that we cannot translate hash function back to the original message.
The Digital Signatures are used to sing this transaction message by the sender. Each of the Bitcoin users has two different sign keys. One is private and one is public to verify if party a sign the document. Both of those keys are mathematically connected. If the party A signed one document is will result in digital signature which is just like SHA 256 just set of alphanumeric figures that are connected to the public key. Each signed message will result in the different set of numbers which makes it very secure (more than the manual signature that is always the same).
When the transaction message is created it is sent out to everyone on the system to verify it. Other parties have public verification key of party A to do it. Now people with huge computers with enormous computing power can begin “mining” and competing for the reward associated with “mining”. Previously mentioned “mining” is a reward based system, where different nodes compete to be the first one to create and add a new block to a chain of a block. The first person to do it will receive a reward of 12.5 Bitcoins as of this year. This reward will get smaller over a time and there is a system that determines it. Sometime in the 22nd century, there will be no more rewards available because the system will reach the limit of 21 million Bitcoins issued.
Those “miners” collect different transaction and put them into the ledger structure (like in the accounting system) to create a list/ block of those transactions. All transactions are connected to each other through hash functions.
Once the block is ready to be connected to the chain. Mainers include the hashtag (generated through Proof of work protocol) of the previous block to the new block. After that competition starts. Computers are trying to generate the hash that correspondents to challenges issued by the system, which is asking them to create a hash with many 0 in front of the hash function. As one knows, one message will result in only one particular hash function; therefore, miners have to include a nonce which is an arbitrary set of text to the block that will help computers meet the challenge. Computers accomplished that by guessing random values, just like in brute force attack that is used in cracking the password. The first computer to do it will be accepted through the others and add to the system.
Now, if anyone would like to change a block or create a different transaction then he or she would have to have a computer with the greatest power on the system to create the new chain of blocks that is longer than existing one, so the system can accept it; because only the longest chain is accepted. This computer must have a better guessing power than all the other computers together, due to proof-of-work protocol. And it would have to generate longest chain of block in just 10 min. It seems impossible as of now. And it might be impractical. If some have the best computer out there one could be just “mining” and getting the rewards.
I know that it all seems very complex. If you would like to understand it better, please watch these videos made by Khan Academy, that explain everything carefully.
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