2018/09/22: Satoshi built off the work of previous cryptographic researchers, including Wei Dai’s B-money, and Adam Back’s Hashcash. B-money and Hashcash were the first proof of work protocols in the world.
The bitcoin whitepaper outlines the proof of work system, discussing how one CPU would equal one vote. As long as the majority of CPUs were acting in the best interest of the network, then the network would stay secure. Those CPUs would be motivated to act in the best interests of the network because they receive a reward for doing so and because it costs money to provide proofs of work to the network. This basic, economic system of costs and rewards is what secures bitcoin.
Here’s how Satoshi explains it:
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”
The network is also secured by a chain of linked signatures. Each block in the bitcoin blockchain contains a secure reference to the block before it and the block after it – a signature. In order to alter the bitcoin blockchain, a malicious actor would need an enormous amount of computing power to change all the blocks in the chain
Today, Bitcoin trades at around $6,500, and Ether at $204. Their combined market caps have shed about $300 billion in value.
That’s basically five Bernie Madoffs worth of losses.
The situation has put crypto investors in quite the bind. As one indicative example, The Wall Street Journal profiled wunderkind crypto investor Olaf Carlson-Wee, who founded Polychain Capital. The fund, which has seen dizzying growth over the past few years turning a few thousand dollars into tens of millions in returns, has lost about 40 percent of its $800 million in capital through investment losses and investor withdrawals.
It’s clear the second blockchain bubble is now complete (the first was the run-up in Bitcoin prices in 2013).
Blockchain’s story so far is the freakish combination of two narratives.
One side, a technology extraordinarily nascent, with limited use cases and almost no ability to scale. The other, a groundbreaking new technology that should be invested in immediately for maximum returns.
The simple answer is that the first is right, and the second is just too early. Much more development is needed to get blockchain where it needs to be, and much more analysis is going to have to be done to figure out where the investment returns are going to be. Search and social ended up being the killer apps for the internet, but the winners in those categories hardly emerged instantly.
Ethereum is not aiming to change world finance, it is offering a platform for applications. Moreover, Ethereum as a project has much more in common with a company offering a product than Bitcoin, which operates as a group that is developing a protocol.
I think that the Bitcoin maximalism position is possible on that basis (one protocol will win) while still being able to look at smart contract platforms as companies.
I look at Ethereum as a company, and the world of companies is one that requires vigorous competition. Without that competition, a company becomes complacent and won’t innovate; why would they?
“Per the indictment, no diamonds or real estate, or any coins, tokens, or currency of any imaginable sort, ever existed -- despite promises made to investors to the contrary," Dearie said in his ruling. “Simply labeling an investment opportunity as a ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract -- a security -- into a currency.”
2018/06/05: the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important - e.g., if it became a “store of value” akin to gold - which suggests that there are intrinsic economic limits to how economically important it can become in the first place.
The anarchist virtual currency may be a hoax. It could also be the global economy's last safe haven
The power consumed by the internet giants' massive server farms and the mining of the cryptocurrency are growing into a giant environmental headache
2014/06/01: The vision of a free-floating digital cryptocurrency economy, divorced from the politics of colossal banks and aggressive governments, is under threat. Take, for example, the purists at Dark Wallet, accusing the Bitcoin Foundation of selling out to the regulators and the likes of the Winklevoss Twins.
Bitcoin sometimes appears akin to an illegal immigrant, trying to decide whether to seek out a rebellious existence in the black-market economy, or whether to don the slick clothes of the Silicon Valley establishment. The latter position – involving publicly accepting regulation and tax whilst privately lobbying against it – is obviously more acceptable and familiar to authorities.
The hype around blockchain is massive. To hear the blockchain hype train tell it, blockchain will now: What the heck is a blockchain, anyway? And can it really do all these things? Can blockchain
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It's easy to believe cryptocurrencies have no value. It's also becoming fashionable to believe they will disrupt everything. Neither extreme is true.
Boosters of blockchain technology compare its early days to the early days of the Internet. But whereas the Internet quickly gave rise to email, the World Wide Web, and millions of commercial ventures, blockchain's only application - cryptocurrencies such as Bitcoin - does not even fulfill its stated purpose.
2017-12-07: Concerns about the cryptocurrency's energy use are overblown.
L'autore di questo post è Carlo Piana, avvocato milanese, fondatore di Array; si occupa di diritto dell'Information Technology, in particolare di software libero e open source. L'autore ringr
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2017-11-20: Skedaddle is not going to eliminate Yelp or Facebook or tipping. It's not going to be "the first cryptocurrency for real world use." But at some level they're not wrong! One day 20 years from now we'll wake up and all of our interactions and performance will be tracked on the blockchain and will directly determine our income and socioeconomic status, and on the one hand we'll get pretty good customer service, but on the other hand we'll be terrified all the time. It is the logical endpoint of the "gig economy."