Blockchain: Utopia or U-turn?
Bitcoin is the branded cryptocurrency that most users are familiar with, especially when they hear the term blockchain. This cryptocurrency operates as a decentralized, global peer-to-peer network, in which there is no issuing authority and no buyer. This implies that no body can control it, since the central authority is bypassed.
The coin is open, meaning it has wallet certification and transaction certification. But the best part is this: anyone can use Bitcoin via smartphone or computer.
Bitcoin was created by Satoshi Nakamoto in 2008 and is the first application of blockchain technology and the first cryptocurrency. It remains to this day the most widely used cryptocurrency. The global bitcoin supply is set at 21 million – this is the market value of all bitcoins.
Block
Blocks are synonymous with the digital pages of a ledger, also called a ledger. Immutable data related to the network is stored there. A block is a file on the block chain that contains and validates many pending transactions. About every 10 minutes, on average, a new block containing transactions is appended to the block chain through mining.
Blockchain
It is a distributed ledger, which records all transactions and smart contracts for a cryptocurrency or platform. The blockchain is replicated across many thousands of nodes worldwide. The blockchain is a public record of Bitcoin transactions in chronological order. The block chain is shared among all Bitcoin users. It is used to verify the permanence of Bitcoin transactions and to prevent double spending.
BlockHeight
The block height is the sum of the individual blocks in each chain. The first block has zero height and is also known as the first transaction (genesis block).
Charlie Lee
Charlie Lee is the creator of Litecoin and, before that, the lead engineer at Coinbase. Although he is the pioneer of Litecoin, Lee has devoted himself to numerous projects exclusively related to Bitcoin. Before his forays into the cryptocurrency world, Lee worked as a computer engineer at several companies, including Google and Guidewire Software.
Cypherpunk
The term “Cypherpunk” describes any activist who advocates the widespread use of strong encryption and security-enhancing (data) technology as a means of achieving social and political change. These informal groups of activists, who initially communicated through self-created e-mail lists, aim to protect privacy and security through the active use of cryptography. Cypherpunks have been organized into an active movement since the late 80s.
Cryptocurrencies
Cryptocurrency is a decentralized digital currency, which can be used for goods, services and transfers of investment goods. The first cryptocurrency was Bitcoin. It was first released on the market in January 2009.
Cryptocurrency Exchange
Cryptocurrency exchanges are websites or services that allow the exchange of digital crypto-goods for cryptocurrencies and vice versa, or the exchange of fiat money (eg United States dollars) for crypto-investment goods). Two of the most typical examples of such exchanges are Coinbase and Binance.
Cryptocurrency Wallets
Cryptocurrency wallet is a way of storing private and public keys for investment goods. Every wallet is a safe where one can resort to locate keys. A Bitcoin wallet is generally the equivalent of a physical wallet on the Bitcoin network.
In fact, the wallet contains your own private key(s) which allow you to spend the bitcoins allocated to that block chain. Each Bitcoin wallet can show you the total balance of all the bitcoins it controls and let you pay a specific amount to a specific person, just like a real wallet. This is different from credit cards where you are charged by the merchant.
David Lee Chaum
David Lee Chom is an American computer scientist and cryptographer. He became famous for the development of ecash, an electronic “cash” application, which aims to preserve the anonymity of the user. He has also invented several cryptographic protocols and founded DigiCash, an electronic money company. His article “Untraceable Electronic Mail, Sender Addresses and Digital Pseudonyms” (1981), set the stage for research into anonymous communication.
Decentralization
Decentralization is a measure of how much power a primary beneficiary has. One can argue that blockchains are definitely much more decentralized than other methods of data distribution, as (at least on public chains) there is no gatekeeper to control who can participate: anyone with the computing power can become part of the blockchain.
Digital Signature
A digital (cryptographic) signature is a digital code created by decrypting a public key that is in turn linked to an electronically shared document, which verifies the content of the document and the identity of the sender. A cryptographic signature is a mathematical mechanism that allows one to prove ownership.
In the case of Bitcoin, a Bitcoin wallet and its own private key(s) are linked by some mathematical magic. When your Bitcoin software signs a transaction with the appropriate private key, the entire network can see that the signature matches the bitcoins being spent. However, there is no way, the world breaks, for someone to guess your private key to steal your hard-earned bitcoins.
Distributed ledger
This is a match that is often made in blockchains. Instead of a central ledger, blockchain promises the distribution of balances through a network of servers.
Escrow
A cash guarantee is a financial agreement, according to which a third party saves and arranges the payment of funds required by the two parties involved in a particular transaction. It helps make transactions more secure by keeping the payment in a secure escrow account, which is only released when all terms of the agreement have been met, under the supervision of the escrow company.
Ethereum
Ethereum is a decentralized platform for applications running “smart contracts”, which is based on blockchain technology and aims to solve problems related to censorship, fraud and third-party interference.
Fiat (Fictitious Money)
Fictitious money is the means of payment associated with the national currency, such as the US dollar, the British pound or the euro. It is considered legal tender by a government, but its value is not backed by natural resources, such as gold.
Fork
A fork is an operating system operation that creates an alternative version of the blockchain, allowing two chains to run in parallel in different areas of the network.
Genesis Block is the first array/block of a blockchain.
Hodl
Hodl is a cryptocurrency meme for saving, not selling investment goods. The meme was created in December 2013 when a user who had downloaded some mugs typed something wrong on a popular Bitcoin forum. You can find the original thread on bitcointalk.org.
ICO (Initial Coin Offering)
As cryptocurrencies become more and more popular, so does the number of first coins. Each of them promises to fix, highlight or improve a certain aspect of the cryptocurrency landscape. These new coins are made available through ICOs. In other words, it is the crypto-variant of an IPO exchange.
James Dalton Bell
James Dalton Bell is an American crypto-anarchist who conceived the idea of online paid assassinations, which he calls “murder politics.” In April 1995, Bell authored the first chapter of a ten-part essay titled “The Politics of Assassination,” in which he describes at length a market for murder, in which anonymous donors can secretly order the assassination of members of the government or other trespassers the rights of citizens. In 2001, Wired magazine called Bell “one of the Internet’s most famous essayists” and “the world’s most notorious crypto-convict.”
Mining
Due to the encrypted nature of cryptocurrencies, verifying transactions requires a huge amount of computing power and specialized hardware. In exchange for computing power, people who solve (and thus approve) a transaction) are paid in cryptocurrency. This process is called mining.
Mining is the process that creates computer hardware to do mathematical calculations for the Bitcoin network to confirm transactions and increase security. As a fee for their services, miners can collect fees transactions for the transactions they confirm, along with newly generated bitcoins.
Mining is a specialized and competitive market where fees are divided according to how much calculation is done. Not all users do Bitcoin mining and it is not an easy way to make money. Instead they prefer cloud minting. See more on kryptohodlers YouTube channel.