Blockchain and Cryptocurrency
Mini-series detailing the space, people, products and resources to learn more
Here we’ll tackle the important topics to get you started on blockchain technology and cryptocurrencies. The posts should give you a beginner level understanding of the cryptocurrency space with the resources to learn more.
- 1: What is Blockchain?
- 2: What are cryptocurrencies? What is Bitcoin?
- 3: What are altcoins? (Part 1)
- 4: What are altcoins? (Part 2)
- 5: Who are the big movers and shakers in the cryptocurrency space?
- 6: What tools are individuals and institutions using the get more involved or invest?
- 7: What is legal and/or illegal within blockchain and cryptocurrencies? What are the taxes and regulations
- 8: What is missing in the space? How can we bridge the centralized and decentralized worlds?
In 1982, David Chaum published a paper titled, “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups.” He hypothesized that organizations who don’t “trust” one another can leverage cryptographic techniques to maintain a computer system that all can trust. The system would leverage a “vault” in which all parties need only trust their part in the process to trust the entire vault. By creating a network of vaults, the entire system would be “decentralized” across mutually suspicious groups.
Then in 1991, Stuart Haber and W Scott Stornetta published a paper detailing how the ability to certify when texts, audios, pictures, and video documents are modified would be crucial in the digital world. They proposed:
Computationally practical procedures for digital time-stamping of such documents so that it is infeasible for a user either to back-date or to forward-date his document, even with the collusion of a time-stamping service. Our procedures maintain complete privacy of the documents themselves, and require no record-keeping by the time-stamping service.
So what does this all mean? At the heart of it, they’re suggesting to record a time signature on documents when they are modified. This is the heart of many blockchain uses today — proving that a digital work existed or was modified at a certain time. They also included details on how to leverage other parties in confirming and verifying the time-stamping request.
For more information on Haber, Stornetta and the history of blockchain pre-cryptocurrency:
Blockchain Before Bitcoin: A History | Block Telegraph
The birth of blockchain is generally considered to be the release of Satoshi Nakamoto's Bitcoin paper in 2008 and the…
Blockchain is a distributed, decentralized, public ledger that consists of blocks used to record transactions across many computers.
A distributed ledger is a way to replicate, share and synchronize digital data across multiple entities. Recalling Chaum, Haber and Stornetta, we can see how they’ve left their imprints on this distributed ledger technology; all three advocating for a network of parties to verify digital information in a public record.
Going further, blockchain is a ‘chain’ of ‘blocks’ where each ‘block’ holds information about a digital asset’s recent transactions.
We’ve already tackled a couple of important values of blockchain through Chaum, Haber and Stornetta — Blockchain is transparent, decentralized, and immutable. Let’s break these down individually:
Transparency: All transactions are publicly recorded by different parties and entities. All parties and entities can see these records on the ledger.
Decentralization: All transactions are confirmed and verified by different parties and entities (peer-to-peer). No single source can control the ecosystem. There is no central authority, but rather uses a consensus mechanisms by the network.
Immutability: All transactions are permanent and irreversible. By leveraging cryptography, each new ‘block’ of information includes the details from the previous ‘block,’ making the chain immutable.
For more on the technology behind blockchain (and cryptocurrencies):
What is the Blockchain? Explaining the Tech Behind Cryptocurrencies (Published 2018)
A blockchain is a relatively new kind of database that has become the trendy solution for storing digital information…
With transparency, decentralization and immutability, there are many different industries that can leverage the technology. We’ll dive deeper into the blockchain applications in part 5 when we discuss crypto-asset applications.
Until then, feel free to read about some blockchain use cases here, and what makes blockchain so special:
What Makes the Blockchain Special
Blockchain technology could become the new standard for storing and exchanging data in the online and real world…
Bitcoin is the first implementation of the Blockchain idea. We will learn about that in the next part of the mini-series.
Feel free to comment with more resources to help out our beginners.