CryptoURANUS Economics: 08/03/18


Friday, August 3, 2018

Blockchain: Defined in CryptoCurrency


Blockchain can take many forms, but at its core it is a distributed database, shared across millions of users, in-line with the workings of peer-to-peer networks. Similarly to cloud services such as Google Documents, it is “out there”, but instead of being stored on some central servers, the whole network serves as a server. Everyone on the network can view the data stored on the blockchain and add their own. The blockchain network is designed to continuously synchronize the data, making sure that every user has access to the same information. Once data are added they cannot be retroactively manipulated.

Blockchain is defined as computer technology, used to prove that a group of people came to an agreement about something. Blockchain recordings are permanent and very secure, preventing manipulation. The first example of blockchain technology are the recordings of bitcoin transactions.

Why is it called blockchain?

The ledger, or database, consists of blocks of data. The blocks are being added to the blockchain at regular intervals after being verified by users using cryptographic calculations. These blocks are timestamped and chained one after another, creating a never-ending chain of blocks - the blockchain.

Why is blockchain revolutionary?
There are five main features that make blockchain the next big thing in tech, and why it will be used in a growing number of applications.

Safety and Security
The information on the blockchain is stored everywhere across the whole network and does not have a single point of entry. There’s no central server that can be hacked or destroyed.

Stability and Robustness
The blockchain network can consist of millions of computers, the so-called nodes, and so there’s never any server downtime. The data is available 24/7, all the time, which makes it ideal for financial markets, where a minute of downtime can cause losses of up to hundreds of thousands.

Decentralized and Transparent
Blockchain cannot be controlled by any single entity. There is no central authority that can change the rules of the blockchain. How the blockchain behaves is a public knowledge and any changes need to be accepted by the majority of the blockchain users.

The validity of the blockchain is verified at regular intervals, so it lives in a state of constant consensus. Once added to the blockchain, a block cannot be retroactively modified without having to alter all subsequent blocks. So altering any unit of information (a block) would require having a 51% network power. While it is possible in theory, it is unlikely to happen in reality. Furthermore, such attack would be immediately recognized by the rest of the network and corrective steps could be employed.

Who created blockchain?
Blockchain relies heavily on cryptography. The theoretical groundwork for its existence was laid in 1991 by Bayer, Haber and Stornetta. Then, in 2009 Satoshi Nakamoto used the theory and turned it into reality with Bitcoin, the first decentralized digital currency. Early-adopted by thousands of internet and technology devotees, the Bitcoin blockchain soon got enough users to provide the necessary security and robustness, and so eight years later the value of a non-existent virtual coin could reach a value of 7160 USD in November 2017.
What are the possible uses of blockchain?

Blockchain can be publicly accessible or closed. Public blockchains are ideal candidates for digital voting and copyright protection, land registry and others. Any database from unalterable birth citizenship certificates and digital identity storage could be ported to blockchain. Using blockchain for money transactions alone, the original use of blockchain, could save investments banks up to $12 billion a year.

But blockchain use doesn’t stop with databases. Further and wider use of the blockchain technology is expected. Cryptocurrencies younger than Bitcoin, such as Ethereum, have started using the blockchain to automatically execute smart contracts, pay for invoices, etc. The advanced use of the blockchain technology is sometimes called Blockchain 2.0 and it can involve distributed file storage, prediction markets, truly connected Internet-of-Things, decentralized businesses and e-government, and further improvements to sharing economies and services such as Uber or Airbnb.
Blockchain future

Intel, Microsoft, JP Morgan and others, all these companies are investing heavily in the technology. Bank of England considers blockchain genius. There is no doubt that blockchain will reshape the way the world of finances, the internet and information technology work today. First movers are already researching and developing their applications of the technology and digital currencies that utilize the blockchain in new ways such as Ethereum or IOTA are on the rise and publicly available for use.

Blockchain About History and Use:
Blockchain relies heavily on cryptography and the theoretical groundwork for its existence was laid in 1991 by Bayer, Haber and Stornetta, before Satoshi turned it into reality in 2009.

Blockchain consists of timestamped blocks that include the transaction data and a hash (encrypted) pointer that links them to the previous block.

Once added to the blockchain, a block cannot be retroactively modified without having to alter all subsequent blocks - which would require to beat the majority of the Bitcoin’s peer-to-peer network power, which already in 2013 had a combined might of 500 supercomputers.

Besides its use in Bitcoin and other cryptocurrencies, the blockchain is a revolutionary piece of technology that could be used to record any important events, data, documents or transactions.

Major banks and financial institutions are already experimenting with the blockchain technology. Many experts consider it the biggest invention since the Internet.

Cryptocurrencies younger than Bitcoin, such as Ethereum, have started using the blockchain to automatically execute smart contracts, pay for invoices, etc. The advanced use of the blockchain technology is sometimes called Blockchain 2.0.

Since the blockchain is spread across the whole network and not centrally stored in one place it cannot be attacked, altered or deleted; it is an ideal database for digital voting, copyright protection, digital identity storage, birth, citizenship and ownership certificates and more.

Further and wider use of the blockchain technology is expected.


Bitcoin [BTC]:
Bitcoin (BTC) is the first decentralized digital currency, or cryptocurrency. The Bitcoin network is peer-to-peer and transactions take place directly between users, without an intermediary. Transactions are verified by a network of nodes and included in a public ledger, called a blockchain, through a process called mining. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto, and released as open-source software in 2009.

About Bitcoin:

Bitcoin is defined as a digital cash that started the cryptocurrency movement.

It was created in 2009 by an unknown person or group who went by the name, Satoshi Nakamoto.

Bitcoin does not rely on government/bank created money.

Bitcoin uses peer-to-peer technology to operate with no central authority or banks.

The managing transactions and the issuing of bitcoins is carried out collectively by the network.

Bitcoin is the first decentralized cryptocurrency.

The Cryptocurrency Bitcoin reputation has spawned copies and evolution into a new space of AltCoins.

Bitcoin is thelargest variety of markets and the biggest value.

Bitcoin having reached a peak of 18 billion USD - Bitcoin is here to stay.

With Bitcoin there can be improvements or flaws in the initial model however the community and a team of dedicated developers are pushing to overcome any obstacle they come across.

The Bitcoin is also the most traded cryptocurrency and one of the main entry points for all the other cryptocurrencies.

The price is not organic, is unstable, and Bitcoin have bull/bear up and down by 10%-20% in a single day.

Bitcoin is an SHA-256 POW coin with 21,000,000 total minable coins.

The block echange time is 10 minutes.

History of bitcoin

Number of bitcoin transactions per month (logarithmic scale)

Bitcoin is a cryptocurrency, a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities.[1] The presumed pseudonymous Satoshi Nakamoto integrated many existing ideas from the cypherpunk community when creating bitcoin. Over the course of bitcoin's history, it has undergone rapid growth to become a significant currency both on and offline – from the mid 2010s, some businesses began accepting bitcoin in addition to traditional currencies.[2]


Bitcoin was launched in January 2009 by a programmer or a group of programmers going by the name Satoshi Nakamoto.

It started simply as a decentralized electronic cash.

Decentralization was an important aspect, because all previous attempts to establish a digital cash with a central authority had failed.

The sole motivation for Bitcoin’s:

Bitcoin's creation seems to be the desire for a better payment system for eCommerce.

A system that’s more secure, faster and reliable compared to the system of deposit and credit cards over-viewed by a central authority.

Plus the transaction costs are incomparably smaller and stay the same regardless of the amount sent or received.

Bitcoin can be sent and received anywhere in the world, right away.

The big advantage of Bitcoin, as a currency, is its absolute independence of governments, banks and any central authorities.

In addition:

Transactions occur directly between pseudonymous people (their real names are not known), meaning there are no banks or middlemen.

Each transaction is recorded on a digital record kept by many people across the world known as the “blockchain”.

The data on the blockchain is publicly available and stored on many computers.

Because there are so many copies being simultaneously maintained, the transaction and banking data is very safe and virtually impossible to manipulate.

Individuals protect their bitcoins using their digital wallet.

A wallet is software that can only be accessed by using a key, which is a long string of letters and numbers.

Bitcoin’s price has risen into the thousands of dollars, but you can still own bitcoin by purchasing a fraction of it for dollars.

Because of bitcoin’s popularity, it has become an anchor in the cryptocurrency market. T

hat means, as the price of bitcoin goes up and down, the prices of other cryptocurrencies move too.

Ref: Bitcoin Wiki

[BGP] Byzantine Generals Problem: Defined in CryptoCurrency

[BGP] Byzantine Generals Problem: Defined in CryptoCurrency


Byzantine Generals’ Problem is defined as a situation where spread out units need to coordinate their behavior or action but cannot trust each other to get organized.

Byzantine describes the Byzantine Empire, this was the eastern part of Europe controlled by the Roman Empire from approximately 330 AD to 1453 AD.


Byzantine Generals’ Problem is a made up, historical situation where multiple generals and their individual armies have surrounded a city to attack it. The majority of the generals must somehow coordinate a decision to either attack or retreat at the same time, otherwise the situation will end in a major failure.

Byzantine Generals Problem Image

The main problem preventing coordinated action is low trust. Reasons for low trust may include:

  • The generals are far enough apart that they cannot communicate directly or even see each other, so they must trust their messengers to deliver messages.
  • One or more generals may be a traitor and could send false messages to the other generals.
  • One or more messengers may be a traitor and could send false messages to the other generals.
  • The enemy city may catch a messenger and send false messages.


This Byzantine Generals Problem is commonly brought up when talking about cryptocurrencies. 

The digital record, known as the blockchain, must verify and record identical information simultaneously across many thousands of computers and none of the computers can be trusted as a reliable source.
Bitcoin provided a unique solution to this problem known as mining:
  1. All computers verify the maximum number of transactions that can be stored at one time.
  2. The computers then compete to solve a very complicated math problem. Their motivation is a reward in bitcoin.
  3. The first computer to solve the problem would not only be rewarded, they would also record the transactions into the blockchain. Included in this recording is proof that they solved the math problem.
  4. Now the winning computer sends out their updated blockchain to the other computers.
  5. The other computers quickly and easily verify that the math problem was solved and also verify/update their recordings.
  6. The process repeats and all computers are again trying to solve the math problem.