Created On 08. Apr 2020
Updated: 2021-05-01 23:58:06.279598000 +0000
Created By: acidghost
Information is the basis of everything, and furthermore in the digital world, the transactions, money and the environment are all files. Let’s get a little back in time, and see first, how did the cryptocurrency concept look a while ago with the apparition of Bitcoin. A Bitcoin is an information structure that dwells in the blockchain.
An unknown char also known as Satoshi Nakamoto, wrote the w͢h͢i͢t͢e͢ ͢p͢a͢p͢e͢r͢ ͢o͢n͢ ͢B͢i͢t͢c͢o͢i͢n͢ in 2008, which had projected the blockchain technology behind it. While Bitcoin was among the first cryptocurrencies to run on it, nowadays, we have millions of applications. The concept of blockchain itself was firstly publicly described back in 1͢9͢9͢1͢.
Through the blockchain such data of a transaction as timestamp, destination and source are added as a block. The transactions are validated through powerful computers that must quickly solve complex mathematical problems (decipher lots of code). It also ensures that the proof-of-work algorithm is executed, which prevents the double-spending (currency duplication), which Nakamoto solved in Bitcoin's concept.
This problem-solving process is termed cloud-mining, which helps in checking the validity of transactions and is often driven by persons’ motivation to receive a reward in form of a cryptocurrency. The main purpose of mining is the decentralization of bitcoin's security. Only the first engine that solves the problem receives the prize. Stay aware - the reward is the incentive system.
The so known public ledger – the blockchain – is the decentralized public database which shows each validated transaction with the particular data.
The whole ledger is virtually transmitted on other machines, which makes it sort of the worst possible scenario if it would be an evil AI in the network – omnipotent (it’s just synced though, but you get the point). Anyway, this keeps it secure and in its core even if all hackers on earth would want to compromise all the information behind it, there would be no way besides to compute all the transactions and change them all simultaneously with an immense engine. A quantum computer could deal with that easily (not those created by humans).
The blockchain has only touched the edge of the iceberg, and the best and worst are still to come. Its validation scheme could be used in online votes or new digital patents. Corruption and digitally centralized ill-intentioned cahoots could be diminished by its expansion. However, give humans such tool, and this could serve as an effortless offensive penetration method as well or become the basis of an automated encrypting AI that could turn out to be a new weapon for the bad guys. Hopefully we will still see the net for a while. Stay tuned for more examples on how transactions work, creating cryptocurrencies, and all the usual network stuff.