What Is Blockchain? How are Blockchain & Cryptocurrencies Linked? What Are The Different Types & Uses Of Blockchains and Cryptocurrencies?

What Is Blockchain? How are Blockchain & Cryptocurrencies Linked? What Are The Different Types & Uses Of Blockchains and Cryptocurrencies?

What Is Blockchain? How are Blockchain & Cryptocurrencies Linked? What Are The Different Types & Uses Of Blockchains and Cryptocurrencies?

Not all cryptocurrencies—and not all blockchains that the various cryptocurrencies rely on—are created equal. All cryptocurrencies rely on one form of blockchain technology or another to function—without blockchain technologies, cryptocurrencies would have no reliable way of handling the kind of decentralized, “trustless” accounting necessary to ensure a hack- and tamper-proof ledger of transactions.

It can be quite challenging to attempt to summarize all of the various blockchain technologies currently in existence—there are currently thousands of them. An easier way to go about doing this is first to look at the kind of blockchains currently in existence in a general sense, and then move on to a discussion of the various types of cryptocurrencies themselves.

Different Types Of Blockchains

Before discussing the different types of blockchains, it would be useful first to have an understanding of blockchain technology in general. Blockchain technology, defined at perhaps its most simple, is a distributed accounting ledger that is used to record transactions in a tamper-resistant, verifiable, and permanent manner. When blockchain technology is described as “open,” it refers to the open-source code that most blockchain protocols are built on.

Blockchain technologies can be either public (like Bitcoin) or private and still use this open-source code. Sometimes, you’ll see the term “distributed ledger” used to describe certain types of blockchains. This is really just another way of saying “decentralized,” as the continually developing ledger which records transactions are shared by multiple participants in the blockchain and is not owned or controlled by a single central authority.

Blockchain technology allows efficient accounting of any transaction between two parties, largely because there is no need to rely on a third party (like a bank, in traditional financial transactions) to verify or facilitate the transaction. A transaction is mutually agreed upon by the parties involved—an exchange of a set amount of cryptocurrency between crypto wallets, for instance—and is then entered into the ongoing ledger—the next block on the chain.

Once entered and verified by the blockchain network, the transaction is permanent and can’t be altered in any way. The various cryptographic schemes (like proof of work or proof of stake) behind these blockchains allow for both the accurate recording and verification of the transactions, resulting in a hack-proof system.

It can perhaps get a bit confusing with the new applications that blockchain technology is being used for. There are, in effect, three primary kinds of blockchains, if you’re not counting databases or distributed ledger technology, which are both built on the same technological foundations.

Public Blockchains

There are public blockchains—such as the kind used by Bitcoin, Ethereum, and in fact every other form of cryptocurrency. This type of blockchain is generally open-source and “democratic,” allowing anyone to participate simply as users making transactions through the blockchain, or as “miners.” Miners (called Validators in Ethereum) verify the validity of new blocks by solving complex mathematical “puzzles” through a proof of work protocol and are awarded a unit of cryptocurrency for their efforts.

Members of the public are also allowed to participate as community members and even to an extent as developers, suggesting or in some cases implementing advances and refinements in the way the blockchain functions. A good example of this is the Ethereum blockchain: though still using proof of work protocols for validation of new blocks, there has been substantial discussion of moving to a proof of stake system, which brings with it significant energy savings as it relies on one node for the validation of new blocks instead of many nodes all engaged in redundant work, in a race to “solve” the next new block.

Most significantly, all transactions recorded on a typical public blockchain are fully transparent and allow anyone to examine the details of any (and all) transactions. Refinements in blockchain technology allow for public blockchains with “private” functionality, which is blockchains that operate in much the same way as the Bitcoin public blockchain, but which are still capable of securely processing transactions, as we’ll see below in the discussion of so-called “private coins.”

Public blockchains are built to be completely decentralized, meaning there is no central authority, individual, or other entity controlling which transactions are entered into the ongoing ledger that makes up the blockchain or dictating the order in which they are validated and processed. Public blockchains are meant to be resilient, tamper-proof, and “censorship-resistant.”

This is accomplished by allowing anyone to join the network and run a full blockchain node, regardless of their geographical location, nationality, or other signifying characteristic. Because of this, it is next to impossible for governments or other would-be regulating authorities to interfere in the operation of a public blockchain.

Private (and Consortium) Blockchains

There are private blockchains—examples would be things like R3 Corda and Hyperledger. Also, sometimes called “permissioned” blockchains, private blockchains are different in a number of significant ways from public blockchains. In order to join the network of devices that runs a private blockchain, a would-be participant must first be granted consent.

Transactions are, therefore, more private, and are only available to those who have already been given permission to join the network. Private blockchains, while often not fully centralized, are much more centralized in nature than public blockchains, as they rely on something like a central authority to grant permission and oversee transactions. The authoritative bodies running a private blockchain have significant control over both participants and development (or “governance”) structures.

Private blockchains are most commonly used by enterprises who want to share data and collaborate by utilizing or accessing it, but naturally don’t want their proprietary business information available to any member of the public, which would be the case with a public blockchain.

Consortium Blockchains

Also sometimes called “confederated” blockchains, these are an offshoot of private blockchain technology, and are essentially the same as private blockchains with the marked difference that they rely on a group of authorities rather than a single entity. This allows different entities—in theory, different corporations, for instance—to collaborate using data available to every member of the consortium. Though they may be in direct or indirect competition, by sharing data that is common to their interests, they are able to collaborate effectively, and there is mutual benefit from such an arrangement. Consortium blockchains, it is hypothesized, will likely see use by entities like governments, banks, financial institutions, and corporations in the procurement, logistics, and supply chain sectors.

Types of Cryptocurrencies

Also sometimes called “confederated” blockchains, these are an offshoot of private blockchain technology, and are essentially the same as private blockchains with the marked difference that they rely on a group of authorities rather than a single entity. This allows different entities—in theory, different corporations, for instance—to collaborate using data available to every member of the consortium. Though they may be in direct or indirect competition, by sharing data that is common to their interests, they are able to collaborate effectively, and there is mutual benefit from such an arrangement. Consortium blockchains, it is hypothesized, will likely see use by entities like governments, banks, financial institutions, and corporations in the procurement, logistics, and supply chain sectors.

Payment Currencies

Cryptocurrencies of this type are intended for the payment of goods and services. Payment currencies can be used for transactions between private parties for whatever purpose, or (as is increasingly the case with Bitcoin) can be used to pay for tangible items in “the real world.” More businesses are accepting Bitcoin as a payment every day, and in some cases, local governments have moved toward accepting the cryptocurrency as a form of payment for things like parking tickets. In almost every case, payment currency cryptocurrency can also be “cashed out” from their digital form in exchange for local fiat currencies like the dollar, the euro, etc. Examples of well-known payment currencies are Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Tether (TUSD) and Litecoin (LTC), among others.

Blockchain Economies

This is often argued as a step forward in the concept of digital, decentralized currency. A blockchain economy, which is often also called simply a blockchain platform, utilizes blockchain technology in broader, more innovative ways. Instead of merely existing to keep a record of various cryptocurrency transactions, blockchain economies allow their users to create things like discrete digital assets (most commonly referred to as tokens) and decentralized applications (DAPPS) that use the underlying blockchain technology as a basis for transactions of a different type.

In one notable instance, a cryptocurrency called Golem (GNT), while distinct and separate from the cryptocurrency primarily supported by the Ethereum blockchain (commonly also called Ethereum, but more correctly called Ether), exists entirely on the Ethereum blockchain. The value of Golem is not tied to that of Ether—it merely “piggybacks” on the Ethereum technology, which is designed in such a way as to make the creation of “tokens” like the Golem cryptocurrency possible.

Though this is an example of a cryptocurrency within a blockchain economy, the economies themselves are also used for the support and payment of things like virtual assets, processing power, the running of dependent applications, and many more various (and imaginative) purposes.

Perhaps the most notable cryptocurrencies falling under the example of blockchain economies would be Ether (ETH), Ethereum Classic (ETC), BCH (SLP), EOS (EOS), NEO (NEO), and Tron (TRX).

Privacy Coins

This is often argued as a step forward in the concept of digital, decentralized currency. A blockchain economy, which is often also called simply a blockchain platform, utilizes blockchain technology in broader, more innovative ways. Instead of merely existing to keep a record of various cryptocurrency transactions, blockchain economies allow their users to create things like discrete digital assets (most commonly referred to as tokens) and decentralized applications (DAPPS) that use the underlying blockchain technology as a basis for transactions of a different type.

In one notable instance, a cryptocurrency called Golem (GNT), while distinct and separate from the cryptocurrency primarily supported by the Ethereum blockchain (commonly also called Ethereum, but more correctly called Ether), exists entirely on the Ethereum blockchain. The value of Golem is not tied to that of Ether—it merely “piggybacks” on the Ethereum technology, which is designed in such a way as to make the creation of “tokens” like the Golem cryptocurrency possible.

Though this is an example of a cryptocurrency within a blockchain economy, the economies themselves are also used for the support and payment of things like virtual assets, processing power, the running of dependent applications, and many more various (and imaginative) purposes.

Perhaps the most notable cryptocurrencies falling under the example of blockchain economies would be Ether (ETH), Ethereum Classic (ETC), BCH (SLP), EOS (EOS), NEO (NEO), and Tron (TRX).

Utility Tokens

On a blockchain that supports it, the creation of a “token” is similar to, but not the same as, the creation of a unit of cryptocurrency. For a token to qualify as a utility token, there is, however, a strict set of legal regulations and requirements. We won’t go into those requirements here, but one example of a token that is currently considered a utility tokens is Binance’s “BNB” token. This token was initially created to allow for owners of the token to pay for trading fees with a discounted rate on the Binance Exchange.

Utility tokens can sometimes be digital tokens used in transactions to pay for or fund blockchain-based services or products. They typically run on a blockchain platform—which you’ll remember is another name for a blockchain economy. The most popular utility tokens to date are based on the Ethereum blockchain, but as new blockchains come into existence all the time, other blockchains have (and will continue to) spawn their own tokens.

Aside from BNB, other notable examples of utility tokens include the Basic Attention Token (BAT), Civic (CVC), OmiseGo (OMG), Monarch Token (MT), and 0x (ZRX).

Stablecoins

Lastly, there are stablecoins, so-called because (unlike other cryptocurrencies), they are intended to hold a fixed value and be traded at the same price, without market fluctuations being a factor. This kind of cryptocurrency is popular among investors and other traders of different kinds of cryptocurrency, as they represent a way to possibly hedge against possible losses in the secondary cryptocurrency being used to pay for the stablecoin.

For instance, say an investor holds $1,000 worth of Bitcoin. If that investor suspects that the value of the Bitcoin is likely to decrease in the near future, he or she could buy $1,000 worth of a stable coin asset, thereby divesting the held Bitcoin and being protected from the (assumed) devaluation. This, in theory, should protect the trader from financial loss—if his or her instincts are correct. However, with all things that have to do with money, there’s no such thing as a guaranteed thing. Everything has risks, and one must do their due diligence and contact professional financial advisors before making any decisions. Please note, this article is not financial advice, but to help give you a better understanding of the blockchain and cryptocurrency landscape.

The methods that different stablecoins use to maintain a fixed price vary. Stablecoins can be tied to a currency—for instance, a hypothetical stablecoin could be said to always be worth $1 USD. Though the value of that $1 USD may fluctuate, the stablecoin will always be exchangeable (at least in theory) for $1 USD. Like other commodities traded on traditional stock markets, stablecoins can also be tied to real-world commodities like precious metals, or in some cases, “baskets” of commodities, as is commonly done in traditional market investing.

Notable examples of stablecoins would include Dai (DAI), Gemini (GUSD), Paxos (PAX), Tether (USDT), TrueUSD (TUSD), and USD Coin (USDC).

Conclusion:

** This is not financial advice and these are simply my own opinions, as such, this should not be treated as explicit financial, trading or otherwise investment advice. This is not explicit advice to buy these cryptos, do you own research.**

***Disclaimer: Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

***ALWAYS check with professional tax service providers and legal professionals before you buy, sell or trade cryptos!

Thanks for reading, God Bless and have an awesome one!

Be sure to check out our other articles on to cryptocurrency, bitcoin and blockchain technology below:

“Blockchain: What It Is and How It Works”; which delves into the history of blockchain, how blockchain works, how cryptocurrency uses blockchain, discusses anonymity, various types of blockchains and the different uses.

 “What is Ethereum? How does Ethereum work? ETH Explored:” Dive deep into one of the largest blockchains, discover how it is different from Bitcoin and other cryptocurrency projects.

 “How To Store Cryptocurrency / Safeguard Your Crypto Assets”; which discusses the most popular cryptocurrencies, how to protect your crypto, online wallets, offline storage, specialty hardware, crypto exchanges, and even gives Crypto Beadles Personally Recommendation with storing cryptocurrencies.

 “Scrubbing Currency: A Comparison of Crypto to Fiat for Known Money Launderings”; This article dives into the various efforts to curb money laundering, typical money laundering with fiat currency problems faced by authorities worldwide, the rise of cryptocurrency, the differences between traditional fiat and cryptocurrencies, the history of traditional banking and it’s many failures.

What is Ethereum? How does Ethereum work? ETH Explored:

What is Ethereum? How does Ethereum work? ETH Explored:

What is Ethereum? How does Ethereum work? ETH Explored:

Chances are you’ve heard of Bitcoin, the first cryptocurrency created in 2009 by a mysterious (some would even say shadowy) developer—or group of developers—using the pseudonym Satoshi Nakamoto. You may even be a little familiar with the blockchain, the virtual ledger of transactions that makes Bitcoin possible, and know that blockchain technology is expected to have a revolutionary impact on … well, everything. However, have you heard about Ethereum?

You may have heard of Ethereum and know that it’s a cryptocurrency similar to Bitcoin. It’s actually the second-largest cryptocurrency based on market capitalization, which (at the time of this writing) is over $18 billion USD; But Ethereum isn’t just a cryptocurrency—it’s a separate blockchain platform, with distinct differences to the one that underpins Bitcoin. The name Ethereum refers to the Ethereum blockchain—the proper name of the cryptocurrency is Ether (though it is often referred to as Ethereum or ETH).

Founder of Ethereum Vitalik Buterin
Getty Images

Ethereum was launched on July 30th, 2015, by a group of eight developers. It was initially proposed in late 2013 by a Russian-Canadian programmer named Vitalik Buterin, who was joined on the project by Mihai Alisie, Amir Chetrit, Charles Hoskinson, and Anthony di Iorio. The initial five developers were joined by Joseph Lubin, Jeffrey Wilke, and Gavin Wood in early 2014.

At the time of its initial launch, a single Ether token (or “coin”) was worth about $0.30 USD. At the time of this writing, a single Ether token is worth $170.77. In other words, $30 of Ether in 2015 would be worth a lot more today than it was at its inception.

How Does Ethereum Work?

The Ethereum blockchain is an open-source platform used to create and run decentralized digital applications—commonly called “dapps”—that enable its users to conduct transactions directly with one another to buy, sell, or trade goods and services without a centralized authority serving as a “middle man.” Users of the Ethereum blockchain can transfer money without needing to first go through a bank, can draw up binding sales contracts without calling on the services of a lawyer, and can even raise funds for projects like app development through a system that relies on “crowd sales,” which operate in a way that’s similar to traditional crowdfunding systems, but (like everything on the Ethereum blockchain) is decentralized.

Ethereum runs on a global network of computers that work together as a sort of supercomputer, assembling and running “smart contracts,” or applications that operate independently of any third party. This means these smart contract apps are highly resistant to tampering—hacking, interference, or even censorship—as the Ethereum blockchain is (due to its distributed nature) theoretically impossible to hack.

While the blockchain that powers Bitcoin transactions was created almost solely for that purpose, the Ethereum project has always had larger goals in mind. In fact, Ethereum’s own website puts it in plain language, stating “Ethereum is a global, open-source platform for decentralized applications. On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world.”

That code—the smart contracts—runs on what’s called the “Ethereum Virtual Machine,” which is another name for that decentralized, distributed computing network made up of all the devices running Ethereum nodes. Anyone can set up and run an Ethereum node, which provides computing power to the larger virtual machine. Anyone else can then run a smart contract—essentially, an application written to run on the Ethereum Virtual Machine.

Blockchain Differences: Ethereum vs. Bitcoin

The Bitcoin blockchain exists, first and foremost, to keep track of Bitcoin. Though other uses have presented themselves, that first blockchain was devoted to making ownership and transfer of the world’s first cryptocurrency possible. The Ethereum blockchain also tracks its own cryptocurrency—Ether (ETH)—but its main focus is far different. While the Bitcoin blockchain is (more or less) a ledger of transactions, Ethereum’s blockchain was built with a focus on running the decentralized applications written specifically for it.

The Three Layers of Ethereum

In order to focus primarily on running decentralized, distributed applications, Ethereum was constructed with three layers. The first layer is basically the blockchain—the large network of computers that process transactions and keeps a ledger of them, much in the same way that the Bitcoin blockchain works. The second layer is the software layer—the programming language (called Solidity) that the smart contracts are written in and run on. The second layer relies on the first for its operation. The third layer is made up of all the different applications that run on Solidity, with different features and offering different services to users of the Ethereum network.

Proof of Work

Then there’s Proof of Work vs. Proof of Stake. This gets a little technical, so bear with us. Proof of work is essentially a method of protecting against tampering or interference, like a distributed denial-of-service (or DDoS) attack. DDoS attacks work by tying up all of the resources of a targeted computing system by sending an avalanche of bogus requests—imagine someone tying up your phone by calling so quickly and so often that it was impossible to receive other calls or make any outbound calls yourself.

Proof of work—which was the central revolutionary idea behind the Bitcoin blockchain—allows for what are called trustless and distributed consensus systems. Basically, that translates into a system that relies on a public ledger of every Bitcoin transaction—ever—to keep track of the flow of the cryptocurrency. That ledger relies on “blocks” of transactions—and those blocks are “chained” together, each one relying on the one before it for proof of validity.

But these blocks have to be verified by nodes on the network before they’re accepted onto the chain. Think of it this way: each new block is like a puzzle with a set number of pieces. Those pieces are sent out—digitally—to every node on the blockchain network that’s set up to accept them. The only purpose of these nodes is to verify these new blocks. Now imagine each puzzle piece has a random number on it. The puzzles pieces will only fit together correctly one way—say to form a square—but the numbers have nothing to do with how the pieces fit together. That’s where the puzzle-solving comes in.

So, these puzzle-solving nodes scramble to assemble the puzzle correctly, trying to combine the pieces in different ways until they find the right order that makes the desired shape. The first one to get the square announces it to the rest of the network—essentially shouting “Bingo!”—and then transmits the instructions for how to put the puzzle together. The instructions are the order in which those random numbers must be assembled, row by row, to make the square. It takes some time to solve the puzzle, but once it’s solved, it can easily be verified by other nodes on the network (by following the pattern of random numbers, allowing them to form squares with their own puzzle pieces, thereby validating the work of that first lucky puzzle solver).

That’s the proof of work: the list of random numbers in the correct order to solve the puzzle. The way proof of work guards against tampering or DDoS attacks is pretty straightforward: an attacker can’t target every puzzle solving node at once, so even if they manage to shut down one or two, there are a bunch of other nodes working on the puzzle—which will still get solved.

That’s a very simplified example, but it’s more or less accurate. In Bitcoin, the puzzle solvers are called “miners,” and they’re rewarded for solving the puzzle by being allowed to create a new Bitcoin, which is their payoff for the amount of work they put in—work that was done to verify the new block on the blockchain, and solving these puzzles isn’t trivial. In some estimates, all the computers running the Bitcoin blockchain at any given moment are consuming about the same amount of energy as the entire country of Ireland. That’s significant.

Proof of Stake

Then there’s Proof of stake. This system operates much differently. Proof of stake works sort of like a lottery. You “buy-in” for the chance to validate a new block before it gets added to the chain—to check it over, run computations on it, and make sure it’s accurate. In fact, these block creators are called “validators” in the proof of stake system.

The validator is chosen more or less at random—like in a lottery—but the amount of cryptocurrency they’ve put up—their “stake” in the process—does have a direct effect on their likelihood of being chosen. Think of it like buying lottery tickets: the more you buy, the higher your chance of winning, though there is still the chance that someone who has bought fewer tickets (put up less stake) will get the prize. You don’t lose the stake you put up—in fact, if you’ve chosen to validate the new block, you receive a new unit of cryptocurrency as a reward.

The way this system guards against malicious action is simple—if you’re caught trying to alter a new block or do something shady with it, you do lose the stake you put in. It’s like a guarantee—in a proof of stake system, you’re essentially saying “I promise this much cryptocurrency that I won’t do dishonest things if chosen to validate the next block.” See the logic? The more you put up, the higher your chances of being chosen as a validator—and the greater your loss if the rest of the network calls shenanigans on you.

The single most significant advantage that proof of stake has over proof of work is that it’s much more economical. Once a validator is selected, they have the exclusive right to validate the next block in the chain. That means one computer doing computations—instead of hundreds of thousands all racing with copies of the same puzzle, trying to be the one to solve it first. The other validators aren’t wasting energy, which dramatically reduces energy consumption compared to proof of work, and this is (of course) much better for the environment.

Ethereum hasn’t yet converted to a proof of stake validation system, but it’s something that’s been widely discussed, and the current consensus is that (sooner or later), the Ethereum blockchain will run on proof of stake.

Other Benefits of Ethereum

Ethereum is, as we’ve seen, significantly different in terms of operation than the traditional Bitcoin blockchain. There are other improvements over the older technology—transactions are faster on Ethereum, at about 15 per second, while Bitcoin has less than half of the transmission speed, at about seven per second.

It’s also cheaper to send transactions on Ethereum than on Bitcoin. This gets complex very fast, but when you’re sending cryptocurrency, there’s always a transaction fee—the amount you’re paying to have that transaction transmitted through all of the various computers that make up the network. That fee has been growing on Bitcoin—transaction fees range significantly depending on how fast you want your transaction to go through.

However, Ethereum uses a different method of calculating transaction fees, and though it is comparing apples to oranges, it is still much, much lower. In Ethereum, you don’t pay per transaction—which is how Bitcoin does it—but rather per computational step, which is more befitting a network built and intended on which to run applications. Ethereum uses a system they refer to as “gas,” and each computational step requires a specific amount of gas. The price of gas is determined dynamically by the users of the network—higher network usage drives the price up, for instance—and the total fee is calculated as the amount of gas required times the current gas price. It may seem a little confusing, but it’s cheaper—current transaction fees on the Ethereum network are about $0.16.

Ethereum’s Amazing Flexibility

Perhaps the most fantastic thing about Ethereum’s blockchain system is how flexible it is. You can, for instance, easily create your own cryptocurrency. The Solidity program language and the Ethereum system has built-in, everything you need to write code that would allow you to create a new form of cryptocurrency, set a value to it, and allow for interested parties to buy and sell it. This is done by creating a “token,” or an object that has a certain value assigned to it by the creator. The value of the new cryptocurrency can change over time, and you could theoretically create a competitor to the Ether cryptocurrency while using the network that Ether is native to.

Not only that, but you can create games on the Ethereum network. The smart contracts allow for the creation of games of chance—like dice, or roulette—and there are, in fact, already Ethereum “casinos” which are increasing in popularity all the time.

To learn more about cryptocurrency, blockchain, and ethereum, please be sure to check out our blog post Here on the Top 25 Bitcoin, Blockchain and Cryptocurrency books!

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Top Blockchain, Bitcoin And Cryptocurrency Books For Beginners Or Those Who Want To Learn More!

Top Blockchain, Bitcoin And Cryptocurrency Books For Beginners Or Those Who Want To Learn More!

Top Blockchain, Bitcoin And Cryptocurrency Books For Beginners Or Those Who Want To Learn More!

Want to learn more about the bitcoin, blockchain, and cryptocurrency, but not sure where to begin? While the Internet is usually a great place to start extensive research, it can sometimes be difficult to sieve through all the information in search of what is useful, valuable, and even accurate. In this article, we have compiled 25 books all about blockchain and cryptocurrency, all of which contain information beginners should understand and appreciate. Read on to learn more.

***Please note, this list and review of books is not a recommendation to buy, sell, or invest and is not to be misconstrued as financial advice. Always seek professional financial and legal advice from certified professionals before investing in anything.

#1. The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them By Antony Lewis

This is an accessible guide to Bitcoin, blockchains, and cryptocurrency and is aimed at the reader with little to no background on the subject. Lewis covers the history and basic background of blockchain technology and cryptocurrency, including Bitcoin, Ethereum, and other cryptocurrencies. Readers can gain a good general understanding of Bitcoin basics, including how the blockchain works, what it is used for, how payments are made and how transactions on the blockchain network are kept secure and “hack-proof.”

The author also delves into the subject of buying and selling Bitcoin, as well as the process of mining it. He covers these topics in an accessible way, especially for a general audience who may not know the first thing about the technology behind Bitcoin. Other cryptocurrencies are examined and explained, and some time is spent on the subject of cryptocurrency pricing and how relative values are typically assigned to “virtual currency.”

#2. Blockchain: The Next Everything By Stephen P. Williams

This introduction to blockchain technology and everything it makes possible is engaging, well-written, and easy to understand, even for readers who don’t have a highly technical background. Williams tackles the subject of the blockchain by examining how cryptocurrencies like Bitcoin are in essence the tip of the iceberg when it comes to what this technology can and—in the view of Williams and many others—will deliver.

He manages to explain the subject in a straightforward and accessible way, using apt metaphors to bring understanding to a general audience and does an admirable job of illustrating why this unhackable technology and its decentralized system of operation may revolutionize banking, business, and eventually many aspects of our everyday lives. He also dives into how blockchain technology represents a genuinely revolutionary and potentially life-changing paradigm shift once it sees widespread use, which Williams depicts as all but inevitable.

#3. The Internet of Money by Andreas M. Antonopoulos

Antonopoulos, is a well-known information-security expert who has written other titles on the subject of Bitcoin, presents a collection of essays that deal less with explaining the technical ins and outs of Bitcoin and the blockchain, but rather takes an informative and nuanced look at the significance of the cryptocurrency that changed everything and the revolutionizing power of the technology behind it.

Antonopoulos presents an intriguing view of a world where Bitcoin brings transformative and disruptive power to financial systems which have grown antiquated in their function and their influence. He makes the case that Bitcoin represents less a novel currency that exists in the decentralized and democratized blockchain, but in actuality is a harbinger of sweeping social change and transformation.

Andreas writes that Bitcoin represents an evolution in economic systems that will fundamentally change the way the concept of currency is thought of and utilized, and this “internet of money” will bring sweeping social and political changes, altering the international landscape of trade and finance in bold, progressive, and liberating ways.

#4. The Unified Wallet: Unlocking the Digital Golden Age by Kyle Kemper

Kemper presents a speculative vision of a world a few years from now, when cryptocurrencies will have matured to a point where a unified digital wallet will represent a revolution in personal freedom, allowing the individual not only to access trade and commerce on a global scale—with no need to exchange currencies or worry about exchange rates. It will also pave the way to revolutionize the way the private citizen navigates political and private institutions.

Kemper makes a case for a mature adoption of blockchain technology leading to sweeping changes in how we store, retrieve, and access everything from financial exchanges to legally binding contractual agreements and even personal medical records. With a solid grounding in the potential of these technologies as they exist today, Kemper illustrates one way the key elements could be drawn together to form the basis for a digital revolution in not only commerce but information technology as we know it.

#5. The Crypto Crash Course: The Ultimate Cryptocurrency Guide for Beginners! A Thorough Introduction to Cryptocurrency Mining, Investing and Trading, Blockchain, Bitcoin and Digital Coins, and More… by Frank Richmond

Perhaps a bit sensationalist in scope and tone, The Crypto Crash Course nonetheless succeeds in providing a solid grounding in the blockchain technology that made Bitcoin and other cryptocurrencies possible. Richmond goes on to discuss many of the other “altcoins” in the cryptocurrency world and suggests methods to capitalize on investing in not only Bitcoin but some of the lesser-known cryptocurrencies as well.

Richmond ties the financial collapse of 2008 to the birth of Bitcoin and sees blockchain technology as a liberating force capable of changing the way commerce is conducted. Presenting solid arguments for how the existing financial system was fundamentally changed by blockchain and what Richmond calls “the cryptocurrency revolution,” he goes on to detail the meteoric rise in popularity of cryptocurrency and moves on to focus on the financial opportunities the emerging cryptocurrency markets represent.

#6. Ultimate Blockchain Technology: Mega Edition by Lee Sebastian

Marketed as a six-book series, the combined page count of this “Mega Edition” is 378 pages, making each individual book a little on the slim side. Originally published on Amazon’s Kindle platform, these books represent a decent, non-technical introduction to the concepts behind the blockchain and Bitcoin.

Sebastian does a good job of providing technical information in a manner that’s accessible to most readers, and the six separate volumes cover everything from the basics of understanding the concepts behind the blockchain to how its distributed ledger technology is used in the buying and selling of crypto—or cryptocurrencies—in general. The later volumes of this book series detail Bitcoin investment strategies and the basics of Bitcoin mining—a highly technical undertaking that few may want to engage in. Still, an informative (if quick) read.

#7. The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

In this book, Ammous takes an extensive view of Bitcoin, analyzing its historical importance and the factors that led up to its creation, the various economic properties which gave it its meteoric rise, and continues with a speculative look at the long-term implications not just economically, but socially and politically as well. Perhaps most interesting is the connection drawn between monetary collapse—which Bitcoin could be argued to be a symptom and a harbinger of—and the historical collapse of civilizations which seem to coincide with the failure of existing currency systems.

Ammous does an admirable job of explaining both how Bitcoin functions and the technological underpinnings of this revolutionary new form of currency, and proceeds to provide intriguing and wide-ranging speculation on Bitcoin’s likely impact on world governments and how they may already be losing control of currency—bringing about an apolitical, international economic reality where the individual has control over how and where to engage in commerce, unfettered by centralized banking authorities or governments.

#8. Beyond Blockchain: The Death of the Dollar and the Rise of Digital Currency by Erik Townsend

Townsend, formerly a distributed systems architect and an expert in the nascent technologies involved in the creation of the blockchain and its subsequent use to facilitate cryptocurrency, subsequently worked as a hedge fund manager, where he gained extensive insight into the ins and outs of reserve currency.

As such, this makes him perhaps uniquely qualified to write a book with such a provocative title, and he shares his expertise on both conventional and virtual currency and how the latter may well pave the way for the eventual obsolescence of the former. Most compelling is Townsend’s suggestion that the “death of the dollar” may not come at the hands of apolitical cryptocurrency adopters embracing the democratization of a decentralized economic system, but rather by foreign governments—namely Russian and Chinese—intent on eliminating the US dollar’s dominance on the world economic stage.

#9. Unblocked: How Blockchains will Change Your Business (and What to do About it), by Alison McCauley

Here, McCauley focuses on the blockchain and the revolutionary changes this technology promises to bring with it as it gains ever more mainstream acceptance and relevance. Comparing blockchain technology to no less transformative technologies than social media, mobile computing, and even the birth of the internet itself, she makes the case that blockchain technologies will invariably and inevitably alter the structure and functioning of conventional industries and business models, while simultaneously bringing sweeping changes to every aspect of private and public life.

Practical and measured in scope and content, Unblocked illustrates with admirable clarity what blockchains are and how they present novel and far-reaching opportunities for change. What’s more, McCauley illustrates strategies that informed parties can use to harness the power of this growing phenomenon and use it as a force to empower—not obviate or disrupt—the function of existing organizations in a world soon to be transformed by this pervasive technological advance.

#10. Blockchain Technology: Understanding the Technology behind Cryptocurrency, Blockchain’s Limitless Potential and its Effects on Money and the World by David Vela

Vela presents a compendium of facts about blockchain intended for a general audience in a way that’s both accessible and concise. He examines the fundamental history of blockchain technology and provides an easy-to-understand grounding in the basic design and functionality of the blockchain. Building on basic definitions and concepts central to understanding the blockchain, Vela covers issues like how the integrity of the blockchain is maintained and verified, how the fundamental trust of blockchain accounting functions, and goes on to present blockchain technology as a revolutionary force capable of bringing about unprecedented change.

He examines both the numerous benefits of blockchain technology as well as some of what he sees are possible downsides or disadvantages, expounds on the likely effect of blockchain technology on the future of global financial markets, and rounds out the book by clearing up some “myths and misconceptions” of the nascent technological powerhouse.

#11. The Crypto Intro: Guide To Mastering Bitcoin, Ethereum, Litecoin, Cryptoassets, Blockchain & The Age Of Cryptocurrency Investing by Nathan Rose

Rose writes about Bitcoin and other cryptocurrencies primarily from an investor’s point of view, touting the many advantages of the various forms of cryptocurrency and likening them to “the next internet” in terms of their capacity to enact sweeping changes in commerce, investing, and other aspects of finance.

Underscoring the decentralized and stateless nature of cryptocurrency, Rose highlights the challenges traditional financial institutions, and perhaps even governments may face with the rise of cryptocurrency. It is marketed as a “practical guide,” and it’s not an unfair evaluation, as the author presents all the information a cryptocurrency novice would need to begin investing—or at least to make their first purchase—in crypto. With guides on how to join a cryptocurrency exchange, it’s a good read for those who are interested in cryptocurrency primarily as a potential investment opportunity.

#12. The Layman’s Guide to Bitcoin: What it is, How it Works, and Why it Matters by Logan Brutsche

This Kindle-only eBook is a quick read, and while geared toward a non-expert audience, does a thorough job of explaining the intricacies of Bitcoin and blockchain in a manner that’s both accessible and complete. Making good use of illustrations and examples, Brutsche guides the reader through a solid understanding of the key concepts and works his way up to a comprehensive overview of more advanced concepts and trending developments.

The book aims to provide a grounding in the core concepts of Bitcoin and other cryptocurrencies and does a good job of that. While not providing exhaustive information on the subject or going into the intricacies of related technology like blockchain, by the end of this eBook, readers will be conversant on the subject of cryptocurrencies as a whole. A great starting point for those interested in the subject.

#13. Understanding Blockchain: Learn How Blockchain Technology is Powering Bitcoin, Cryptocurrencies, and the Future of the Internet by Daniel Frumkin

This book presents blockchain as a sort of conquering liberator, bringing its “disruptive” power to centralized digital networks and presenting a wildly democratizing force that is, as many other books and authors have said, the most innovative and revolutionary technological advance since the birth of the internet.

The book explains blockchain from the technology that powers it to its use in practical applications, its intersection with Bitcoin, and expounds from there on the various advantages blockchain technology provides. It sketches out current and likely future scenarios of how businesses will use blockchain in all manner of applications. With an almost evangelical zeal, the author posits that blockchain promises to put an end to corruption and the centralized institutions that enable it, ushering in a new era of openness, individual empowerment, and honesty.

#14. Blockchain: Bitcoin, Ethereum & Blockchain: Beginners Guide to Understanding the Technology Behind Bitcoin & Cryptocurrency by Artemis Caro

Caro presents this work (originally a three-volume set on Amazon’s Kindle platform) as less of a technical guide and more of a practical introduction to the concepts behind cryptocurrency technology. Intended for a non-technical audience, the book examines the history of blockchain technology and its use in managing and safekeeping digital transactions, a basic roadmap regarding ways that businesses and individuals may potentially profit from adopting blockchain, and continues onto the subject of Bitcoin and the Ethereum cryptocurrency.

The author’s look at Bitcoin and other cryptocurrencies is as practical as the first part of the book, and he again offers some strategies that one might use to buy, safely store, and trade Bitcoin and Ethereum, ultimately with an eye toward making a profit in these emerging virtual markets. Presenting cryptocurrencies, powered by the blockchain, as nothing less than a financial revolution in the offing, Caro provides a solid and enthusiastic grounding in the subject while not delving too deeply into the technological basis behind them.

#15. The Book Of Satoshi: The Collected Writings of Bitcoin Creator Satoshi Nakamoto by Phil Champagne

Satoshi Nakamoto is the pseudonym adopted by the creator—or creators—of Bitcoin, and the person or people behind it have been cloaked in shadowy details and internet myth since the inception of the original cryptocurrency. Champagne presents Satoshi Nakamoto as roughly equivalent to the currency created under that name: existing only virtually, a primarily online entity who cannot be interacted with in an analog world.

In an effort to present a more complete picture of the thinking or motivation behind the Nakamoto persona, Champagne catalogs and presents the “essential writings” as they appeared under the Nakamoto name in emails and posts on computer forums. Sticking to chronological order, the material allows for a great understanding of Bitcoin and its fundamentals, as well as giving the perceptive reader some insight into the motivations behind the Nakamoto enigma.

#16. The Blockchain and the New Architecture of Trust by Kevin Werbach

An Associate Professor of Legal Studies and Business Ethics at Wharton, Kevin Werbach offers an original and interesting take on many of the intricacies involved with the blockchain. He presents his analysis of blockchain and what he sees as its true potential, as well as some of the potential dangers and drawbacks inherent in the technology. He meticulously explains how blockchain works, which he presents as a technology “resting on foundations of mutual mistrust.”

Werbach details the emergence of the blockchain, its intersection with Bitcoin, and how (despite early adoption by money launderers and the international drug trade) the technology behind blockchain has been the genesis of hundreds of new companies, the destination of billions of dollars of speculative investment, and has now been embraced by financial institutions and corporate organizations worldwide.

#17. The Story of the Blockchain: A Beginner’s Guide to the Technology That Nobody Understands by Omid Malekan

Malekan sets out to explain blockchain technology for the layman by using a series of anecdotes that mesh metaphorically with the intricate complexities inherent in the underlying framework that makes the blockchain run. Presenting blockchain technology as one of the most innovative and promising technological advances in recent memory, Malekan seeks to demystify the subject by making it relatable, accessible, and plainly understandable.

The author starts with the origins of the blockchain and explains why—and how—it was created in the beginning. The book progresses by explaining how it’s being used today, and how it has a good chance of eventually impacting everything about the way our technological world works. Each chapter covers a particular aspect, but the book flows together well and presents an easy-to-follow narrative that will leave the reader with both a greater innate understanding of this revolutionary technology and the necessary knowledge—and likely motivation—to get involved in it firsthand.

#18. The Blockchain Revolution: How Cryptocurrency Is Shaping The New Digital Economy by Branden M. Griffith

This book, while not focused solely on investing or trading in Bitcoin and other cryptocurrencies, culminates with information many interested in the subject may be looking for, while also providing a solid basis in the technologies that underlie the cryptocurrency revolution and make these new monetary platforms possible. He doesn’t focus solely on Bitcoin, but delves into other cryptocurrencies like Litecoin, Ethereum, and the Neo platform.

Griffith presents blockchain technology as something that is still widely underrated in terms of its value to investors and compares it to earlier technologies that didn’t see widespread use or engagement until they were clearly game-changers in their specific niches. Intended to be a comprehensive guide to understanding blockchain and its impact on the future of the economy, the book does a good job of covering blockchain’s historical development and places some bets on where the future of the technology is likely to lead and provides a solid grounding necessary for anyone considering getting more involved with cryptocurrency.

#19. Cryptocurrency FOMO: How to get into Bitcoin without really caring what Bitcoin is by Derek Parnett

Intended for people interested in delving into Bitcoin, but who may not want or need to understand the intricacies of the blockchain and the importance and promise of the technology that makes cryptocurrencies possible, this book is written for those who want to quickly—but as safely as possible—dive into Bitcoin. It’s geared toward an audience that doesn’t particularly care about the technological framework behind the most revolutionary new type of currency to perhaps ever exist, but who sees its value and its potential for widespread use and potential profitability.

Parnett covers the basic facts needed before purchasing Bitcoin, the various processes involved in actually acquiring the cryptocurrency—including a step-by-step guide on how to set up and fund accounts on Bitcoin exchanges—and even goes into the steps necessary to purchase other alternative cryptocurrencies.

#20: The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order by Paul Vigna and Michael J. Casey

Journalists who cover Wall Street and the global economy, Vigna and Casey take an in-depth look at Bitcoin, its relevance, its history, and its likely international impact. Taking the stance that Bitcoin and other “cybermoney,” as they refer to cryptocurrency, is poised to revolutionize traditional financial and social norms, they make a strong case as to its relevance to everyone—not just the techno-elite. They go into one of perhaps the most overlooked aspects of cryptocurrency: it’s ability to provide access to the global economy to millions of currently “unbanked” people the world over.

It’s not all wine and roses, in their view—Bitcoin has in the past suffered wild fluctuations, marked instability, and has been tied to money laundering and the international drug trade. Though those days may largely be behind the cryptocurrency, it still promises to be a disruptive technology, with the potential to eliminate thousands of jobs as well as, as Vigna and Casey state, alter the relevancy and the function of governments worldwide.

#21: Cryptoconomy: Bitcoins, Blockchains & Bad Guys by Gary Miliefsky

Miliefsky looks into the dark side of Bitcoin and some of the scams, thefts, and other criminal activities tied to the innovative cryptocurrency in this title. Making the compelling argument that would-be investors need to educate themselves on the various complexities of the “crypto-economy” before diving in with the intent to invest, Miliefsky details the various risks involved in a clear and engaging manner.

Miliefsky examines the Foreign Exchange (or FOREX) and its relation to cryptocurrency trading, and details some of the shadier developments in Bitcoin’s recent history, including its growing currency of choice among hackers and ransomware developers who demand payment in the tens of thousands of dollars—via Bitcoin—in order to undo damage or restore data to its rightful owners—or who, in some cases, have managed to steal hundreds of thousands of dollars of Bitcoin from improperly secured digital exchanges.

#22: Bitcoin Pandemonium: The Ongoing Economic, Public, and Legal Debate over the Nature and Impact of Bitcoin by Nicolas L. Wenker

Wenker examines the complexities of a global currency like Bitcoin that—by its very nature—is decentralized and lacks clear regulatory control. While many point to that decentralized, democratized aspect of the cryptocurrency as one of its greatest strengths, Wenker points out that world governments are keen to control its trade and use, and are continuously seeking ways to implement controls on the otherwise anarchically traded cryptocurrency.

Wenker has done his homework. The book references hundreds of sources, from research reports to legal cases, and presents a complex panoramic view of Bitcoin and its impact thus far on global commerce. Covering not only the economic effect, but also the implications for technological changes and its likely impact on the way business will be done in the future, Wenker explores the almost frantic pace at which various international governments have (perhaps too late) attempted to limit or contain the use and influence of Bitcoin and other cryptocurrencies.

#23: Blockchain Basics Explained: The Definitive Beginner’s Guide to Blockchain Technology and Cryptocurrencies, Smart Contracts, Wallets, Mining, ICO, Bitcoin, Ethereum, Litecoin and Ripple by Tom Wolfe

Wolfe presents a picture of blockchain technology as the most significant technological innovation since the advent of the internet and makes the compelling case that it will soon become ubiquitous and global in its impact and influence. Forwarding well-developed claims that blockchain technology will change the way governments, banking institutions, the health industry, and business organizations operate and interact on a day-to-day basis, Wolfe paints blockchain as a multi-purpose tool with the ability to impact the lives of everyone on the planet.

#24: The Bitcoin Manifesto Paperback by Allan J Stevo

Presented as a “call to action,” this title aims to present a serious dialog about the future of Bitcoin, its strengths and weaknesses. The book also looks to dispel what maybe myths or outright lies about the nature and impact of the Cryptocurrency.

Stevo is a founding member of the New York Bitcoin Center and has the credentials to back up his claims. He may well be one of the most knowledgeable sources on the subject, and the picture he paints of Bitcoin and its potential as a revolutionary way to do business is both balanced and reasonable.

#25: The Blockchain Code: Decrypt the Jungle of Complexity to Win the Crypto-Anarchy Game by Dave Kinsey

Kinsey writes about the history of the blockchain, how the technology works and some of the uses it can be put to, as well as going into the background of the group that created it—and their motivations. Written so that a non-technical audience can quickly grasp the concepts discussed, this book goes into some of the finer points of blockchain technology and its potential to be a disruptive and revolutionary tool and presents readers with information intended to help them form their own conclusions about the likely impact of this new and exciting technology.

We hope that you find these books to be informative as you begin your journey to mastering the blockchain. If you have any more questions, Be sure to connect with us on our Telegram Community Channel today.

 

Also, be sure to check out our other articles pertaining to cryptocurrency, bitcoin and blockchain technology below:

“Blockchain: What It Is and How It Works”; which delves into the history of blockchain, how blockchain works, how cryptocurrency uses blockchain, discusses anonymity, various types of blockchains and the different uses.

“How To Store Cryptocurrency / Safeguard Your Crypto Assets”; which discusses the most popular cryptocurrencies, how to protect your crypto, online wallets, offline storage, specialty hardware, crypto exchanges, and even gives Crypto Beadles Personally Recommendation with storing cryptocurrencies.

“Scrubbing Currency: A Comparison of Crypto to Fiat for Known Money Launderings”; This article dives into the various efforts to curb money laundering, typical money laundering with fiat currency problems faced by authorities worldwide, the rise of cryptocurrency, the differences between traditional fiat and cryptocurrencies, the history of traditional banking and it’s many failures.

Blockchain: What It Is and How It Works

Blockchain: What It Is and How It Works

Blockchain: What It Is and How It Works

You have probably by now heard the term “blockchain,” either in reference to a cryptocurrency like Bitcoin or in relation to emerging technologies that somehow use the blockchain in one way or another. If you’re like most people, you don’t really know what all that means; “the blockchain” is an abstract idea that doesn’t immediately lend itself to concrete definitions.

Without blockchain, digital currencies wouldn’t exist. Blockchain technology has been applied in surprising, innovative ways around the world, and understanding what it is and how it’s used is likely to come in handy, especially if you plan on using or possibly investing in various cryptocurrencies or blockchain start-ups. Even if you have an understanding of blockchain technology, make sure to read through this article as you might learn a couple of things you didn’t already know, as this ground-breaking and novel application of computational concepts promises to continue to lend itself to new applications.

The History of Blockchain

It would be helpful to understand the history of the blockchain and its first theoretical beginnings as a computer science concept that was intended for use primarily with cryptography and encoded data. In the very beginning, one of the early forms of blockchain was something called the hash tree, or Merkle Tree, after its creator Ralph Merkle, who patented the concept back in 1979.

The function of the hash tree was to verify the validity and integrity of data as it was transferred back and forth between computer systems. In some of the earliest examples of peer-to-peer networks, making sure that data being handled by more than one physical machine remained intact—unaltered and uncorrupted—was very important.

Without being able to ascertain the structural validity of networked data, the power of peer-to-peer networking, and the ability to use multiple machines to handle and analyze extensive collections of data would have been out of reach. To ensure that data wasn’t being corrupted as it “changed hands” in the computer network was critically important, and that was the function of the hash tree: to prove and protect the integrity of data shared between numerous physical devices.

Merkle and other computer scientists continued work on the hash tree concept, and in the early ’90s, using hash tree technology, Stuart Haber and W. Scott Stornetta explored the idea of “secure chains of blocks” as a method of creating persistent document timestamps—a series of records made up of data that were interconnected.

Each record would rely on the one before it for proof of validity. The newest “block” of data in the chain would contain the history of the entire chain that had preceded it—and this was the very first working blockchain. It would be impossible for data in a blockchain to become corrupt—or to be altered or faked—since it could be checked by comparing its digital signature to each block that had come before.

Fast forward to 2008. A mysterious person—or group of people—using the name Satoshi Nakamoto first developed the concept of a distributed blockchain. This distributed blockchain would contain a secure and unchangeable history of every exchange of data that the blockchain was used for, and would rely on a decentralized, peer-to-peer network of computers to timestamp and verify each transaction. The distributed blockchain could be managed autonomously, without relying on any one central authority for validity.

This distributed blockchain became the central critical feature of Bitcoin; without the blockchain, Bitcoin could not be accurately accounted for. Not only was Nakamoto’s distributed blockchain central to the creation and use of Bitcoin, but critical to the implementation and use of all cryptocurrencies. This is the modern Bitcoin blockchain as we know it today.

How Does Blockchain Work?

It’s important to keep a few main concepts in mind when trying to understand how the blockchain functions. First, know that the blockchain holds a record of all data exchanges, referred to as a “ledger” in cryptocurrency circles. The ledger is made up of each data exchange, or transaction. Once a transaction has been verified and validated against the existing ledger, it is added to the ledger as a new block.

The blockchain is, in other words, a continually evolving record, or ledger, of exchanges—transactions—made up of separate entries, or blocks.

The blockchain relies on a distributed system of computing devices to maintain this record and to verify each transaction. When a device “taps into” the blockchain for any reason, it must first download the most recent section of the blockchain and compare it to already existing examples of the same blockchain on other computers via peer-to-peer networking. This way, each node that has access to the blockchain can verify each transaction by comparing it to the copy of the blockchain record that it had, in turn, previously received from another node.

Once a new transaction is compared to the blockchain and verified, it is “signed,” or committed to the record of transactions, and is added to the existing blockchain as a new block. As such, it can never be altered; any such attempt would result in a version of a blockchain which would be rejected as corrupt when compared to the data already contained in previous blockchain transactions. The ledger, in other words, cannot be fooled, as numerous copies of it exist and are being simultaneously created on many other networked devices.

How Does Cryptocurrency Use Blockchain?

So how does this peer-to-peer, distributed network know whom to trust with copies of the blockchain? This occurs through the use of “keys.” A key is a cryptographic device—essentially a code—which determines a unique identity for whoever uses the key. There are, in fact, a pair of keys—a public key and a private key that, when combined, create a unique digital signature. The public key is the identifying structure in blockchain transactions—it’s how other nodes on the peer-to-peer network identify you, and through this process of identifications know which bits of the blockchain you already hold and which (new) parts may need to be sent to you to keep the integrity of the blockchain intact.

Identical copies of the blockchain thus exist on every single node that accesses it at one time or another. If one device is disconnected from the blockchain for any period of time, all of the other connected devices keep adding transactions to the ledger and maintain the integrity of the blockchain. When a device reconnects, it receives new pieces of the blockchain in order to keep its individual copy of it correct and up-to-date.

For the purposes of sending and receiving cryptocurrency, your public key represents the address of your wallet—the place which holds the record of how many Bitcoin (or other cryptocurrencies) you currently have, and the address where transfers originate from or are sent to. These transfers are made possible by the other key that makes up the pair—the private key. This private key allows you to digitally sign and therefore authorize various actions, like sending cryptocurrency to another public key (or wallet) address.

It’s important to note that an individual’s private key should be seen as a valuable asset worth protecting and keeping secret. If anyone else were to somehow gain access to your private key, they would be able to access any of the digital assets (in the form of cryptocurrency) associated with the private key, and it would allow them to send those assets to any other wallet.

Putting the Pieces Together

Let’s look at a hypothetical transaction on the blockchain. Suppose Ralph is sending Satoshi one Bitcoin. Ralph would use a software interface (of which there are many) to specify Satoshi’s public key—or wallet address—and the amount of Bitcoin being sent. Ralph would then “sign” the transaction by validating it with the combination of his private key and public key.

In effect, Ralph would be declaring to the blockchain network a statement like “I, Ralph, as identified by my private key, am sending one Bitcoin from my wallet, as identified by my public key, to Satoshi, whose wallet is identified by his public key.”

The digital version of that statement—Ralph sends one Bitcoin to Satoshi—would be time-stamped with the exact time of transmission, and assigned a unique identification number. This is what makes up a transaction. That transaction would be broadcast to every node on the peer-to-peer network using that blockchain, which would make a note of it, add it to the ledger, and forever record it in the ever-changing blockchain data.

Every transaction that uses the blockchain contains all of the above: a unique ID, a timestamp, a destination as represented by a public key, and a unique signature that was generated by combining the public key of the wallet sending the transaction with the private key that designated the owner of that wallet.

Furthermore, every transaction is connected—chained—to the transactions that come before it. Anyone who knew the public key address of either Ralph or Satoshi could search through the blockchain for it, and see that one Bitcoin transaction at any point in the future.

So, Is It Truly Anonymous?

A lot has been made of the “anonymous” nature of blockchain trading. The idea of anonymity comes from the fact that your public key is a random sequence of alphanumeric characters—so the blockchain doesn’t record “Ralph” and “Satoshi,” but rather addresses like “35hyUziNW5eFj2GYNpA9gf4GJrPDrrgNQL” (which is a real Bitcoin public key wallet address). You can see how the idea of anonymity springs from this—it would be hard to identify an individual based on a string of letters or numbers like that.

The idea of a ” Pseudonymous,” or tracked blockchain, comes from the fact that every transaction is recorded in the entirety of the blockchain and can be examined by anyone. In other words, it is publicly available information. Moreover, it’s challenging to acquire cryptocurrency without providing some proof of identity these days, so in theory, every transaction can be traced back to an origin where fiat currency of one kind of another was exchanged for crypto. Though, in theory, every transaction on the blockchain is anonymous, regulations put in place by exchanges and other sources for acquiring cryptocurrency make that anonymity questionable at best.

Is Blockchain the future? Different Types of Blockchains for Different Uses

Lastly, let’s look at the different types of blockchains. There are three main types: public, private, and federated. The public blockchain is the type we’ve been discussing so far; it’s the blockchain that runs the Bitcoin network, among other things. No single entity is in charge of this blockchain. It’s decentralized, and anyone can read, write to, or audit the blockchain.

Private blockchains are run by individuals or organizations. With these types of blockchains, a central authority must grant permission to those who wish to read, write, or audit; access is selective and determined on a case-by-case basis. These types of blockchains are used when the cryptographic security of a blockchain scheme is desired, but the transactions or data stored in the blockchain are not subject to public scrutiny, which may be useful for a private organization or corporation.

Lastly, there’s the federated—also called consortium—blockchain. These are similar to private blockchains, but there is more than one central authority that can grant permissions. These involve a group of organizations or individuals who collaborate to make decisions on what kind of transactions are allowed to be created on the blockchain, and by whom. This type of blockchain would theoretically be useful for something like a collection of financial institutions who want to set specific guidelines regarding the validity or verification of each transaction as it gets added to the ledger. In this way, each transaction would have to be approved by a set number of federation members before being added to the blockchain.

These three types of blockchains lend themselves to different applications—public, private, and on a larger corporate or organizational level. Moreover, these blockchains are being used in increasingly inventive ways—not just to track the flow of cryptocurrency, but in applications like “smart contracts,” which don’t require any third-party to monitor or legalize the contract.

The application of blockchain data is useful for countless things, most notably secure and incorruptible data backup, the protection of intellectual property rights, medical records stored as data in blockchain format, the inventory and tracking of prescription drugs, encrypted messaging, and decentralization of many kinds—from stock markets to social networks.

The blockchain, though not a new idea, is a computing concept with a limitless number of possible applications and represents nothing short of a revolution in data storage, retrieval, and security. It’s a technology that will continue to see increased use and application, both in public, private, and federated forms, across a wide array of industries and services. It is the future—and the future is now.


Be sure to check out our other articles & videos on our website!  

Looking for the best cryptocurrency wallet to easily store your cryptos, track your portfolio, or stay up to date with the market and news?  Make sure you check out the Monarch Wallet here: https://monarchwallet.com/.  You can download on iOS or Android, Windows or Mac Os.

How To Store Cryptocurrency / Safeguard Your Crypto Assets

How To Store Cryptocurrency / Safeguard Your Crypto Assets

How To Store Cryptocurrency / Safeguard Your Crypto Assets

A few years ago, everyone was scratching their heads over the question: what on earth is a cryptocurrency? For some people, it looked like nothing but a fad, while others were hailing it as the future of finance and the end of many current monetary institutions. Right now it’s still hard to tell where cryptocurrency will be in a decade, but it seems it will be here to stay in some capacity. Not to mention, the technology that the advent of cryptocurrency has brought us, blockchain technology, has already begun to see use in other industries.

So now that we’ve accepted cryptocurrency as a part of our world, we’ve progressed to an even trickier dilemma for pondering: how to store your crypto safely.

Cryptocurrency presents a significant departure from traditional money and credit systems. Even for those early to the scene, there’s still some uncertainty about the storage and exchange of cryptocurrency. We’re seeing many different storage methods emerge, but none has emerged as the clear winner in terms of convenience and security. Read on to learn more.

The main cryptocurrencies

Before we dive into the options for storing cryptocurrency, let’s run down the basics of what it is. Cryptocurrency is a digital form of decentralized currency that relies on encryption methods to regulate its quantities and availability. While most everyone has heard of bitcoin, it’s not the only kind of cryptocurrency out there. In fact, there are well over a thousand crypto options right now.

Comparatively, the United Nations recognizes fewer than 200 kinds of traditional currency. If you’re new to the crypto game, then you’ll likely be dealing with one of the following well-known cryptocurrencies:

  • Bitcoin
  • Ethereum
  • ERC-20 tokens

Each currency presents its own unique challenges or advantages and operates at different exchange rates. It’s all a lot to take in. On top of it all, you have to worry about how you’ll be storing your cryptocurrency. Moreover, it’s, unfortunately, a bit more complicated than filling out a deposit slip at your preferred bank. Safely storing cryptocurrency is younger than most middle schoolers, and there’s not much public trust in the system yet, so you’ll want to tread carefully.

How to protect your crypto

So how do you go about storing cryptocurrency? You can’t just waltz into your local credit union and ask them to watch out for your bitcoins. There are a lot of different storage methods for cryptocurrency, and as a society, we’re still in the process of sorting out which practices are sustainable, practical, and safe. Here are the four basic methods to secure your crypto.

  1. Online wallet a.k.a. (Hot Wallet)
  2. Offline methods a.k.a. (Cold Wallet) – (PC/Mobile, removable hard drive, paper)
  3. Specialty hardware
  4. Exchange

No method is perfect, or we’d be able to answer the initial storage question with one sentence. Instead, what we have is a list of options, each with advantages and disadvantages. Let’s break them down one at a time.

Online wallets

Storing your cryptocurrency online in any capacity is inherently risky. The online component is what puts it at a severe security risk. However, there are benefits to an online wallet that offline methods can’t provide. These benefits include:

  • Easy, convenient access
  • Two-factor authentication
  • High-level technical knowledge is not usually required
  • Easy to navigate and manage crypto
  • Passwords can be reset

However, online storage has some potentially serious drawbacks, as well. Maintaining an online wallet means trusting your currency to a third party — and you ultimately have little or no control over how that third party operates. There is little to nothing stopping them from packing up shop and leaving you without a storage method anymore.

There is also little to no regulation surrounding online cryptocurrency wallets. So if something does go awry, you as a customer will be left with few resources to help you regain lost funds or seek compensation.

Offline storage

The easy solution to the risks of online wallets is to store your cryptocurrency offline. There are three basic options here: removable storage devices, non-removable storage devices, or good old-fashioned paper.

  • Removable storage

Removable hard drives or USB sticks can be a safe way to store cryptocurrency. Depending on your situation, the transferring of so much data can be a hassle, but the storage device can be safely placed in a bank box or other secure location.

The other downside is the cumbersome process of transferring or using the currency. Different currencies may be easier or more challenging to put on a storage device.

  • Non-removable storage

You can also achieve much the same effect by storing your crypto locally on your PC, laptop or mobile device in a Decentralized Wallet. Of course, this will be less secure if your computer then remains connected to the internet. While less likely than a hack against exchange or online wallet, someone could still break into your cryptocurrency stores if you choose to keep your currency on an internal hard drive which remains connected to the internet. However, if you have a Decentralized Wallet installed on a Mobile device with the SIM card removed and only enable WiFi when you want to send/receive, then you increase your security drastically.

  • Paper

Another generally safe way to store cryptocurrency is with a printout of the private and public keys to your crypto. This is also the most arduous way of storing cryptocurrency. The major downside to paper storage is that you will need to rely on third party software to create the printable code. Not to mention, if someone sees your printout, you would be in serious trouble, as only the private key would be necessary for theft.

Specialty hardware

Here’s what used to be the crown jewel of cryptocurrency storage. Specialty crypto wallets can be purchased to store your crypto assets. Specialty hardware is more convenient than removable storage devices or paper, and it offers even more protection. For example, a poorly timed fall with a glass of water could put your paper-stored crypto at risk, but specialty hardware is a little more durable, much more convenient, and usually just as secure. These devices will come with built-in encryption and maybe one of the most reliable options out there.

On the flip side, specialty hardware comes with quite a price tag. If you’re not prepared for a significant upfront investment, then this may not be the right option for you. Companies or people dealing with large quantities of cryptocurrency may benefit from specialty hardware. However, for those who are just testing the waters, it may not be worth the money. Specialty hardware is also not available worldwide, and sometimes further backups are required for the sake of redundancy options.

Exchanges

Exchanges can seem like a desirable option to those looking to safely store their cryptocurrency, as they provide a fast and easy way to transfer crypto. This convenience draws in many users. If you’re looking to convert fiat money into cryptocurrency or trade between types of cryptocurrencies, exchanges are built for that very purpose. There are other advantages to exchanges, as well:

  • No lost access due to forgotten passwords or seeds
  • Ability to store multiple types of cryptocurrency
  • Two-factor authentication
  • Easy to set up, with little tech knowledge required
  • Many accessible altcoins.
  • Low transfer fees

However, even with these numerous benefits, exchanges have proven to be untrustworthy in the past. There have been multiple scandals across the globe, usually centering on cryptocurrency being stolen or otherwise disappearing, often from within the exchange itself. If a chain of banks had a history of customers losing their life savings to corrupt bank employees, you’d probably think twice before trusting them with your money. Moreover, it can be the same situation here.

Just last year, the cryptocurrency exchange Coinsecure, based in India, lost 3.5 million dollars worth of cryptocurrency. The exchange blamed the missing money on their chief security officer, accusing Amitabh Saxena of running off with the money. Whether this is true or not is uncorroborated, but it does not bode well for the exchange system that a CSO could conceivably abscond with so much money. Coinsecure will have to reimburse customers from their own funds, a promise that can still be very discomforting. After all, if a company is unable to pay people back for stolen money, there are few other resources at customers’ disposal.

As startling as the Coinsecure case was, it’s far from the most substantial amount of cryptocurrency to go missing. In January of 2018, a Japanese cryptocurrency exchange lost over 500 million dollars in cryptocurrency to a hack. The company was holding the currency in something known as “hot” storage, where the crypto is stored using an online system. This may have contributed to the ease with which the money was stolen, and many other exchanges use “cold” or offline storage. Even exchanges usually place some funds into cold storage for security reasons, but in order to provide the easy transfers, hot storage is necessary.

Moreover, it would be remiss not to mention Mt. Gox, which, despite being the most successful and well-established Bitcoin exchange, ultimately had to declare bankruptcy following the realization that close to a million Bitcoins had gone missing over a period of time. The next news cycle was not kind to cryptocurrency at large and further scared many people away from the topic. The missing Bitcoins were worth approximately half a billion dollars in 2014 when the news broke. Half a decade later, the man at the center of the embezzlement allegations is primed to receive a verdict from a Tokyo court.

Cryptocurrency is often regarded with some suspicion by the world at large. Many law enforcement officials see it as the currency of internet criminals, and we are far from a world where cryptocurrency is largely used and accepted. This mistrust can lead to situations where governments regard crypto with less care than they may otherwise treat consumer property.

Do you remember when Alexander Vinnik was accused of laundering money through the cryptocurrency exchange BTC-E? Well, during that whole fiasco, the FBI seized the entire site, effectively preventing people from accessing their money. Because your money is considered “part of the exchange,” you are vulnerable to these kinds of instances, regardless of whether or not you are involved in the criminal activity.

Exchanges are a great option in theory, but they have not proven to be a reliable means of crypto storage yet. Perhaps in the future, we’ll see an exchange option that is proven to be safe, effective, and easy to use. Until then, however, it is wisest for most people to avoid exchanges and instead opt for different storage methods.

Make an informed decision

There are many ways to store cryptocurrency, just as there are many different banks and credit unions for your traditional money. Ultimately it is up to each person to decide how and where to store their savings. Nothing is perfect, and there can never be any guarantee that you will be exempt from potential losses with any kind of currency. The world is a fast-paced and ever-changing place, where nothing can be completely assured. So at the end of the day, the decision of how to store and protect your assets is up to you.

Hopefully, this information will help you make an informed decision about your digital assets & cryptocurrency. Also, don’t forget to take into account your circumstances. How much crypto you deal with and how essential it is to your life or business matters a lot in which method of storage or exchange you choose. The only way to truly protect yourself is to know your options and make the decision that’s best for you.

CryptoBeadles Recommendation

Robert Beadles is an avid cryptocurrency believer, and this subject is near and dear to his heart as he has watched as many people have made mistakes over the years, and some have suffered much because of their decisions. Robert recommends most people who want to safely store their cryptocurrency to download the Monarch Wallet on a mobile device that doesn’t have a SIM card, which you can connect to the internet via WiFi when you want to make transfers. The mobile device should have the built-in Phone software six digit Pin, the Pin from the Wallet, as well as you can control what software is installed on the device, as well as when the device connects to the internet helping to ensure the maximum amount of security for your cryptocurrencies.

Over $40 Million Stolen In Latest Binance Bitcoin Hack

Over $40 Million Stolen In Latest Binance Bitcoin Hack

Over $40 Million Stolen In Latest Binance Bitcoin Hack

Hackers stole over $40 million of Bitcoin from Binance, one of the world’s largest cryptocurrency exchanges, the company said on Tuesday.

According to the company, the hackers ran off with over 7,000 bitcoin and used a variety of attack methods to carry out the “large scale security breach”. The hackers also managed to take other user information including two-factor authentication codes, which are a pre-requisite to log into most Binance Accounts.

The cryptocurrency exchange, however, was able to trace the stolen bitcoin to a single wallet. “The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time,” Binance said in a statement.

“The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.”

Binance said the theft occurred from the company’s “hot wallet,” which accounts for around 2% of its total bitcoin holdings. A wallet is a digital means of storing cryptocurrency. A “hot wallet” is one that is connected to the internet as opposed to a “cold” one which stores digital coins offline. Deposits and withdrawals on Binance’s platform will remain suspended but trading will be allowed.

Binance also warned that “hackers may still control certain user accounts and may use those to influence prices.” However, the company said that it will cover the incident “in full” and no users’ funds will be affected. The hack comes after a recent rally in bitcoin. The price of the digital coin is about 9% higher over the past week.

Monarch Blockchain Corporation’s Solution:

Hacks like these are one of the reasons to argue for users to maintain ownership of their cryptocurrency and not some centralized business or organization.  

You may have heard “Not Your Key’s, Not Your Crypto”, and it ever rings true here.  With most centralized exchanges, the exchange typically owns users keys and seed.  This means they own the users crypto while they use their services.

However, with the Monarch Wallet, users own their keys & seed.  While supporting over 1900+ cryptocurrencies and ensuring users own their cryptocurrency, the Monarch Wallet also features an ERC20 Token to ERC20 Token Decentralized exchange that allows most ERC20 Tokens to be swapped in a decentralized manner.  

What this means for users is by using the Decentralized exchange, their cryptocurrency isn’t put into a centralized exchange’s “hot wallet”, where it could be stolen.  Instead, the funds are traded through a smart contract exchange from person to person, or peer to peer, where the funds only leave each individual’s wallet when the contract is filled by another person.  The funds are then traded from one user’s wallet to another user’s wallet. This ensures the maximum amount of protection for both parties.

“It’s becoming more evident and important as the cryptocurrency market industry continues to grow, companies should be looking at solutions that give hackers the least amount of avenues to attack and steal from others.” – Robert Beadles, Founder of Crypto Beadles, President of Monarch, Creator Of  The Monarch Wallet.

Maintaining Decentralized services, where able, is one of the things Monarch Blockchain Corporation believes is extremely important and aids in limiting avenues for bad actors to utilize.

To learn more about Monarch, their Universal Crypto Wallet and connect with their growing cryptocurrency community, be sure to visit their website Here.

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