Tiana Laurence

Cheat Sheet / Updated 10-16-2024

Get to know the basics of blockchain! Find out how blockchains and smart contracts work, what cryptocurrency is, and how to keep your cryptocurrency safe and secure.

Article / Updated 07-24-2023

Originally, blockchain was just the computer science term for how to structure and share data. Today, blockchains are hailed the "fifth evolution" of computing. Blockchains are a novel approach to the distributed database. The innovation comes from incorporating old technology in new ways. You can think of blockchains as distributed databases that a group of individuals controls and that store and share information. There are many different types of blockchains and blockchain applications. Blockchain is an all-encompassing technology that is integrating across platforms and hardware all over the world. A blockchain is a data structure that makes it possible to create a digital ledger of data and share it among a network of independent parties. There are many different types of blockchains. Public blockchains: Public blockchains, such as Bitcoin, are large distributed networks that are run through a native token. They're open for anyone to participate at any level and have open-source code that their community maintains. Permissioned blockchains: Permissioned blockchains, such as Ripple, control roles that individuals can play within the network. They're still large and distributed systems that use a native token. Their core code may or may not be open source. Private blockchains: Private blockchains tend to be smaller and do not utilize a token. Their membership is closely controlled. These types of blockchains are favored by consortiums that have trusted members and trade confidential information. All three types of blockchains use cryptography to allow each participant on any given network to manage the ledger in a secure way without the need for a central authority to enforce the rules. The removal of central authority from database structure is one of the most important and powerful aspects of blockchains. The figure shows the concept of how blockchains come to agreement. Blockchains create permanent records and histories of transactions, but nothing is really permanent. The permanence of the record is based on the permanence of the network. In the context of blockchains, this means that a large portion of a blockchain community would all have to agree to change the information and are incentivized not to change the data. When data is recorded in a blockchain, it's extremely difficult to change or remove it. When someone wants to add a record to a blockchain, also called a transaction or an entry, users in the network who have validation control verify the proposed transaction. This is where things get tricky because every blockchain has a slightly different spin on how this should work and who can validate a transaction.

Cheat Sheet / Updated 12-08-2021

Cryptocurrency All-in-One For Dummies provides helpful advice for navigating the blockchain world and cryptocurrencies that run them — from the ins and outs of wallets, exchanges, Bitcoin, and Ethereum to investing in cryptocurrencies and even mining your own. Here, we give you bonus content that we couldn’t fit in the book. Explore crypto’s basic components, real-world-use cases for blockchain, what to consider before investing in cryptos, important reminders to keep you safe on the blockchain, how to determine which crypto is profitable to mine, and several resources to help you learn even more about the wide world of cryptocurrencies.

Cheat Sheet / Updated 11-11-2021

A non-fungible (meaning unique, non-replaceable) token (NFT) is a unique digital code that represents some kind of digital item. It could be digital art or music, for example. An NFT is secured and stored on a public blockchain. One token is not interchangeable for another, and a token cannot be further divided. There are many different types of non-fungible tokens, and they can be created on well-known blockchains like Bitcoin and Ethereum.

Article / Updated 07-06-2021

A paper wallet is a paper copy of your public and private key for your Bitcoins. Because they're completely offline, paper wallets are one of the most secure ways to hold Bitcoins when done correctly. The advantage is that your private key is not stored digitally, so it isn't subject to hacking. Making a paper wallet is fairly easy. Just follow these steps: Go to bitaddress.org. Move your mouse around the screen until the amount of randomness shows 100%. Click the Paper Wallet button. This gives the option to create a paper wallet that you can print. In the Addresses to Generate field, enter 1. You can make several wallets at once, if you need to, but you might as well just start with one to get the hang of it. Click the Generate button. The figure shows a paper wallet. Click the Print button. Do not let anyone watch you create your paper wallet. This isn't something you want to do at a public computer. Make sure to use a printer that is private and not connected to the Internet so you're not at risk of your private keys being hacked. Laminate your paper wallet to make it a little more durable.

Article / Updated 07-01-2020

Hundreds of blockchains and blockchain applications are in existence today. The whole world has become obsessed with the ideas of moving money faster, incorporating and governing in a distributed network, and building secure applications and hardware. You can see many of these public blockchains by going to a cryptocurrency exchange. The figure shows the altcoin exchange for Poloniex, a cryptocurrency trading platform. Blockchains are moving beyond the trading value market and are being incorporated into all sorts of industries. Blockchains add a new trust layer that now makes working online secure in a way that was not possible beforehand. Current blockchain uses Most up-and-running blockchain applications revolve around moving money or other forms of value quickly and cheaply. This includes trading public company stock, paying employees in other countries, and exchanging one currency for another. Blockchains are also now being used as part of a software security stack. The U.S. Department of Homeland Security has been investigating blockchain software that secures Internet of Things (IoT) devices. The IoT world has some of the most to gain from this innovation, because it's especially vulnerable to spoofing and other forms of hacking. IoT devices have also become more pervasive, and security has become more reliant on them. Hospital systems, self-driving cars, and safety systems are prime examples. DAOs are another interesting blockchain innovation. This type of blockchain application represents a new way to organize and incorporate companies online. DAOs have been used to organize and invest funds via the Ethereum network. Future blockchain applications Larger and longer-run blockchain projects that are being explored now include government-backed land record systems, identity, and international travel security applications. The possibilities of a blockchain-infused future have excited the imaginations of business people, governments, political groups, and humanitarians across the world. Countries such as the UK, Singapore, and the United Arab Emirates see it as a way to cut cost, create new financial instruments, and keep clean records. They have active investments and initiatives exploring blockchain. Blockchains have laid a foundation where the need for trust has been taken out of the equation. Where before asking for "trust" was a big deal, with blockchains it's small. Also, the infrastructure that enforces the rule if that trust is broken can be lighter. Much of society is built on trust and enforcement of rules. The social and economic implications of blockchain applications can be emotionally and politically polarizing because blockchain will change how we structure value-based and socially based transactions.

Article / Updated 08-01-2017

You can get started earning Bitcoins in a variety of ways. Mining for Bitcoin is how to earn Bitcoins by participating in the network. It's usually handled by special mining hardware that is expensive and specialized. The equipment also needs Bitcoin mining software to connect to the blockchain and your mining pool (a collaboration of many miners jointly work together and then splitting the rewards of their efforts). Here are three standard ways to explore mining Bitcoin: Bitcoin-QT: The Bitcoin-QT client is the original software written by Satoshi Nakamoto. CGminer: CGminer is one of the most popular mining software. It is open source and available for Windows, Linux, and OS. Multiminerapp: The Multiminerapp is an easy Bitcoin client to run. Bitcoin is a very competitive environment, and unless you buy specialized mining equipment, you may never earn any Bitcoins. Expect to pay between $500 and $5,000 per machine on average. Amazon.com is a good place to look. They have a large offering and many customer reviews to help guide you. Cloud mining allows you to start earning bitcoins in an industrious afternoon, without the need to download software or buy equipment. Just follow these steps: Go to https://hashflare.io/panel. The return on investment for cloud mining can be negative. Review your option carefully to make sure it is a positive investment. Scroll down the home page and click the Buy Now button under SHA-256 Cloud Mining. Go through the sign-up process. Link your bitcoin address. If you haven't established a bitcoin address, create a bitcoin wallet. You'll need to do this in order to claim your mining rewards. Buy a small amount of mining power. This will allow you to join the bitcoin network. Join a mining pool. This step allows you to get a faster mining reward than mining on your own. It pools the resources of several miners and then shares the prize between the pool. Congratulations! Now just sit back and wait for your mining rewards to start rolling (or dripping) in.

Article / Updated 08-01-2017

Bitcoin and the concept of its blockchain were first introduced in the fall of 2008 as a whitepaper and later released as open-source software in 2009. The author who first introduced Bitcoin in that 2008 whitepaper is an anonymous programmer or cohort working under the name of Satoshi Nakamoto. Nakamoto collaborated with many other open-source developers on Bitcoin until 2010. This individual or group has since stopped its involvement in the project and transferred control to prominent Bitcoin core developers. There have been many claims and theories concerning the identity of Nakamoto, but none of them have been confirmed as of this writing. Regardless, what Nakamoto created is an extraordinary peer-to-peer payment system that enables users to send Bitcoin, the value transfer token, directly and without an intermediary to hold the two parties accountable. The network itself acts as the intermediary by verifying the transactions and assuring that no one tries to cheat the system by spending Bitcoins twice. Nakamoto's goal was to close the large hole in digital trust, and the concept of the blockchain was his answer. It solves the Byzantine general's problem, which is the ultimate human problem, especially online: How do you trust the information you are given and the people who are giving you that information, when self-interest, malicious third parties, and the like can deceive you? Many Bitcoin enthusiasts feel that blockchain technology is the missing piece that will allow societies to operate entirely online because it reframes trust by recording relevant information in a public space that cannot be removed and can always be referenced making deception more difficult. Blockchains mix many old technologies that society has been using for thousands of years in new ways. For example, cryptography and payment are merged to create cryptocurrency. Cryptography is the art of secure communication under the eye of third parties. Payment through a token that represents values is also something humans have been doing for a very long time, but when merged, it creates cryptocurrencies and becomes something entirely new. Cryptocurrency lets you take the concept of money and move it online with the ability to trade value securely through a token. Blockchains also incorporate hashing (transforming data of any size into short, fixed-length values). Hashing also incorporates another old technology called Merkle trees, which take many hashes and squeeze them down to one hash, while still being able to prove each piece of data that was individually hashed. Ultimately, blockchains are ledgers, which society has been using for thousands of years to keep financial accounts. When all these old models are merged and facilitated online in a distributed database, they become revolutionary. Bitcoin was designed primarily to send the Bitcoin cryptocurrency. But very quickly, the creators realized that it had a much larger potential. With that in mind, they architected the blockchain of Bitcoin to be able to record more than the data concerning the movement of the token. The Bitcoin blockchain is the oldest, and one of the largest, blockchains in the world. It's composed of thousands of nodes that are running the Bitcoin protocol. The protocol is creating and securing the blockchain. In very simple terms, the blockchain is a public ledger of all transactions in the Bitcoin network, and the nodes are computers that are recording entries into that ledger. The Bitcoin protocol is the rules that govern this system. Nodes safeguard the network by mining for the cryptocurrency Bitcoin. New Bitcoins are created as a reward for processing transactions and recording them inside the blockchain. Nodes also earn a small fee for confirming transactions. Anyone can run the Bitcoin protocol and mine the token. It's an open-source project that thrives as more individuals participate in the network. The fewer people who participate, the more centralized it becomes — and centralization weakens the system. The primary thing that makes Bitcoin a secure system is the large number of independent nodes that are globally distributed. The most successful miners have robust systems that can outperform slower miners. Early in its history, you could run the Bitcoin protocol and earn Bitcoins on a desktop computer. Now, in order to have any hope of ever receiving Bitcoins, you need to purchase expensive specialized equipment or use a cloud service. In order to create a message in the Bitcoin blockchain, you have to send some Bitcoin from one account to another. When you send a transaction in Bitcoin, the message is broadcast across the whole network. After the message is sent, it's impossible to alter it because the message is recorded inside the Bitcoin blockchain. This feature makes it imperative that you always choose your message wisely and never broadcast sensitive information. Broadcasting the same message to thousands of nodes and then saving it forever in the token's ledger can add up in a hurry. So, Bitcoin requires that you keep your communications very short. The current limit is just 40 characters. Bitcoin is a living and ever-changing system. The Bitcoin core development community is actively seeking ways to improve the system by making it stronger and faster. Anyone can contribute to the Bitcoin protocol by engaging on its GitHub page. However, there is a small community of dominant core developers of Bitcoin. The most prolific contributors are Wladimir Van Der Laan, Pieter Wuille, and Gavin Andresen.

Article / Updated 08-01-2017

The Bitcoin blockchain is one of the largest and most powerful blockchains in the world. It was designed primarily to send Bitcoin, the cryptocurrency. So, naturally, in order to create a message in the Bitcoin blockchain, you must send some Bitcoins from one account to another. When you send Bitcoins from one account to another, a transaction history is recorded in the Bitcoin blockchain. After a transaction has been entered, the information can't be removed — your message will be around as long as Bitcoin is in existence. This concept of permanence is powerful — it's the most important characteristic of any blockchain. A Bitcoin wallet address is composed of 32 unique characters. It allows you to send and receive Bitcoins. Your private key is a secret code associated with your Bitcoin address that lets you prove your ownership of the Bitcoins linked with the address. Anyone with your private key can spend your Bitcoins, so never share it. Your first Bitcoin wallet needs to be linked to a credit card or bank account. I recommend using one of the following Bitcoin wallets: Coinbase Xapo To set up your first wallet, just go to one of these URLs and create an account. It just takes a few minutes. When you have your account open, add a little money to it so you can experiment — $5 is a great starting point. To receive the Bitcoins you'll send, you need to make a second Bitcoin wallet. For this second wallet, don't use a Circle or Coinbase wallet — they don't have the functionality you need for this purpose. The easiest Bitcoin wallet to use for this project is the Blockchain.info wallet. Follow these steps to create it: Go to the Blockchain.info website. Click Wallet. Click Create Your Wallet. Enter an email address and password.

Article / Updated 07-31-2017

Blockchains are now recognized as the "fifth evolution" of computing, the missing trust layer for the Internet. Blockchains can create trust in digital data. When information has been written into a blockchain database, it's nearly impossible to remove or change it. This capability has never existed before. Blockchains are composed of three core parts: Block: A list of transactions recorded into a ledger over a given period. The size, period, and triggering event for blocks is different for every blockchain. Not all blockchains are recording and securing a record of the movement of their cryptocurrency as their primary objective. But all blockchain do record the movement of their cryptocurrency or token. Think of the transaction as simply being the recording of data. Assigning a value to it (such as happens in a financial transaction) is used to interpret what that data means. Chain: A hash that links one block to another, mathematically "chaining" them together. This is one of the most difficult concepts in blockchain to comprehend. It's also the magic that glues blockchains together and allows them to create mathematical trust. The hash in blockchain is created from the data that was in the previous block. The hash is a fingerprint of this data and locks blocks in order and time. Although blockchains are a relatively new innovation, hashing is not. Hashing was invented over 30 years ago. This old innovation is being used because it creates a one-way function that cannot be decrypted. A hashing function creates a mathematical algorithm that maps data of any size to a bit string of a fixed size. A bit string is usually 32 characters long, which then represents the data that was hashed. The Secure Hash Algorithm (SHA) is one of some cryptographic hash functions used in blockchains. SHA-256 is a common algorithm that generates an almost-unique, fixed-size 256-bit (32-byte) hash. For practical purposes, think of a hash as a digital fingerprint of data that is used to lock it in place within the blockchain. Network: The network is composed of "full nodes." Think of them as the computer running an algorithm that is securing the network. Each node contains a complete record of all the transactions that were ever recorded in that blockchain. The nodes are located all over the world and can be operated by anyone. It's difficult, expensive, and time-consuming to operate a full node, so people don't do it for free. They're incentivized to operate a node because they want to earn cryptocurrency. The underlying blockchain algorithm rewards them for their service. The reward is usually a token or cryptocurrency, like Bitcoin. The terms Bitcoin and blockchain are often used interchangeably, but they're not the same. Bitcoin has a blockchain. The Bitcoin blockchain is the underlying protocol that enables the secure transfer of Bitcoin. The term Bitcoin is the name of the cryptocurrency that powers the Bitcoin network. The blockchain is a class of software, and Bitcoin is a specific cryptocurrency.