Cryptocurrency Articles

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 03-20-2024

Bitcoin is an alternative type of payment system that is sometimes mentioned in the media. Is it "Internet" or "digital" money? Is it a way to conduct business outside the mainstream financial infrastructure? Is it a new way of life that could transform multiple aspects of society in the future? The answer is yes. Origins: Bitcoin was created by developer Satoshi Nakamoto in 2008. Purpose: Bitcoin provides a viable decentralized alternative to the current mainstream financial infrastructure. Method: Bitcoin enables spending with full transparency through a publicly available ledger known as the blockchain. Security: A bitcoin transaction involves both a public key, which is generally known to everyone, and a private key known only to the bitcoin user. No coins can be spent without knowing the private key.

Article / Updated 08-03-2023

To meaningfully navigate the world of decentralized finance (DeFi), you first need to set up a Web3 wallet that can submit transactions and access smart contracts on a public blockchain. Because so much of the DeFi ecosystem has been built on Ethereum, this article shows you how to get started with MetaMask, an application that connects you to the Ethereum blockchain. MetaMask is one of the most well-known and widely supported noncustodial crypto wallets connecting you to the Ethereum blockchain. Other popular contenders include WalletConnect and the Coinbase Wallet (not to be confused with the custodial Coinbase.com wallet). Unmasking MetaMask MetaMask is an amazingly simple, yet powerful, application that allows you to manage your Ethereum accounts and to interact with the Ethereum network. With this wallet app, you can create new accounts, import existing accounts, and submit transactions. In addition to handling ether (ETH), the token native to Ethereum, this wallet application is also compatible with ERC-20 fungible tokens and ERC-721 non-fungible tokens (NFTs). MetaMask operates as a browser extension, which makes it easy for you to connect to web-based Ethereum dApps (decentralized applications), the vast majority of which have integrated MetaMask functionality in their websites. More ambitious readers may be glad to discover that Remix — a web-based integrated development environment (IDE) — is integrated with MetaMask to allow you to seamlessly launch smart contracts on Ethereum without having to download additional software or run a full node on your computer. Exercise caution when interacting with dApps, just as you would when engaging with any application coming from an unknown or untrusted source. Installing MetaMask MetaMask currently supports the Chrome, Firefox, Brave, and Edge browsers. I’ve chosen to proceed in Chrome because it’s the most commonly used desktop Internet browser in the U.S. If you’re feeling a bit adventurous and want a full DeFi immersion, I recommend getting comfortable with the Brave browser. Keep in mind that your visual and textual prompts may differ slightly from what’s shown in the following steps, depending on your chosen browser. You can use these steps to download and install the MetaMask browser extension: Go to www.metamask.io and click the Download Now button, as shown in Figure 1. Click the Install MetaMask for Chrome button, as shown in Figure 2. You’re rerouted to the MetaMask page of the Chrome web store, as shown in Figure 3. Of course, if you’re using a different browser, the prompts will look slightly different, as shown in Figure 4. Click the Add to Chrome button.A pop-up window appears, as shown in Figure 5. Click the Add Extension button. After the installation is complete, a pop-up window momentarily appears to inform you that MetaMask has been added to your browser. You should now see a small fox icon in the upper-right corner of your browser window (to the right of the address bar), as shown in Figure 6. If the fox icon doesn’t automatically appear in your browser’s toolbar, follow these additional steps: Click the puzzle-piece-shaped icon in the upper-right corner of your browser window (to the right of the address bar). A drop-down menu appears, as shown in Figure 7. Click the pin icon to the right of the MetaMask fox icon. The pin icon turns blue, and you see the fox icon pinned to your browser’s toolbar. Yay, you’re now ready to set up your MetaMask wallet! Setting up MetaMask After you’ve successfully installed the MetaMask browser extension, you can follow these steps to set up your wallet: Click the MetaMask fox icon in your browser’s toolbar. (In my case, I am continuing to use the Chrome browser.)A new browser window appears, with a Get Started button displayed at the bottom of the page. Click the Get Started button. The page that opens shows an Import Wallet and a Create a Wallet button, as shown in Figure 8. The Import Wallet button on this page is what you’ll use if you ever need to reinstall MetaMask and recover a MetaMask wallet that you’ve already set up. Click the Create a Wallet button. On the Help Us Improve MetaMask page that opens, you can click either the No Thanks or I Agree button, depending on whether you want to share your usage data with the MetaMask development team. The next page opens, prompting you to create a password, as shown in Figure 9. Create and confirm your new password. Click the check box to confirm that you’ve read and agree to the terms of usage, and then click the Create button. A page appears that features instructions and a brief video explaining the importance of your Secret Recovery Phrase. Watch this video and read the instructions carefully. When you’re ready, click the Next button, which takes you to your Secret Recovery Phrase. Click the lock icon to reveal your private 12-word phrase, as shown in Figure 10. Write down this phrase and store it for safe keeping. This Secret Recovery Phrase represents the digital keys that provide access to your crypto wallet and its contents. Do not share this phrase with anyone. Do not skip this critical step! You’ll need your Secret Recovery Phrase if you ever need to reinstall the MetaMask browser extension or if you want to access your MetaMask wallet on a different browser or different computer. In fact, even the MetaMask Support team cannot recover your MetaMask account for you. Specifically, MetaMask’s “Basic Safety and Security Tips” state that: “MetaMask is not a cloud-based solution. If your device breaks, is lost, or has data corruption, there is no way for the MetaMask Support Team to recover this for you. This Secret Recovery Phrase is the only way to recover your MetaMask accounts.” After you’ve secured your Secret Recovery Phrase, click the Next button. The next page requires you to confirm your Secret Recovery Phrase by selecting the correct words in the correct order, as shown in Figure 11. Do not share this unordered word matrix with anyone, as I’ve (foolishly!) done here for demonstrative purposes. Using this word matrix, a hacker can easily create a program to regenerate my Secret Recovery Phrase. In fact, this hypothetical hacker could guess my secret phrase within 12! = 12 x 11 x 10 x …. X 2 x 1 = 479,001,600 attempts, which represents the total number of possible permutations of the words presented in Figure 11. Although 479,001,600 distinct guesses would be quite onerous to attempt manually, a computerized algorithm can glide through this guessing game. After you've clicked each word in the correct order to produce the correct word sequence, click the Confirm button. Congratulations! Your browser takes you to your initial MetaMask Account 1 Page, as shown in Figure 12. Going forward, you can simply access your MetaMask wallet by clicking the MetaMask fox icon in your browser’s toolbar, which reveals a drop-down window, as shown in Figure 13. (Revisit Steps 5 and 6 from the previous “Installing MetaMask” section if you need to re-pin the MetaMask fox icon to your browser’s toolbar.)

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.

Article / Updated 07-24-2023

Simply put, a blockchain is a special kind of database. According to cigionline.org, the term blockchain refers to the whole network of distributed ledger technologies. According to Oxford Dictionaries, a ledger is “a book or other collection of financial accounts of a particular type.” It can be a computer file that records transactions. A ledger is actually the foundation of accounting and is as old as writing and money. Now imagine a whole suite of incorruptible digital ledgers of economic transactions that can be programmed to record and track not only financial transactions but also virtually everything of value. The blockchain can track things like medical records, land titles, and even voting. It’s a shared, distributed, and immutable ledger that records the history of transactions starting with transaction number one. It establishes trust, accountability, and transparency. Blockchain stores information in batches called blocks. These blocks are linked together in a sequential way to form a continuous line. A chain of blocks. A blockchain. Each block is like a page of a ledger or a record book. As you can see in the figure, each block mainly has three elements: Data: The type of data depends on what the blockchain is being used for. In Bitcoin, for example, a block’s data contains the details about the transaction including sender, receiver, number of coins, and so on. Hash: No, I’m not talking about that kind of hash. A hash in blockchain is something like a fingerprint or signature. It identifies a block and all its content, and it’s always unique. Hash of previous block: This piece is precisely what makes a blockchain! Because each block carries the information of the previous block, the chain becomes very secure. Here’s an example of how a bunch of blocks come together in a blockchain. Say you have three blocks. Block 1 contains this stuff: Data: 10 Bitcoins from Fred to Jack Hash (simplified): 12A Previous hash (simplified): 000 Block 2 contains this stuff: Data: 5 Bitcoins from Jack to Mary Hash (simplified): 3B4 Previous hash: 12A Block 3 contains this stuff: Data: 4 Bitcoins from Mary to Sally Hash (simplified): C74 Previous hash: 3B4 As you can see in the following figure, each block has its own hash and a hash of the previous block. So, block 3 points to block 2, and block 2 points to block 1. (Note: The first block is a bit special because it can’t point to a previous block. This block is the genesis block.) The hashes and the data are unique to each block, but they can still be tampered with. The following section lays out some ways blockchains secure themselves. How does a blockchain secure itself? Interfering with a block on the blockchain is almost impossible to do. The first way a blockchain secures itself is by hashing. Tampering with a block within a blockchain causes the hash of the block to change. That change makes the following block, which originally pointed to the first block’s hash, invalid. In fact, changing a single block makes all the following blocks invalid. This setup gives the blockchain a level of security. Using hashing isn’t enough to prevent tampering. That’s because computers these days are super fast, and they can calculate hundreds of thousands of hashes per second. Technically, a hacker can change the hash of a specific block and then calculate and change all the hashes of the following blocks in order to hide the tampering. On top of the hashes, blockchains have additional security steps including things like proof-of-work and peer-to-peer distribution. A proof-of-work (PoW) is a mechanism that slows down the creation of the blocks. In Bitcoin’s case, for example, it takes about ten minutes to calculate the required PoW and add a new block to the chain. This timeline makes tampering with a block super difficult because if you interfere with one block, you need to interfere with all the following blocks. A blockchain like Bitcoin contains hundreds of thousands of blocks, so successfully manipulating it can take over ten years! A third way blockchains secure themselves is by being distributed. Blockchains don’t use a central entity to manage the chain. Instead, they use a peer-to-peer (P2P) network. In public blockchains like Bitcoin, everyone is allowed to join. Each member of the network is called a validator or a node. When someone joins the network, they get the full copy of the blockchain. This way, the node can verify that everything is still in order. Here’s what happens when someone creates a new block in the network: The new block is sent to everyone in the network. Each node then verifies the block and makes sure it hasn’t been tampered with. If everything checks out, each node adds this new block to their own blockchain. All the nodes in this process create a consensus. They agree about which blocks are valid and which ones aren’t. The other nodes in the network reject blocks that are tampered with. So, to successfully mess with a block on a blockchain, you’d need to tamper with all the blocks on the chain, redo the proof-of-work for each block, and take control of the peer-to-peer network! Blockchains are also constantly evolving. One of the most recent developments in the cryptocurrency ecosystem is the addition of something called a smart contract. A smart contract is a digital computer program stored inside a blockchain. It can directly control the transfer of cryptocurrencies or other digital assets based on certain conditions. Why is blockchain revolutionary? Here are three main reasons blockchain is different from other kinds of database and tracking systems already in use. Blockchain may eliminate data tampering because of the way it tracks and stores data If you make a change to the information recorded in one particular block of a blockchain, you don’t rewrite it. Instead the change is stored in a new block. Therefore, you can’t rewrite history — no one can — because that new block shows the change as well as the date and the time of the change. This approach is actually based on a century-old method of the general financial ledger. Suppose that Joe and his cousin Matt have a dispute over who owns the furniture shop they’ve been comanaging for years. Because the blockchain technology uses the ledger method, the ledger should have an entry showing that P.J. first owned the shop in 1947. When P.J. sold the shop to Mary in 1976, they made a new entry in the ledger, and so on. Every change of ownership of this shop is represented by a new entry in the ledger, right up until Matt bought it from his uncle in 2009. By going through the history in the ledger, Matt can show that he is in fact the current owner. Now, here’s how blockchain would approach this dispute differently than the age-old ledger method. The traditional ledger method uses a book, or a database file stored in a single (centralized) system. However, blockchain was designed to be decentralized and distributed across a large network of computers. This decentralizing of information reduces the ability for data tampering. Recent blockchain attacks such as the one on ZenCash show that data tampering can’t be completely eliminated on the blockchain database as is. If 51 percent of miners decide to rewrite the ledger, it would be possible, and as a result, they can do whatever they want with the transaction: they can delay it, double-spend the coins, postpone it, or simply remove it from the block. Several blockchain networks are currently working on a custom solution for this. Blockchain creates trust in the data The unique way blockchain works creates trust in the data. I get more into the specifics earlier in this chapter, but here’s a simplified version to show you why. Before a block can be added to the chain, a few things have to happen: A cryptographic puzzle must be solved to create the new block. The computer that solves the puzzle shares the solution with all the other computers in the network. Finally, all the computers involved in the network verify the proof-of-work. If 51 percent of the network testifies that the PoW was correct, the new block is added to the chain. The combination of these complex math puzzles and verification by many computers ensures that users can trust each and every block on the chain. Heck, one of the main reasons I’m a big supporter of cryptocurrencies is that I trust in the blockchain technology so much. Because the network does the trust-building for you, you now have the opportunity to interact with your data in real time. Centralized third parties aren’t necessary In my previous example of the dispute between Joe and Matt, each of the cousins may have hired a lawyer or a trusted centralized third party to go through the ledger and the documentation of the shop ownership. They trust the lawyers to keep the financial information and the documentation confidential. The third-party lawyers try to build trust between their clients and verify that Matt is indeed the rightful owner of the shop. The problem with centralized third parties and intermediaries such as lawyers and banks is that they add an extra step to resolving the dispute, resulting in spending more time and money. If Matt’s ownership information had been stored in a blockchain, he would’ve been able to cut out the centralized middleman, his lawyer. That’s because all blocks added to the chain would’ve been verified to be true and couldn’t be tampered with. In other words, the blockchain network and the miners are now the third party, which makes the process faster and more affordable. So, Matt could simply show Joe his ownership information secured on the blockchain. He would save a ton of money and time by cutting out the centralized middleman. This type of trusted, peer-to-peer interaction with data can revolutionize the way people access, verify, and transact with one another. And because blockchain is a type of technology and not a single network, it can be implemented in many different ways.

Article / Updated 07-24-2023

If you've been on the internet or watched the news in the past couple of years, chances are you've heard of Bitcoin. But what exactly is this newfangled cryptocurrency that's taking the world by storm? Bitcoin is an interesting form of currency that arose to address economic problems related to centralized currency. Because Bitcoin is not a physical form of currency, it can be a bit difficult to wrap your brain around how it works. But it’s really quite simple. Bitcoin is a form of digital currency that was founded during the financial crisis in 2009. In September of 2008, Lehman Brothers filed for the largest bankruptcy in history. The collapse of this giant kicked off a global financial crisis. A few months later, Bitcoin was born. As a basic explanation, Bitcoin is bank-free internet money. How does Bitcoin work? Unlike the dollar, the euro, the yen, and other forms of centralized currency, Bitcoin is classified as a decentralized currency. The standard currencies that define our modern economy are centralized in banks and controlled by the government (leading to the designation of centralized currency). There is no bank or central authority governing Bitcoins. Bitcoins are controlled by a network of users who control and verify the monetary transactions. Even though Bitcoin seems very unlike the forms of currency you are used to, it still functions just like the money people use every day. You give your Bitcoin to someone and they, in turn, give you goods or services. You can sell your lawnmower to your neighbor for a Bitcoin, just like you would sell it for physical currency. One huge advantage associated with Bitcoin is the fact that it is not centralized and not based on a native currency. Currently, your money is controlled by the country you live in. For example, if you live in the United States but you want to sell your lawnmower to someone in Japan, you can’t sell it for a Japanese yen because the United States uses dollars. But Bitcoin is a worldwide currency. If someone in the United States buys something from a Japanese seller and pays with Bitcoin, there is no conversion rate, no bank delay, and no bank fee. The money is sent instantly and there are no attached fees. Bank closed? Banking hours are irrelevant with Bitcoin because there is no bank controlling your money. When we eliminate banks and are able to send a single form of payment regardless of geographical location, we truly create a global economy. After you buy your goods or services using Bitcoin, you're done. You’ve made your purchase and you can go about your day. However, what happens after your transaction is what really sets Bitcoin apart from Centralized Currencies. Your transaction, and every other Bitcoin transaction, is logged and recorded in what’s called a blockchain. The blockchain is a publicly recorded ledger of all Bitcoin transactions. At this point, other Bitcoin users who are referred to as miners, verify each and every transaction in the blockchain. The anonymity of Bitcoin There is some concern over the anonymity of Bitcoins. Many initially believed it to be an way to pay for goods or services that could not be linked to individuals. However, with the trial of Ross Ulbricht, this has proven to be a false assumption. Ulbricht was arrested for selling drugs and using Bitcoin for the transactions. Every transaction is recorded in the blockchain. While the main goal of tracking Bitcoin transactions is to prevent counterfeiting, it also makes the details of your deal a matter of public record. If your Bitcoin address can be traced to you, then your transactions are not anonymous. When the miner verifies a specified number of transactions, they get paid with newly created (or minted) Bitcoin. This process is how Bitcoins stay secure and how Bitcoins get added to circulation. This process works in the same way that the United States Mint uses to print money to add dollars into circulation. There are currently over 16 million Bitcoins in circulation. As more Bitcoins are added to circulation, the creation rate is decreased. The number of Bitcoins in circulation is expected to never exceed 21 million, due to this decreasing creation model. Time to go convert your paychecks to Bitcoin? Maybe not yet. There are several retailers and websites that do accept Bitcoin (Overstock.com, Subway, and Whole Foods are a few examples), but most businesses have not signed up yet. One issue with Bitcoin, versus other currencies, is that Bitcoin is worth only what people are willing to pay for it. Bitcoins are not backed up by other commodities like gold, so the Bitcoin value has been known to fluctuate a great deal. In late 2009, a Bitcoin was worth around five cents. Today, it fluctuates between two and three thousand dollars. The debate continues to rage over whether Bitcoin will catch on as the prominent form of currency.

Article / Updated 07-24-2023

Ethereum is a comprehensive, decentralized application platform that expands the range of capabilities beyond what was possible before blockchain technology. So, what sets it apart from other decentralized platforms? Here’s a bit of Ethereum background. Introducing Ethereum Bitcoin was the first blockchain technology application. It was revolutionary and defined the first widely used digital currency, called cryptocurrency. The crypto part of the name refers to the use of cryptographic hashes to ensure the integrity of the blockchain. The shared ledger literally keeps a copy of every cryptocurrency transaction that gets verified by all nodes. Using this approach, bitcoin created a permanent record of every exchange of their cryptocurrency. And, because account owners are identified only by an address, bitcoin has always enjoyed a measure of anonymity. Although bitcoin addresses aren’t linked directly to people, many exchanges have records of identities that are related to addresses. At some point, you have to exchange your cryptocurrency for real currency. That switchover point is where many law enforcement officials focus when they’re trying to track down criminals using cryptocurrency. As bitcoin became more and more popular, researchers began to see more applications for blockchain technology beyond cryptocurrency. In 2013, Vitalik Buterin, the cofounder of Bitcoin Magazine, published a whitepaper that proposed a new, more functional blockchain implementation. This new proposal was for the Ethereum blockchain. After gaining interest and attracting technical and financial support, the Ethereum Foundation, a Swiss non-profit organization, was founded and became the developer of Ethereum. Ethereum wasn’t created just to exchange cryptocurrency. In fact, it was designed from the beginning to be different. The core features of Ethereum are the smart contract and ether. Ether is the native cryptocurrency that Ethereum supports, although you can create your own tokens to exchange value in many other forms. Smart contracts provide an execution environment that ensures integrity across all nodes. Any code that executes on one node executes the same way on all nodes. This guarantee makes it possible to deploy a wide range of applications across untrusted environments. The foundational guarantees Ethereum provides support many types of value exchanges without the concern about fraud, censorship, or any involvement by a third party. When you interact with an Ethereum application, you don’t have to rely on any intermediary to broker your transactions. You don’t need a bank, wholesaler, or transaction broker to provide trust. As a result of Ethereum’s disintermediation, you can often complete transactions faster, with far lower service fees and without requiring approval from external authorities. Whereas legacy solutions to data and process sharing required third-party authorities to enforce integrity, Ethereum provides process and data integrity, along with disintermediation. The possibilities are just beginning to be explored. Exploring Ethereum’s consensus, mining, and smart contracts Ethereum provides integrity in the way it implements immutability and smart contracts. Immutability isn’t actually a blockchain guarantee. You can change data in any block — even after other blocks are added to the blockchain. However, as soon as you change a block, that block and all subsequent blocks fail integrity checks and your node is out of sync. Instead of saying that the blockchain is immutable, it is more accurate to say that any changes (mutations) to the blockchain are easily and immediately detected. Ethereum is based on democracy. Each node gets an equal vote. Every time nodes get a new block to add to the blockchain, they validate the block and its transactions, and then vote whether to accept or reject the block. If several different blocks are submitted by different nodes, only one of the blocks can receive votes from a majority. The block that gets more than half of the network node’s votes gets to join the blockchain as its newest block. One of the first problems is to determine when a new block is ready for the blockchain. When too many conflicting blocks are submitted, the voting process slows down. Ethereum makes it hard to add new blocks to keep the number of new block collisions low and to make voting faster. Ethereum uses a consensus protocol called Proof of Work (PoW), which sets the rules for validating and adding new blocks. PoW makes add blocks to the blockchain difficult but profitable. Ethereum defines ether as its cryptocurrency. You can transfer ether between accounts or earn it by doing the hard work of adding blocks to the Ethereum blockchain. The Ethereum PoW mechanism requires that nodes find a number that, when combined with the block’s header data, produces a cryptographic hash value that matches the current target, which is a value that is adjusted to keep new block production at a steady rate. Finding a hash value that matches the current target is hard. You have to try on average more than a quadrillion values to find the right one. That’s the point. Using a PoW mechanism makes it so hard to submit a block that fewer blocks are submitted, which reduces the number of collisions. The node that finds the right value gets a small ether payment for the effort. This process is called mining, and the node that wins the prize is that block’s miner. Mining regulates the speed at which new blocks get submitted as candidate blocks, and results in a number that is easy to validate. Finding the right number to solve the puzzle is difficult, but verifying the number is fast and easy. Another interesting aspect of mining is that each block’s header contains a hash from the previous block. Ethereum nodes use the hash to easily detect unauthorized block changes. If a block changes, the hash result doesn’t match and the block becomes invalid. Mining cryptocurrency is also a way to make money using blockchain technology. Mining has become competitive, and most of today’s miners invest in high-performance hardware with multiple GPUs to carry out the complex operations. To keep the mining process fair, Ethereum uses a complexity value that makes the mining process even harder as miners get faster. Adjusting the complexity allows Ethereum to regulate the new block frequency to an average of one new block every 14 seconds. The glue that holds the Ethereum environment together is the smart contract. Ethereum is much more than just a financial ledger, and smart contracts provide much of its rich functionality. Each Ethereum node runs a copy of the Ethereum virtual machine (EVM). The EVM runs smart contract code in a way that guarantees that smart contracts execute the same way on all nodes and produce the same output. Running smart contract code is not optional. Smart contracts execute based on specific rules and cannot be subverted or halted. The EVM smart contract guarantees provide a stable platform for automated transaction processing that you can trust. Smart contracts provide the primary power of the Ethereum environment. One of the known weaknesses with software is that attackers can sometimes bypass its controls and carry out unintended actions. That type of attack is more difficult in Ethereum, primarily due to its smart contract implementation. Attackers can’t directly attack the blockchain and make unauthorized changes because any such changes will be immediately detected The next most likely attack vector is the smart contract interface to the blockchain data. Ethereum guarantees that smart contract code, which is translated into bytecode before it is written to the blockchain, executes on every EVM instance the same way. Also, the EVM determines when code executes and what code executes. Attackers have few opportunities to leverage smart contract code, which makes Ethereum an even more secure environment. The Ethereum platform as a whole offers possibilities that extend beyond the current uses of blockchain.

Article / Updated 07-10-2023

Cryptocurrency miners need to keep an eye on the latest mining info to be successful. The best method of checking the pulse of the burgeoning cryptocurrency mining industry is to stay up to date using online resources, such as social media and specific online forums covering the topic. Due to the infancy of the cryptocurrency mining space, many news sources in the space can be misleading, downright inaccurate, or even propagate bought-and-paid-for content without a sponsored label. A recent study found that many of the top cryptocurrency news sites were posting sponsored content — essentially ads — under the guise of news. This kind of misinformation makes it important to stay plugged into the community and various other peer-based resources: don’t trust, verify. Check out the following list of resources to stay up with current cryptocurrency mining events: Bitcoin Talk: Use Bitcoin Talk to inquire into almost any cryptocurrency topic, including (but definitely not limited to) mining. Despite the name, it’s not just for bitcoin anymore. You’ll find many different cryptocurrencies being discussed. For example, it is where most popular alternative cryptocurrencies were announced prior to launch. Bitcoin subReddit: The bitcoin subreddit provides a great forum for lots of breaking news and current events and provides a window into the current sentiment in the community. It’s not all serious stuff, though; you’ll find plenty of memes, jokes, and other nonmining content, so do surf lightly. Bitcoin Beginners subreddit: The bitcoin beginners subreddit is an even better resource for recent entrants into the ecosystem, providing plenty of great information for newbies. CoinDesk: CoinDesk is a decent news source in an industry riddled with faulty cryptocurrency news outlets. It also provides exchange rate data from a variety of different cryptocurrencies. CoinJournal: CoinJournal is also a good source for cryptocurrency-related news, but clearly separates press releases from news articles so users can differentiate public relations from journalism. Bitcoin Magazine: Bitcoin Magazine has long been a reliable news outlet in the cryptocurrency space. Although print releases of the magazine stopped years ago, it still provides good and consistent news coverage on its website. Merkle Report: The Merkle Report curates a wide variety of relevant content from various news sources in the cryptocurrency space. It offers a good one-stop shop for news across the industry. Messari: Messari has a ton of cryptocurrency-focused data, research, and news from across the industry. It also offers a periodic daily newsletter to stay up-to-date on current trends. Block Digest: Block Digest is an excellent source of news in the form of a weekly podcast that features various community members discussing and digesting news and headlines from the Bitcoin space. Stack Exchange: The Bitcoin Stack Exchange has a large trove of questions answered by other cryptocurrency enthusiasts. Anyone can post a question or an answer. If you are looking for specific insight, chances are someone has already answered the question you may have. Why current events are important for cryptocurrency mining Cryptocurrencies and blockchains act as an immutable record of data, indisputable information that is accessible to anyone with the tools and knowledge to look for it. This isn’t the case with off-chain data, such as current events and news in the space, which is why it is very important to stay up-to-date on accurate information from reliable sources if you intend to mine cryptocurrency. Current events affect what’s going on in the mining space. They can affect the value of the cryptocurrency, and thus, in response to fluctuation in the value, the network hash rate, your percentage of the network hash rate, the amount of blocks you’ll mine, and ultimately your loss or profit. There is plethora of news sources in the cryptocurrency mining space, but not all can be trusted. Some peddle misinformation with the intent of misleading you. Staying up to date on the latest and greatest in the cryptocurrency mining industry is crucial to your continued success in the space. Reliable content is the best defense against spin and distortion from those that would lead you astray. Without information, you may find yourself mining a cryptocurrency without much future value, or on the uneconomical side of a blockchain fork. In any event, as a cryptocurrency miner, you will will have the best chance of success if you stay current with developing information.

Cheat Sheet / Updated 03-08-2023

So, you’ve heard about Bitcoin and other cryptocurrencies, and you’re ready to add these new kids on the block to your investment portfolio — that’s great! To make the best decisions for your portfolio, educate yourself on the basics of cryptocurrencies and what you need to get started. Also, be sure to do your homework on a crypto’s fundamentals before adding any new assets to your portfolio.

Article / Updated 02-14-2023

Listen to the article:Download audio The decentralized finance (DeFi) sector is an alternative to traditional financial services with applications in cryptocurrency or blockchain technology. The modern DeFi era truly began with Bitcoin, the first widespread implementation of a decentralized method of record-keeping that is permissionless yet reliable and secure. Bitcoin effectively provides a currency that doesn’t rely on the stability of a central authority. The implications of such a technology are huge for developing economies where faith in central government is low and bank runs are a serious risk, if not a reality. Moreover, much of the world’s population is, at most, one generation removed from being forcibly chased from their homes. Consider these events: Just 70 years ago, Seoul, the capital of Korea, was captured and recaptured four times, and families were permanently separated in a war that ultimately resulted in two separate nations. The fall of Saigon 50 years ago resulted in a mass exodus of Vietnamese refugees seeking asylum. More recently, the fall of Kabul in 2021 and the Russian invasion of Ukraine in 2022 led to more waves of emigrants who found themselves in sudden exile. But aside from more dire circumstances — like the collapse of a banking system or the fall of your government — it’s natural to question what true value Bitcoin’s underlying technology adds in a stable and wealthy nation. After all, I trust that Bank of America won’t maliciously siphon funds from my account, and despite the infamous Wells Fargo fake account scandal (for which it was ultimately fined $3 billion), I would even entrust my money to a Wells Fargo checking account. Nonetheless, reliable economies still have submarkets that are inherently rife with distrust of the central operator, with dark pools (securities exchanges in which participants can trade anonymously and with less transparency) being a case in point. (Try Googling “dark pool lawsuit”!) The trust issue naturally goes away if there is no central operator to distrust, and with the advent of Bitcoin, a proven technology now exists to implement modern DeFi processes across many use cases in finance. Demystifying DeFi The idea of decentralized processes is certainly not new. After all, before centralized finance (CeFi) arose to establish trusted intermediaries, primitive DeFi was the status quo. Transactions were all peer-to-peer, and you were constrained by your local neighborhood to gain access to capital and to obtain goods by bartering one item for another. Record-keeping was minimal, and ownership was determined by physical possession. In modern markets, transactions require confidence in the validity of the agreement, which is provided by reliable and secure record-keeping systems. After all, when you sell your car, you are really transferring the legal right to access the car. Without a reliable record-keeping system in place, chaos would ensue. (Imagine the return of finders keepers as a rule of law!) What’s truly exciting now is the distributed-ledger technology that provides a reliable and secure method of record-keeping that is not maintained by a trusted intermediary, such as Bank of America or the DMV. Behold the dawn of the modern DeFi era! From autonomous collectives to trillion-dollar DAOs Well-functioning, leaderless communities are all around us, and in each circumstance, an inherent governance mechanism incentivizes and gels the group to act in concert — all without an elected official to assign roles and lead the process. From homework teams to neighborhoods to informal potlucks, small groups can effectively and efficiently self-govern when there are grades to maintain, property prices to protect, or reputational concerns at stake. These small-scale examples probably feel reasonable and natural. But what if I told you that a trillion-dollar organization could autonomously validate, execute, secure, and provide ongoing updates to an entire system without an elected leader to assign tasks? The concept sounds naïve at best, and possibly crazy. And yet, Bitcoin has provided a battle-tested case in point for the underlying technology that enables it to function in a decentralized and autonomous fashion. Yes, Bitcoin is indeed a trillion-dollar decentralized autonomous organization (DAO)! Of course, at this scale and with the value at stake, a DAO can’t rely solely on simple mechanisms like reputational concerns to incentivize participants to behave honestly and in a way that upholds the values of the system. Instead, the underlying protocol must be protected against malicious players who may work hard to cheat the system. Transacting in DeFi versus CeFi Borrowing assets Suppose you want to borrow money. How would this transaction be implemented in primitive DeFi versus modern CeFi versus modern DeFi? Under a primitive DeFi process: You hit up everyone you know within reasonable geographic proximity — a neighbor, a friend, a family member — and hope that someone will lend you something that you can barter with at your local marketplace. Under a modern CeFi process: People have checking accounts, savings accounts, CDs, and so on with the bank, which means that all these people have lent money to the bank. In turn, the bank lends some of this money to you. Under a modern DeFi process: People lock up funds in a smart-contract account, which is a software program on a public blockchain that automatically enforces and executes the rules in the smart-contract code. This smart-contract account is programmed to function as a lending pool from which you can borrow funds. Selling assets Suppose that instead of borrowing assets, you have assets that you want to sell. Comparing the three types of processes again, here’s how this transaction would be implemented: Under a primitive DeFi process: You again hit up everyone you know within reasonable geographic proximity — a neighbor, friend, family member — and attempt to barter by trial and error. Under a modern CeFi process: Liquidity providers stand by, waiting to buy the asset from those who want to sell and to sell the asset to those who want to buy. These liquidity providers commit to buy and sell a certain quantity of assets at varying prices on designated exchanges that serve as official marketplaces for the assets in question. In turn, you place an order to sell the asset through your brokerage firm (who has custody of the asset). Under a modern DeFi process: Liquidity providers lock up assets and funds in a smart-contract account. This smart-contract account serves as a liquidity pool and is programmed to function as an automated market maker. In turn, you can swap your assets for funds from this smart-contract account.