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Cryptography puzzle /r/Bitcoin

Cryptography puzzle /Bitcoin submitted by HiIAMCaptainObvious to BitcoinAll [link] [comments]

How far cryptography skills allows you to gain more money?

Hello, I have been wondering whether skills in cryptography allows someone to gain more money from the cryptocurrency world. Are math skills beneficial in cryptocurrency mining math puzzles? Are there pathways other than cryptocurrency mining which are profitable for someone with mathematical skills?
submitted by xTouny to BitcoinBeginners [link] [comments]

Top 25 Questions and answer About Cryptocurrency

Top 25 Questions and answer About Cryptocurrency
https://preview.redd.it/dju4oz1g16c51.jpg?width=2400&format=pjpg&auto=webp&s=fe57edcd81ffa31bff95fe3026055020f7720dce
Cryptocurrencies have now become a buzz word. Despite the resilience that it faced initially, cryptocurrencies have come a long way. There are a total of around 5000 cryptocurrencies circulating in the market. If you plan to make a career in this domain, you need to run through the following questions.
1. What is a cryptocurrency?
Cryptocurrency is a digital currency that is transacted on a distributed ledger platform or decentralized platform or Blockchain. Any third party does not govern it, and the transaction takes place between peer-to-peer.
2. When was the first Cryptocurrency introduced?
The first Cryptocurrency or Bitcoin was introduced in the year 2009.
3. Who created Cryptocurrency?
Satoshi Nakamoto gave the first Cryptocurrency. The white paper for the same was given in 2008 and a computer program in 2009.
4. What are the top three cryptocurrencies?
The following are the three cryptocurrencies:
• Bitcoin (BTC) $128bn.
• Ethereum (ETH) $19.4bn.
• XRP (XRP) $8.22bn.
5. Where can you store Cryptocurrency?
Cryptocurrencies are stored in a digital wallet, and this is accessible via public and private keys. A public key is the address of your wallet, and the private key is the one that helps you in executing the transaction.
6. Which is the safest wallet for Cryptocurrency?
The most secured wallet for Cryptocurrency is a hardware wallet. It is not connected to the internet, and thus it is free from a hacking attack. It is also known as a cold wallet.
7. From where I can purchase cryptocurrencies?
The easiest way to buy Cryptocurrency is via crypto exchange. You can several crypto exchanges like Coinbase, Bitbuy, CHANGENow, Kraken etc.
8. What are the ten popular crypto exchanges?
The following are the best ten popular crypto exchange:
  1. Coinbase
  2. Binance
  3. FTX
  4. Cex.io
  5. Local Bitcoins
  6. Bitfinex
  7. LocalBitcoins
  8. Bittrex
  9. Coinmama
  10. Kraken
9. What are the key features of Blockchain?
We all know that Bitcoin or any other cryptocurrency runs on the Blockchain platform, which gives it some additional features like decentralization, transparency, faster speed, immutability and anonymity.
10. What is AltCoin?
It means Alternative Coin. All the cryptocurrencies other than Bitcoin are alternative coins. Similar to Bitcoin, AltCoins are not regulated by any bank. The market governs them.
11. Are cryptocurrency sites regulated?
Most cryptocurrency websites are not regulated.
12. How are Cryptocurrency and Blockchain related?
Blockchain platform aids cryptocurrency transactions, which makes use of authentication and encryption techniques. Cryptography enables technology for Cryptocurrency, thus ensuring secure transactions.
13. What is a nonce?
The mining process works on the pattern of validating transactions by solving a mathematical puzzle called proof-of-work. The latter determine a number or nonce along with a cryptographic hash algorithm to produce a hash value lower than a predefined target. The nonce is a random value used to vary the value of hash so that the final hash value meets the hash conditions.
14. How is Cryptocurrency different from other forms of payment?
Cryptocurrency runs on Blockchain technology, which gives it an advantage of immutability, cryptography, and decentralization. All the payments are recorded on the DLT, which is accessible from any part of the world. Moreover, it keeps the identity of the user anonymous.
15. Which is the best Cryptocurrency?
Several cryptocurrencies have surged into the market, and you can choose any of these. The best way to choose the right cryptocurrencies is to look at its market value and assess its performance. Some of the prominent choices are Bitcoin, Ethereum, Litecoin, XRP etc.
16. What is the worst thing that can happen while using Cryptocurrency?
One of the worst things could be you losing your private keys. These are the passwords that secure your wallet, and once they are lost, you cannot recover them.
17. What is the private key and public key?
Keys secure your cryptocurrency wallet; these are public key and private key. The public key is known to all, like your bank account number, on the hand, the private key is the password which protects your wallet and is only known to you.
18. How much should one invest in Cryptocurrency?
Well, investing in Cryptocurrency is a matter of choice. You can study how the market is performing, and based on the best performing cryptocurrency, you can choose to invest. If you are new to this, then it’s advisable that you must start small.
19. From where can one buy Bitcoin using Fiat currency?
Two of the popular choices that you have are Coinbase and Binance, where you can purchase Cryptocurrency using fiat currency.
20. Are the coins safe on exchanges?
All the exchanges have a high level of security. Besides, these are regularly updated to meet the security requirements, but it’s not advisable to leave your coins on them since they are prone to attack. Instead, you can choose a hard wallet to store your cryptocurrencies, which are considered the safest.
21. What determines the price of cryptocurrencies?
The price of cryptocurrencies is determined by the demand and supply in the market. Besides, how the market is performing also determines the price of cryptocurrencies.
22. What are some of the prominent cryptocurrencies terminologies?
There are jargons which are continuously used by people using cryptocurrencies are:
DYOR: Do Your Own Research
Dapps: Decentralized Applications
Spike: Shapr increase in the price of the Cryptocurrency
Pump: Manipulated increase in the price of a cryptocurrency
Dump: Shapr decline in the price of Cryptocurrency
23. How can I check the value of cryptocurrencies?
Various platforms will give you an update on the price of cryptocurrencies. You can keep a tab on them and check the pricing of cryptocurrencies.
24. What are the advantages of using digital currencies?
There are various advantages like you are saved from double-spending, the transactions are aster and secure. Moreover, digital currencies now have global acceptance.
25. What is the difference between cryptocurrencies and fiat currencies?
Cryptocurrencies are digital currencies which run on the Blockchain platform and are not governed by any government agencies, while the fiat currencies are the ones which are governed by authorities and government.
Conclusion- This was all the FAQs pertaining to cryptocurrency, for more such information keep coming back to Blockchain Council.
submitted by Blockchain_org to BlockchainStartups [link] [comments]

Charles Hoskinson Reveals His 9 Favorite Crypto Projects

Cointelegraph recently sat down for an interview with Charles Hoskinson, who is the co-founder of Ethereum and CEO and founder of IOHK — the company developing Cardano. During that interview, Hoskinson shared details about some of the crypto projects that he is most interested in.
Ergo
“It's one of the most revolutionary cryptocurrencies ever built. Got so many crazy ideas like non-outsourceable puzzles and sigma protocols and pruning the blockchain and roller chains. All this crazy stuff. Even has a proof of no premine.”
Ergo was founded by Hoskinson’s “favorite technologist”, Alex Chepurnoy, who also contributed to the development of Cardano. It is a PoW blockchain platform with Turing complete smart contracts that employs a number of advanced features like zero-knowledge proofs, ring signatures, oracles, and adjustable block size.
ZCash
“They've advanced the entire discussion of zero knowledge cryptography. We've borrowed some of their stuff. We've innovated on some of the things.” … “They’re carrying the banner of privacy and the banner of inclusive accountability, and both of these things are incredibly important as a core.”
Zcash is a privacy coin that allows for both transparent and private transactions. Hoskinson has a lot of respect for ZCash and their work with zero knowledge proofs.
StarkWare
“Those are wonderful people and they're incredibly smart people. And again, they're allowing us to do amazing things with scale.”
Hoskinson likes the fact that StarkWare’s development also helps Cardano to improve its scalability. The company was co-founded by Eli Ben Sasson, who was one of Zcash’s founding scientists. Its goal is to enable on-chain scalability through the usage of zero-knowledge proofs.
Lightning Labs
“I have a lot of respect for Lightning Labs. <...> And that's a good solution, if not for scalability, for interoperability between cryptocurrencies. And they seem to be easy enough to talk to, to collaborate with, and fairly open people, good people.”
The company is building second layer solutions for the Bitcoin network. Their mission is to offer users a way to send and receive money more efficiently than ever before. Hoskinson noted that he approves of Elizabeth Stark’s specification-driven approach to development.
Dash
“I have a lot of respect for the Dash community. I think they were one of the first to really prove out a cryptocurrency treasury and show the power of a treasury. And they even sponsored research at Arizona State University with it.”
Dash is another project on Hoskinson’s list that is focused on privacy. It employs two layer consensus — with master nodes sitting on top of the proof-of-work base layer. Hoskinson believes that Dash proved “the power of a treasury”. He also has an appreciation for Dash’s community.
Tezos
“I don't really like their community too much because they're so toxic and negative towards us and they just never seem to let an opportunity kick us when we're down, escape. But overall, I do have a lot of respect for at least the philosophy and the technology that they've been deploying.”
Tezos is a proof of stake blockchain with on-chain governance. Tezos was created to provide the safety and code correctness required for assets and other high value use cases. Hoskinson praises Tezos, despite its community’s perceived toxicity towards Cardano.
Algorand
“... they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we're able to reference each other's work and learn from each other and grow from each other.”
Algorand is another proof-of-stake blockchain that was founded by Turing-award recipient, Silvio Micali. It’s main goal is to create a transparent system in which all users can achieve success via decentralization.
Avalanche
“I think Avalanche has some merit as well, especially in the IoT [Internet of Things] space in Ava is going to be an interesting coin that comes out. And there's a lot of interesting ideas there.”
Founded by another preeminent scholar, Cornell professor Emin Gün Sirer, Avalanche promises scalability and operability. Hoskinson is optimistic about Avalanche’s coin, which pays for fees and provides the basic unit of account between the multiple blockchains deployed on the larger AVA network.
Basic Attention Token
“... the growth curve and the adoption of BATs has been just phenomenal. And I think they're poised on a five or 10 years to become a major player in the very least displaced Firefox completely and potentially even have a meaningful share of the browser market, which could translate to billions of dollars of advertising revenue that's not connected to, you know, the cartels that exist and allow people to avoid being deplatformed.”
Brave browser rewards users for watching advertisements by distributing Basic Attention Tokens. Brave was founded by Brendan Eich, the creator of JavaScript and founder of the Mozilla project. Hoskinson believes that BAT has the potential to disrupt the “cartels” that control online advertising.
It is not surprising that Hoskinson, who is building Cardano with a research-first ethos and who studied number theory in school, has picked quite a few projects that both share his philosophies and focus on privacy.
submitted by eleanorcwhite to cardano [link] [comments]

This is just a theory. What do you guys think?

Just theory if Satoshi wrote the name of the creator which would be 256th puzzle of a puzzle game 14 years ago, and the card has written "find me" in Japanese at side forming this puzzle. Just for looking this picture is it possible to find this gentleman on the internet as the location from the picture been discovered " Kaysersberg, Alsace, France". It would be a great coincidence if the owner of the 256th card was really Satoshi in a ranking of 256 cards? This will be very important figure for 256 Bitcoin value. People might on here might ask why and explain your theory? Well just for a explanation this puzzle is complex and if his card is 256th puzzle card and is a value of 256. What if the answer is 2SHA256 which SHA stands for Secure Hash Algorithm that Bitcoin has been using for mining and address generation. This hash is one of those high security cryptography functions and also the length would have data fix that might contribute of harmony between these blocks.
1.) For example, word would be "squanch" with SHA256 encryption -> “5bfdd901369fbb2ae5052ab5307c74f97651e09bd83e80cf3153952bb81cc7b8”.
2.) satoshi -> DA2876B3EB31EDB4436FA4650673FC6F01F90DE2F1793C4EC332B2387B09726F
3.) Satoshi -> 002688CC350A5333A87FA622EACEC626C3D1C0EBF9F3793DE3885FA254D7E393
** you can play around with it => https://passwordsgenerator.net/sha256-hash-generato **
SHA256 with its code consist 32 bits and 64 digits, so we should not get too far from solving this puzzles some how if this was an method of solving this question via value. Also, the puzzle from this game began in which is called "The city of Perplex". This game has a original concept and also promise reward $200,000 when all the puzzles on the cards are solved. But, think about it f the 256th card is Satoshi that has not been solved it has not been resolved on card number 238. As you can imagine, the 256th card, which is “Satoshi”, has not been resolved. Otherwise, it has not been resolved on card number 238. Hint that our card gives to everyone to solve the puzzle is “ My name is Satoshi ...”. Needless to say with the game has been on the market since 1-2 years before the generation of Bitcoin and Crypto has started. Although I"m also thinking the man might not be Satoshi as his a player, so looking that either looks and style similar is only hope.
submitted by LeftSubstance to FindSatoshi [link] [comments]

Charles Hoskinson Reveals His 9 Favorite Crypto Projects

Cointelegraph recently sat down for an interview with Charles Hoskinson, who is the co-founder of Ethereum and CEO and founder of IOHK — the company developing Cardano. During that interview, Hoskinson shared details about some of the crypto projects that he is most interested in.
Ergo
“It's one of the most revolutionary cryptocurrencies ever built. Got so many crazy ideas like non-outsourceable puzzles and sigma protocols and pruning the blockchain and roller chains. All this crazy stuff. Even has a proof of no premine.”
Ergo was founded by Hoskinson’s “favorite technologist”, Alex Chepurnoy, who also contributed to the development of Cardano. It is a PoW blockchain platform with Turing complete smart contracts that employs a number of advanced features like zero-knowledge proofs, ring signatures, oracles, and adjustable block size.
ZCash
“They've advanced the entire discussion of zero knowledge cryptography. We've borrowed some of their stuff. We've innovated on some of the things.” … “They’re carrying the banner of privacy and the banner of inclusive accountability, and both of these things are incredibly important as a core.”
Zcash is a privacy coin that allows for both transparent and private transactions. Hoskinson has a lot of respect for ZCash and their work with zero knowledge proofs.
StarkWare
“Those are wonderful people and they're incredibly smart people. And again, they're allowing us to do amazing things with scale.”
Hoskinson likes the fact that StarkWare’s development also helps Cardano to improve its scalability. The company was co-founded by Eli Ben Sasson, who was one of Zcash’s founding scientists. Its goal is to enable on-chain scalability through the usage of zero-knowledge proofs.
Lightning Labs
“I have a lot of respect for Lightning Labs. <...> And that's a good solution, if not for scalability, for interoperability between cryptocurrencies. And they seem to be easy enough to talk to, to collaborate with, and fairly open people, good people.”
The company is building second layer solutions for the Bitcoin network. Their mission is to offer users a way to send and receive money more efficiently than ever before. Hoskinson noted that he approves of Elizabeth Stark’s specification-driven approach to development.
Dash
“I have a lot of respect for the Dash community. I think they were one of the first to really prove out a cryptocurrency treasury and show the power of a treasury. And they even sponsored research at Arizona State University with it.”
Dash is another project on Hoskinson’s list that is focused on privacy. It employs two layer consensus — with master nodes sitting on top of the proof-of-work base layer. Hoskinson believes that Dash proved “the power of a treasury”. He also has an appreciation for Dash’s community.
Tezos
“I don't really like their community too much because they're so toxic and negative towards us and they just never seem to let an opportunity kick us when we're down, escape. But overall, I do have a lot of respect for at least the philosophy and the technology that they've been deploying.”
Tezos is a proof of stake blockchain with on-chain governance. Tezos was created to provide the safety and code correctness required for assets and other high value use cases. Hoskinson praises Tezos, despite its community’s perceived toxicity towards Cardano.
Algorand
“... they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we're able to reference each other's work and learn from each other and grow from each other.”
Algorand is another proof-of-stake blockchain that was founded by Turing-award recipient, Silvio Micali. It’s main goal is to create a transparent system in which all users can achieve success via decentralization.
Avalanche
“I think Avalanche has some merit as well, especially in the IoT [Internet of Things] space in Ava is going to be an interesting coin that comes out. And there's a lot of interesting ideas there.”
Founded by another preeminent scholar, Cornell professor Emin Gün Sirer, Avalanche promises scalability and operability. Hoskinson is optimistic about Avalanche’s coin, which pays for fees and provides the basic unit of account between the multiple blockchains deployed on the larger AVA network.
Basic Attention Token
“... the growth curve and the adoption of BATs has been just phenomenal. And I think they're poised on a five or 10 years to become a major player in the very least displaced Firefox completely and potentially even have a meaningful share of the browser market, which could translate to billions of dollars of advertising revenue that's not connected to, you know, the cartels that exist and allow people to avoid being deplatformed.”
Brave browser rewards users for watching advertisements by distributing Basic Attention Tokens. Brave was founded by Brendan Eich, the creator of JavaScript and founder of the Mozilla project. Hoskinson believes that BAT has the potential to disrupt the “cartels” that control online advertising.
It is not surprising that Hoskinson, who is building Cardano with a research-first ethos and who studied number theory in school, has picked quite a few projects that both share his philosophies and focus on privacy.
submitted by eleanorcwhite to btc [link] [comments]

What Is Proof of Work (PoW)?

What Is Proof of Work (PoW)?
Contents
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Introduction
Proof of Work (commonly abbreviated to PoW) is a mechanism for preventing double-spends. Most major cryptocurrencies use this as their consensus algorithm. That’s just what we call a method for securing the cryptocurrency’s ledger.
Proof of Work was the first consensus algorithm to surface, and, to date, remains the dominant one. It was introduced by Satoshi Nakamoto in the 2008 Bitcoin white paper, but the technology itself was conceived long before then.
Adam Back’s HashCash is an early example of a Proof of Work algorithm in the pre-cryptocurrency days. By requiring senders to perform a small amount of computing before sending an email, receivers could mitigate spam. This computation would cost virtually nothing to a legitimate sender, but quickly add up for someone sending emails en masse.

What is a double-spend?

A double-spend occurs when the same funds are spent more than once. The term is used almost exclusively in the context of digital money — after all, you’d have a hard time spending the same physical cash twice. When you pay for a coffee today, you hand cash over to a cashier who probably locks it in a register. You can’t go to the coffee shop across the road and pay for another coffee with the same bill.
In digital cash schemes, there’s the possibility that you could. You’ve surely duplicated a computer file before — you just copy and paste it. You can email the same file to ten, twenty, fifty people.
Since digital money is just data, you need to prevent people from copying and spending the same units in different places. Otherwise, your currency will collapse in no time.
For a more in-depth look at double-spending, check out Double Spending Explained.

Why is Proof of Work necessary?

If you’ve read our guide to blockchain technology, you’ll know that users broadcast transactions to the network. Those transactions aren’t immediately considered valid, though. That only happens when they get added to the blockchain.
The blockchain is a big database that every user can see, so they can check if funds have been spent before. Picture it like this: you and three friends have a notepad. Anytime one of you wants to make a transfer of whatever units you’re using, you write it down — Alice pays Bob five units, Bob pays Carol two units, etc.
There’s another intricacy here — each time you make a transaction, you refer to the transaction where the funds came from. So, if Bob was paying Carol with two units, the entry would actually look like the following: Bob pays Carol two units from this earlier transaction with Alice.
Now, we have a way to track the units. If Bob tries to make another transaction using the same units he just sent to Carol, everyone will know immediately. The group won’t allow the transaction to be added to the notepad.
Now, this might work well in a small group. Everyone knows each other, so they’ll probably agree on which of the friends should add transactions to the notepad. What if we want a group of 10,000 participants? The notepad idea doesn’t scale well, because nobody wants to trust a stranger to manage it.
This is where Proof of Work comes in. It ensures that users aren’t spending money that they don’t have the right to spend. By using a combination of game theory and cryptography, a PoW algorithm enables anyone to update the blockchain according to the rules of the system.

How does PoW work?

Our notepad above is the blockchain. But we don’t add transactions one by one — instead, we lump them into blocks. We announce the transactions to the network, then users creating a block will include them in a candidate block. The transactions will only be considered valid once their candidate block becomes a confirmed block, meaning that it has been added to the blockchain.
Appending a block isn’t cheap, however. Proof of Work requires that a miner (the user creating the block) uses up some of their own resources for the privilege. That resource is computing power, which is used to hash the block’s data until a solution to a puzzle is found.
Hashing the block’s data means that you pass it through a hashing function to generate a block hash. The block hash works like a “fingerprint” — it’s an identity for your input data and is unique to each block.
It’s virtually impossible to reverse a block hash to get the input data. Knowing an input, however, it’s trivial for you to confirm that the hash is correct. You just have to submit the input through the function and check if the output is the same.
In Proof of Work, you must provide data whose hash matches certain conditions. But you don’t know how to get there. Your only option is to pass your data through a hash function and to check if it matches the conditions. If it doesn’t, you’ll have to change your data slightly to get a different hash. Changing even one character in your data will result in a totally different result, so there’s no way of predicting what an output might be.
As a result, if you want to create a block, you’re playing a guessing game. You typically take information on all of the transactions that you want to add and some other important data, then hash it all together. But since your dataset won’t change, you need to add a piece of information that is variable. Otherwise, you would always get the same hash as output. This variable data is what we call a nonce. It’s a number that you’ll change with every attempt, so you’re getting a different hash every time. And this is what we call mining.
Summing up, mining is the process of gathering blockchain data and hashing it along with a nonce until you find a particular hash. If you find a hash that satisfies the conditions set out by the protocol, you get the right to broadcast the new block to the network. At this point, the other participants of the network update their blockchains to include the new block.
For major cryptocurrencies today, the conditions are incredibly challenging to satisfy. The higher the hash rate on the network, the more difficult it is to find a valid hash. This is done to ensure that blocks aren’t found too quickly.
As you can imagine, trying to guess massive amounts of hashes can be costly on your computer. You’re wasting computational cycles and electricity. But the protocol will reward you with cryptocurrency if you find a valid hash.
Let’s recap what we know so far:
  • It’s expensive for you to mine.
  • You’re rewarded if you produce a valid block.
  • Knowing an input, a user can easily check its hash — non-mining users can verify that a block is valid without expending much computational power.
So far, so good. But what if you try to cheat? What’s to stop you from putting a bunch of fraudulent transactions into the block and producing a valid hash?
That’s where public-key cryptography comes in. We won’t go into depth in this article, but check out What is Public-Key Cryptography? for a comprehensive look at it. In short, we use some neat cryptographic tricks that allow any user to verify whether someone has a right to move the funds they’re attempting to spend.
When you create a transaction, you sign it. Anyone on the network can compare your signature with your public key, and check whether they match. They’ll also check if you can actually spend your funds and that the sum of your inputs is higher than the sum of your outputs (i.e., that you’re not spending more than you have).
Any block that includes an invalid transaction will be automatically rejected by the network. It’s expensive for you to even attempt to cheat. You’ll waste your own resources without any reward.
Therein lies the beauty of Proof of Work: it makes it expensive to cheat, but profitable to act honestly. Any rational miner will be seeking ROI, so they can be expected to behave in a way that guarantees revenue.

Proof of Work vs. Proof of Stake

There are many consensus algorithms, but one of the most highly-anticipated ones is Proof of Stake (PoS). The concept dates back to 2011, and has been implemented in some smaller protocols. But it has yet to see adoption in any of the big blockchains.
In Proof of Stake systems, miners are replaced with validators. There’s no mining involved and no race to guess hashes. Instead, users are randomly selected — if they’re picked, they must propose (or “forge”) a block. If the block is valid, they’ll receive a reward made up of the fees from the block’s transactions.
Not just any user can be selected, though — the protocol chooses them based on a number of factors. To be eligible, participants must lock up a stake, which is a predetermined amount of the blockchain’s native currency. The stake works like bail: just as defendants put up a large sum of money to disincentivize them from skipping trial, validators lock up a stake to disincentivize cheating. If they act dishonestly, their stake (or a portion of it) will be taken.
Proof of Stake does have some benefits over Proof of Work. The most notable one is the smaller carbon footprint — since there’s no need for high-powered mining farms in PoS, the electricity consumed is only a fraction of that consumed in PoW.
That said, it has nowhere near the track record of PoW. Although it could be perceived as wasteful, mining is the only consensus algorithm that’s proven itself at scale. In just over a decade, it has secured trillions of dollars worth of transactions. To say with certainty whether PoS can rival its security, staking needs to be properly tested in the wild.

Closing thoughts

Proof of Work was the original solution to the double-spend problem and has proven to be reliable and secure. Bitcoin proved that we don’t need centralized entities to prevent the same funds from being spent twice. With clever use of cryptography, hash functions, and game theory, participants in a decentralized environment can agree on the state of a financial database.
submitted by D-platform to u/D-platform [link] [comments]

What are the benefits of Crypto Mining?

What are the benefits of Crypto Mining?

https://preview.redd.it/q6xfuxvtmjv41.png?width=875&format=png&auto=webp&s=b092bca718f6cba3ae8c327a54952f4e65c7ed25
If you’ve ever heard the word cryptocurrency, then you’ve probably heard about the mining as well. If you still don’t know what cryptocurrency mining is and about profitable, keep reading!
In order to understand crypto mining, you need to fully understand what a cryptocurrency is first. Unlike traditional currencies (aka fiat currency), a cryptocurrency is a digital asset that works in a decentralized way; it does not require a bank or a third-party to operate. Someone can send someone else a cryptocurrency directly without any third-party involved.
The first ever cryptocurrency created was Bitcoin.
Every single cryptocurrency has a blockchain, which is an immutable digital ledger. A single transaction is recorded on the blockchain permanently, which no one can edit or delete it randomly.
A blockchain works by incentivizing miners to confirm the authenticity of each transaction. A person who confirmed the authenticity of the transaction, get the cryptocurrency as a reward.
Since the cryptocurrencies are based on cryptography, the miners need to solve extremely complicated mathematical problems to verify each transaction. They are incentivized to do it because they are rewarded for it.
Anyone can participate in mining from anywhere in the world as long as they have a computer. When the number of miners increases, it allows cryptocurrencies to be more secure. Even if an attacker would want to attack the blockchain network, somehow, an attacker needs to know 51% or more miners. Since the miners are spread around the world, this task is close to impossible and most likely not economically viable.

Types of Crypto Mining

Bitcoin was the first cryptocurrency to introduce the Proof-of-Work (PoW) consensus algorithm, where users have to solve complex mathematical problems in order to process transactions and secure the whole network.
Bitcoin was quite easy to mine at first, and you could do it with your CPU, there was no need for special equipment, and the rewards were huge. However, today, Bitcoin’s mining difficulty has increased considerably, and users need specialized and expensive equipment to mine it.
There are four main types of mining when it comes to the PoW algorithm. There is a CPU, GPU, ASIC, and Cloud mining.
The first three are essentially the same, but they use different parts of your computer. There are some cryptocurrencies specifically created to be mined only through CPU and to be ASIC resistant. Other cryptocurrencies can be mined through all three methods.
Cloud mining, on the other hand, is a process where a user basically pays to rent out a mining machine somewhere else. You don’t have to buy the equipment physically but it is wise to carry out due diligence and research into who and what you are paying for.

Proof of Stake ‘Mining’

With the introduction of the Proof-of-Stake (PoS) consensus algorithm, cryptocurrency mining changed forever. In this case, users don’t have to solve computationally intensive puzzles. In PoS-based cryptocurrencies, the creator of blocks is chosen via random selection or wealth.
Validators in the PoS consensus have to lock up some of their coins as a ‘stake’ and will get rewarded for it.
There are many benefits over the traditional PoW like lower cost and more energy efficiency. Additionally, because PoS encourages users to hold the coin in the wallet, it stabilizes the price a bit more than conventional cryptocurrencies.
Today, you can find plenty of exchanges that support staking, including the most popular exchange, Binance. The safest option, however, is always going to be staking using your own private wallet.

Proof of Formulation ‘Mining’

FLETA has developed the most innovative and newest consensus algorithms known as Proof-of-Formulation (PoF).
This PoF consensus algorithm uses something called the ‘Synchronization Group’, which allows all of the miners to mine in an orderly manner. The generating block time only takes 0.5 seconds, and the observer node checks the irregular blocks in real-time, which prevents the fork and double-spending. Furthermore, FLETA’s PoF algorithm is currently undergoing the patent process through the United States Patent Office (Application Number: 62717695).
The users can easily create a FLETA formulator through the official FLETA wallet. The minimum amount to create a single Formulator is 200,000 FLETA. The blockchain network is operated by FLETA and requires a 6-core CPU or higher.
As you created at least four Formulators, you will be able to upgrade it, which allows you to get 1.3 times more rewards.
Besides creating a Formulator, users can contribute to mining with a minimum amount of 100 FLETA.

Conclusion

Today, various mining methods exist, each with their pros and cons. However, cryptocurrency miners are still craving more convenient (and less costly) ways to earn rewards.
FLETA’s Proof-of-Formulation consensus is not only fast, but it is also highly secure the added layer of protection between observer nodes, formulator, and the synchronization group.
With plenty more to come, in terms of DApp development, games and partnerships, FLETA’s PoF is increasingly becoming the preferred consensus of many developers due to the speed, security and convenience of the platform.
**
submitted by fleta-official to fletachain [link] [comments]

Charles Hoskinson Reveals His 9 Favorite Crypto Projects

Cointelegraph recently sat down for an interview with Charles Hoskinson, who is the co-founder of Ethereum and CEO and founder of IOHK — the company developing Cardano. During that interview, Hoskinson shared details about some of the crypto projects that he is most interested in.
Ergo
“It's one of the most revolutionary cryptocurrencies ever built. Got so many crazy ideas like non-outsourceable puzzles and sigma protocols and pruning the blockchain and roller chains. All this crazy stuff. Even has a proof of no premine.”
Ergo was founded by Hoskinson’s “favorite technologist”, Alex Chepurnoy, who also contributed to the development of Cardano. It is a PoW blockchain platform with Turing complete smart contracts that employs a number of advanced features like zero-knowledge proofs, ring signatures, oracles, and adjustable block size.
ZCash
“They've advanced the entire discussion of zero knowledge cryptography. We've borrowed some of their stuff. We've innovated on some of the things.” … “They’re carrying the banner of privacy and the banner of inclusive accountability, and both of these things are incredibly important as a core.”
Zcash is a privacy coin that allows for both transparent and private transactions. Hoskinson has a lot of respect for ZCash and their work with zero knowledge proofs.
StarkWare
“Those are wonderful people and they're incredibly smart people. And again, they're allowing us to do amazing things with scale.”
Hoskinson likes the fact that StarkWare’s development also helps Cardano to improve its scalability. The company was co-founded by Eli Ben Sasson, who was one of Zcash’s founding scientists. Its goal is to enable on-chain scalability through the usage of zero-knowledge proofs.
Lightning Labs
“I have a lot of respect for Lightning Labs. <...> And that's a good solution, if not for scalability, for interoperability between cryptocurrencies. And they seem to be easy enough to talk to, to collaborate with, and fairly open people, good people.”
The company is building second layer solutions for the Bitcoin network. Their mission is to offer users a way to send and receive money more efficiently than ever before. Hoskinson noted that he approves of Elizabeth Stark’s specification-driven approach to development.
Dash
“I have a lot of respect for the Dash community. I think they were one of the first to really prove out a cryptocurrency treasury and show the power of a treasury. And they even sponsored research at Arizona State University with it.”
Dash is another project on Hoskinson’s list that is focused on privacy. It employs two layer consensus — with master nodes sitting on top of the proof-of-work base layer. Hoskinson believes that Dash proved “the power of a treasury”. He also has an appreciation for Dash’s community.
Tezos
“I don't really like their community too much because they're so toxic and negative towards us and they just never seem to let an opportunity kick us when we're down, escape. But overall, I do have a lot of respect for at least the philosophy and the technology that they've been deploying.”
Tezos is a proof of stake blockchain with on-chain governance. Tezos was created to provide the safety and code correctness required for assets and other high value use cases. Hoskinson praises Tezos, despite its community’s perceived toxicity towards Cardano.
Algorand
“... they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we're able to reference each other's work and learn from each other and grow from each other.”
Algorand is another proof-of-stake blockchain that was founded by Turing-award recipient, Silvio Micali. It’s main goal is to create a transparent system in which all users can achieve success via decentralization.
Avalanche
“I think Avalanche has some merit as well, especially in the IoT [Internet of Things] space in Ava is going to be an interesting coin that comes out. And there's a lot of interesting ideas there.”
Founded by another preeminent scholar, Cornell professor Emin Gün Sirer, Avalanche promises scalability and operability. Hoskinson is optimistic about Avalanche’s coin, which pays for fees and provides the basic unit of account between the multiple blockchains deployed on the larger AVA network.
Basic Attention Token
“... the growth curve and the adoption of BATs has been just phenomenal. And I think they're poised on a five or 10 years to become a major player in the very least displaced Firefox completely and potentially even have a meaningful share of the browser market, which could translate to billions of dollars of advertising revenue that's not connected to, you know, the cartels that exist and allow people to avoid being deplatformed.”
Brave browser rewards users for watching advertisements by distributing Basic Attention Tokens. Brave was founded by Brendan Eich, the creator of JavaScript and founder of the Mozilla project. Hoskinson believes that BAT has the potential to disrupt the “cartels” that control online advertising.
It is not surprising that Hoskinson, who is building Cardano with a research-first ethos and who studied number theory in school, has picked quite a few projects that both share his philosophies and focus on privacy.
submitted by eleanorcwhite to CryptoCurrencies [link] [comments]

Why Bitcoin could Fail

Below in my opinion are three legitimate reasons why Bitcoin could fail.
  1. Cryptography becomes insecure. If cryptography can be broken we're all screwed. Since 2009 people have planned for and reviewed what would happen when quantum computers come, or what would happen if computers millions of times more powerful are developed, but I'd categorize this as "known unknowns". There still remains "unknown unknowns" that could end digital security. A Black swan event or whatever you want to call it can absolutely happen, and it it could take 100 years before the puzzle makers jump ahead of the puzzle breakers again.
  2. Governments make it illegal. P2p music sharing has effectively been destroyed. The technology still exists but the rule of law and informal pressure that governments have makes it too hard for most citizens to bother. Why risk breaking the law, when a good enough alternative exists for a small fee. For those that argue that Bitcoin is not breaking any laws in the United States, that really doesn't mean anything as new laws can always be written. Anthony Scaramucci (of all people) articulated this point well on the Off The Chain Podcast. In a situation that is deemed a crisis, the United States government is going to do whatever it wants to keep citizens ""safe"".
  3. The most scary, most concerning threat to Bitcoin is apathy. What if people just don't care enough. The average person doesn't get hyped about decentralized currency. The masses care when the price goes up, but the market is a game that just can't be predicted, and it can't go up forever. To get the masses on board they pretty much have to be forced to. The world uses cell phones because the benefits are so so great even the homeless are forced to go out and obtain one. Unless new technology is a necessity, the average person does not want to jump through new hoops. There are so many products out there looking to gain a userbase, they put thousands/millions of dollars into marketing and strategy and endorsements, teams of people working round the clock to figure out "how do we please the customer" and how many of those products ultimately end up failing. There's a push and pull with Bitcoin to please the customers while at the same time remaining decentralized. How many humans are willing to work on a project and receive no money or recognition in return?
So that's what I got. Any thoughts or feedback welcome. Thanks.
submitted by Th3M0rn1ng5h0w to Bitcoin [link] [comments]

04-17 00:04 - 'Charles Hoskinson Reveals His 9 Favorite Crypto Projects' (self.Bitcoin) by /u/Guilty_Pea removed from /r/Bitcoin within 372-382min

'''
Cointelegraph recently sat down for an interview with Charles Hoskinson, who is the co-founder of Ethereum and CEO and founder of IOHK — the company developing Cardano. During that interview, Hoskinson shared details about some of the crypto projects that he is most interested in.
Ergo
“It's one of the most revolutionary cryptocurrencies ever built. Got so many crazy ideas like non-outsourceable puzzles and sigma protocols and pruning the blockchain and roller chains. All this crazy stuff. Even has a proof of no premine.”
Ergo was founded by Hoskinson’s “favorite technologist”, Alex Chepurnoy, who also contributed to the development of Cardano. It is a PoW blockchain platform with Turing complete smart contracts that employs a number of advanced features like zero-knowledge proofs, ring signatures, oracles, and adjustable block size.
ZCash
“They've advanced the entire discussion of zero knowledge cryptography. We've borrowed some of their stuff. We've innovated on some of the things.” … “They’re carrying the banner of privacy and the banner of inclusive accountability, and both of these things are incredibly important as a core.”
Zcash is a privacy coin that allows for both transparent and private transactions. Hoskinson has a lot of respect for ZCash and their work with zero knowledge proofs.
StarkWare
“Those are wonderful people and they're incredibly smart people. And again, they're allowing us to do amazing things with scale.”
Hoskinson likes the fact that StarkWare’s development also helps Cardano to improve its scalability. The company was co-founded by Eli Ben Sasson, who was one of Zcash’s founding scientists. Its goal is to enable on-chain scalability through the usage of zero-knowledge proofs.
Lightning Labs
“I have a lot of respect for Lightning Labs. <...> And that's a good solution, if not for scalability, for interoperability between cryptocurrencies. And they seem to be easy enough to talk to, to collaborate with, and fairly open people, good people.”
The company is building second layer solutions for the Bitcoin network. Their mission is to offer users a way to send and receive money more efficiently than ever before. Hoskinson noted that he approves of Elizabeth Stark’s specification-driven approach to development.
Dash
“I have a lot of respect for the Dash community. I think they were one of the first to really prove out a cryptocurrency treasury and show the power of a treasury. And they even sponsored research at Arizona State University with it.”
Dash is another project on Hoskinson’s list that is focused on privacy. It employs two layer consensus — with master nodes sitting on top of the proof-of-work base layer. Hoskinson believes that Dash proved “the power of a treasury”. He also has an appreciation for Dash’s community.
Tezos
“I don't really like their community too much because they're so toxic and negative towards us and they just never seem to let an opportunity kick us when we're down, escape. But overall, I do have a lot of respect for at least the philosophy and the technology that they've been deploying.”
Tezos is a proof of stake blockchain with on-chain governance. Tezos was created to provide the safety and code correctness required for assets and other high value use cases. Hoskinson praises Tezos, despite its community’s perceived toxicity towards Cardano.
Algorand
“... they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we're able to reference each other's work and learn from each other and grow from each other.”
Algorand is another proof-of-stake blockchain that was founded by Turing-award recipient, Silvio Micali. It’s main goal is to create a transparent system in which all users can achieve success via decentralization.
Avalanche
“I think Avalanche has some merit as well, especially in the IoT [Internet of Things] space in Ava is going to be an interesting coin that comes out. And there's a lot of interesting ideas there.”
Founded by another preeminent scholar, Cornell professor Emin Gün Sirer, Avalanche promises scalability and operability. Hoskinson is optimistic about Avalanche’s coin, which pays for fees and provides the basic unit of account between the multiple blockchains deployed on the larger AVA network.
Basic Attention Token
“... the growth curve and the adoption of BATs has been just phenomenal. And I think they're poised on a five or 10 years to become a major player in the very least displaced Firefox completely and potentially even have a meaningful share of the browser market, which could translate to billions of dollars of advertising revenue that's not connected to, you know, the cartels that exist and allow people to avoid being deplatformed.”
Brave browser rewards users for watching advertisements by distributing Basic Attention Tokens. Brave was founded by Brendan Eich, the creator of JavaScript and founder of the Mozilla project. Hoskinson believes that BAT has the potential to disrupt the “cartels” that control online advertising.
It is not surprising that Hoskinson, who is building Cardano with a research-first ethos and who studied number theory in school, has picked quite a few projects that both share his philosophies and focus on privacy.
'''
Charles Hoskinson Reveals His 9 Favorite Crypto Projects
Go1dfish undelete link
unreddit undelete link
Author: Guilty_Pea
submitted by removalbot to removalbot [link] [comments]

Charles Hoskinson Reveals His 9 Favorite Crypto Projects

Cointelegraph recently sat down for an interview with Charles Hoskinson, who is the co-founder of Ethereum and CEO and founder of IOHK — the company developing Cardano. During that interview, Hoskinson shared details about some of the crypto projects that he is most interested in.
Ergo
“It's one of the most revolutionary cryptocurrencies ever built. Got so many crazy ideas like non-outsourceable puzzles and sigma protocols and pruning the blockchain and roller chains. All this crazy stuff. Even has a proof of no premine.”
Ergo was founded by Hoskinson’s “favorite technologist”, Alex Chepurnoy, who also contributed to the development of Cardano. It is a PoW blockchain platform with Turing complete smart contracts that employs a number of advanced features like zero-knowledge proofs, ring signatures, oracles, and adjustable block size.
ZCash
“They've advanced the entire discussion of zero knowledge cryptography. We've borrowed some of their stuff. We've innovated on some of the things.” … “They’re carrying the banner of privacy and the banner of inclusive accountability, and both of these things are incredibly important as a core.”
Zcash is a privacy coin that allows for both transparent and private transactions. Hoskinson has a lot of respect for ZCash and their work with zero knowledge proofs.
StarkWare
“Those are wonderful people and they're incredibly smart people. And again, they're allowing us to do amazing things with scale.”
Hoskinson likes the fact that StarkWare’s development also helps Cardano to improve its scalability. The company was co-founded by Eli Ben Sasson, who was one of Zcash’s founding scientists. Its goal is to enable on-chain scalability through the usage of zero-knowledge proofs.
Lightning Labs
“I have a lot of respect for Lightning Labs. <...> And that's a good solution, if not for scalability, for interoperability between cryptocurrencies. And they seem to be easy enough to talk to, to collaborate with, and fairly open people, good people.”
The company is building second layer solutions for the Bitcoin network. Their mission is to offer users a way to send and receive money more efficiently than ever before. Hoskinson noted that he approves of Elizabeth Stark’s specification-driven approach to development.
Dash
“I have a lot of respect for the Dash community. I think they were one of the first to really prove out a cryptocurrency treasury and show the power of a treasury. And they even sponsored research at Arizona State University with it.”
Dash is another project on Hoskinson’s list that is focused on privacy. It employs two layer consensus — with master nodes sitting on top of the proof-of-work base layer. Hoskinson believes that Dash proved “the power of a treasury”. He also has an appreciation for Dash’s community.
Tezos
“I don't really like their community too much because they're so toxic and negative towards us and they just never seem to let an opportunity kick us when we're down, escape. But overall, I do have a lot of respect for at least the philosophy and the technology that they've been deploying.”
Tezos is a proof of stake blockchain with on-chain governance. Tezos was created to provide the safety and code correctness required for assets and other high value use cases. Hoskinson praises Tezos, despite its community’s perceived toxicity towards Cardano.
Algorand
“... they are another one of the science coins and we all kind of support each other. Even though we get academically competitive, we're able to reference each other's work and learn from each other and grow from each other.”
Algorand is another proof-of-stake blockchain that was founded by Turing-award recipient, Silvio Micali. It’s main goal is to create a transparent system in which all users can achieve success via decentralization.
Avalanche
“I think Avalanche has some merit as well, especially in the IoT [Internet of Things] space in Ava is going to be an interesting coin that comes out. And there's a lot of interesting ideas there.”
Founded by another preeminent scholar, Cornell professor Emin Gün Sirer, Avalanche promises scalability and operability. Hoskinson is optimistic about Avalanche’s coin, which pays for fees and provides the basic unit of account between the multiple blockchains deployed on the larger AVA network.
Basic Attention Token
“... the growth curve and the adoption of BATs has been just phenomenal. And I think they're poised on a five or 10 years to become a major player in the very least displaced Firefox completely and potentially even have a meaningful share of the browser market, which could translate to billions of dollars of advertising revenue that's not connected to, you know, the cartels that exist and allow people to avoid being deplatformed.”
Brave browser rewards users for watching advertisements by distributing Basic Attention Tokens. Brave was founded by Brendan Eich, the creator of JavaScript and founder of the Mozilla project. Hoskinson believes that BAT has the potential to disrupt the “cartels” that control online advertising.
It is not surprising that Hoskinson, who is building Cardano with a research-first ethos and who studied number theory in school, has picked quite a few projects that both share his philosophies and focus on privacy.
submitted by Guilty_Pea to CryptoMarkets [link] [comments]

Bitcoin’s Security and Hash Rate Explained

Bitcoin’s Security and Hash Rate Explained
As the Bitcoin hash rate reaches new all-time highs, there’s never been a better time to discuss blockchain security and its relation to the hashing power and the Proof of Work (PoW) that feed the network. The Bitcoin system is based on a form of decentralized trust, heavily relying on cryptography. This makes its blockchain highly secure and able to be used for financial transactions and other operations requiring a trustless ledger.
Far from popular belief, cryptography dates back to thousands of years ago. The same root of the word encryption — crypt — comes from the Greek word ‘kryptos’, meaning hidden or secret. Indeed, humans have always wanted to keep some information private. The Assyrians, the Chinese, the Romans, and the Greeks, they all tried over the centuries to conceal some information like trade deals or manufacturing secrets by using symbols or ciphers carved in stone or leather. In 1900 BC, Egyptians used hieroglyphics and experts often refer to them as the first example of cryptography.
Back to our days, Bitcoin uses cryptographic technologies such as:
  1. Cryptographic hash functions (i.e. SHA-256 and RIPEMD-160)
  2. Public Key Cryptography (i.e. ECDSA — the Elliptic Curve Digital Signature Algorithm)
While Public Key Cryptography, bitcoin addresses, and digital signatures are used to provide ownership of bitcoins, the SHA-256 hash function is used to verify data and block integrity and to establish the chronological order of the blockchain. A cryptographic hash function is a mathematical function that verifies the integrity of data by transforming it into a unique unidentifiable code.
Here is a graphic example to make things more clear:

– Extract from the MOOC (Massive Open Online Course) in Digital Currencies at the University of Nicosia.
Furthermore, hash functions are used as part of the PoW algorithm, which is a prominent part of the Bitcoin mining algorithm and this is what is of more interest to understand the security of the network. Mining creates new bitcoins in each block, almost like a central bank printing new money and creates trust by ensuring that transactions are confirmed only when enough computational power is devoted to the block that contains them. More blocks mean more computation, which means more trust.
With PoW, miners compete against each other to complete transactions on the network and get rewarded. Basically they need to solve a complicated mathematical puzzle and a possibility to easily prove the solution. The more hashing power, the higher the chance to resolve the puzzle and therefore perform the proof of work. In more simple words, bitcoins exist thanks to a peer to peer network that helps validate transactions in the ledger and provides enough trust to avoid that a third party is involved in the process. It also exists because miners give it life by resolving that computational puzzle, through the mining reward incentive they are receiving.
For more info, contact Block.co directly or email at [email protected].
Tel +357 70007828
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submitted by BlockDotCo to u/BlockDotCo [link] [comments]

We have launched our Cosmos #fuckgoogle validator. Join us and stake! (our reasons for doing so included)

As we have promised we have launched our Cosmos validator.

We are starting small, but are committed to our promises. To secure the network and to support in all possible to us ways. We weren't meant to launch it until next year, but we decided that now is a good time to do it.

In this post I would like to share some of our value propositions and why you should stake with us:

The first 3 points are monotonous, but I assume are vital. They are related to the experience of our team:

1) We are an experienced and professional team. 3 of our team members have each, over 5 years of experience working with blockchain projects and launching blockchain projects that had capitalization of up to 80 mil USD, large user bases and constant transactional flow.

2) We have vast experience in understanding of Cosmos. Some of us have invested and followed Tendermint for many years. We are always trying to help by developing useful software and participating in testing new soft.

3) We have been analyzing blockchains since 2014! Not just Bitcoin, but other technologies. We understand the deep beneath the work of the engine of the beast that are distributed technologies.

The following is our main reasoning behind launching our Cosmos validator:

1) We believe in shaping and building the new Great Web. We believe this is essential for the coming generations and that this world, alas, is already broken. The only way to fix this - to build a new metaverse.

2) We believe that Tendermint is a core piece of the puzzle in the new Great Web, hence we develop our project with the help of Tendermint and are committed to developing the ecosystem (technically and financially).

3) Our manifests, research.md) and other ideas aren't just words to us. We live those ideas and are trying to make everything we can to make this world a more decentralised place.

4) A while ago, I wrote this article. In it, I have outlined my personal view of why this world is developing unnaturally and why it needs a change and MOST importantly HOW to achieve this change.

5) We are building not just another blockchain. Our idea is to overthrow the monopolized tyrannic powers of the services that centralize the modern metaverse. We want to see innovation. Intergalactic communication of species backed by cryptography and a world without borders. We know that our project can help to shape the two most important things to achieve this: knowledge and fair communication between species.

6) As Jae Kwon rightly pointed out, the world is on fire. We need to do something about it, not just talk. We view that creating decentralized innovation is the only way to extinguish that fire. To give a fresh breath of air to the so much needed choking from smoke digital space, which we all already live in. Our digital print is no less, but our soul, that has the right to be free, express its thoughts and communicate freely!

This is our stance. We believe that together, we can build a better future!

Don’t believe, don’t fear, don’t ask!

#fuckgoogle
submitted by serejandmyself to cosmosnetwork [link] [comments]

one way hashing vs encryption/decryption on bitcoin

i've studied bitcoin transactions, and i often see people make a distinction between one way "trap door" hashes which are verifiable using public key, but not decryptable, and encryption which is decryptable.
when is encryption/decryption utilized in Bitcoin? is it just one way hashing everywhere, or are there some places where messages or signatures or anything else can be decrypted?

submitted by sonicraf to Bitcoin [link] [comments]

Bitcoin mining is a bit more than just number crunching

The charming cryptocurrency and the many ideas that surface in the minds of the observers typically surround couple of apparent concerns - how does it enter being and what about its flow? The response, nevertheless, is uncomplicated. Bitcoins need to be mined, in order to make the cryptocurrency exist in the Bitcoin market. The mystical developer of Bitcoin, Satoshi Nakamoto, imagined a method to exchange the important cryptocurrencies online, by getting rid of the need for any central organization. For Bitcoins, there's an alternative method to hold the essential records of the deal history of the whole blood circulation, and all this is handled through a decentralized way.
The journal that helps with the procedure is called the "blockchain". The essence of this journal may need lots of newsprint for appearing frequently at all popular Bitcoin news. Blockchain broadens every minute, existing on the makers associated with the big Bitcoin network. Individuals might question the credibility, even credibility, of these deals and their recordings into Blockchain. This too is nevertheless warranted, through the procedure of Bitcoin mining. Mining allows production of brand-new Bitcoin and assembling deals to the journal. Mining basically involves fixing of complex mathematical estimations, and the miners utilize enormous computing power to resolve it. The private or 'swimming pool' that resolves the puzzle, positions the subsequent block and wins a benefit too. And, how mining can prevent double-spending? Practically every 10 minutes, impressive deals are mined into a block. So, any disparity or illegitimacy is entirely dismissed.
For Bitcoins, mining is not mentioned in a conventional sense of the term. Bitcoins are mined by using cryptography. A hash function described as "double SHA-256" is used. However how tough is it to mine Bitcoins? This can be another inquiry. This depends a lot on the effort and computing power being used into mining. Another element worth pointing out is the software application procedure. For each 2016 blocks, problem involved in mining of Bitcoins is changed by itself just to keep the procedure. In turn, the rate of block generation is kept constant. A Bitcoin problem chart is an ideal procedure to show the mining trouble in time. The trouble level changes itself to increase or down in a straight proportional way, depending upon the computational power, whether it's being sustained or removed. As the variety of miners increase, portion of revenues been worthy of by the individuals decrease, everybody winds up with smaller sized pieces of the revenues.
Having private economies and neighborhoods, cryptocurrencies like Dogecoin, Namecoin or Peercoin, are called Altcoins. You can easily track your different cryptocurrency by using reputable portfolio trackers.These are options to Bitcoin. Practically like Bitcoins, these 'cousins' do have a substantial fan-following and enthusiasts who are eager to take a deep plunge into the big ocean and start to mine it. Algorithms used for Altcoin mining are either SHA-256 or Scrypt. Numerous other ingenious algorithms exist too. Alleviate, price and simpleness can render it possible to mine Altcoins on a PC or by using unique mining software application. Altcoins are a bit 'down to earth' compared to Bitcoins, yet changing them into huge dollars is a little challenging. Cryptocurrency enthusiasts can simply hope, if a few of them might witness the comparable huge popularity!
submitted by Katherine4512 to BitcoinBasic [link] [comments]

If you think you missed out on the internet craze then give Cryptocurrency a shot!

If You Idea You Missed Out On The Web Earnings Transformation Attempt CryptoCurrency
When the majority of people consider cryptocurrency they may too be considering puzzling currency. Really couple of individuals appear to understand what it is and for some factor everybody appears to be speaking about it as if they do. This report will ideally debunk all the elements of cryptocurrency so that by the time you're ended up reading you will have a respectable concept of what it is and what it's everything about.
You might discover that cryptocurrency is for you or you might not however a minimum of you'll have the ability to talk with a degree of certainty and understanding that others will not have.
There are lots of people who have actually currently reached millionaire status by handling cryptocurrency. Plainly there's a great deal of cash in this brand name brand-new market.
Cryptocurrency is electronic currency, brief and easy. Nevertheless, what's not so brief and basic is precisely how it comes to have worth. Check out our guide on how to sell btc to figure out how you can turn that beloved coin into cold hard cash.
Cryptocurrency is a digitized, virtual, decentralized currency produced by the application of cryptography, which, according to Merriam Webster dictionary, is the "digital encoding and decoding of info". Cryptography is the structure that makes debit cards, computer system banking and eCommerce systems possible.
Cryptocurrency isn't backed by banks; it's not backed by a federal government, however by an exceptionally complex plan of algorithms. Cryptocurrency is electrical power which is encoded into complicated strings of algorithms. What provides financial worth is their complexity and their security from hackers. The manner in which crypto currency is made is merely too hard to replicate.
Cryptocurrency remains in direct opposition to what is called fiat cash. Fiat cash is currency that gets its worth from federal government judgment or law. The dollar, the yen, and the Euro are all examples. Any currency that is specified as legal tender is fiat cash.
Unlike fiat cash, another part of what makes crypto currency important is that, like a product such as silver and gold, there's just a limited quantity of it. Just 21,000,000 of these very complicated algorithms were produced. No more, no less. It can't be changed by printing more of it, like a federal government printing more cash to pump up the system without support. Or by a bank changing a digital journal, something the Federal Reserve will advise banks to do to change for inflation.
Cryptocurrency is a method to acquire, offer, and invest that totally prevents both federal government oversight and banking systems tracking the motion of your cash. In a world economy that is destabilized, this system can end up being a steady force.
Cryptocurrency likewise offers you a good deal of privacy. Regrettably this can result in abuse by a criminal aspect utilizing crypto currency to their own ends simply as routine cash can be misused. Nevertheless, it can likewise keep the federal government from tracking your every purchase and attacking your individual privacy.
Cryptocurrency can be found in many kinds. Bitcoin was the very first and is the requirement from which all other cryptocurrencies pattern themselves. All are produced by careful alpha-numerical calculations from a complex coding tool. Some other cryptocurrencies are Litecoin, Namecoin, Peercoin, Dogecoin, and Worldcoin, among others. These are called altcoins as a generalized name. The costs of each are controlled by the supply of the particular cryptocurrency and the need that the marketplace has for that currency.
The method cryptocurrency is brought into presence is rather interesting. Unlike gold, which needs to be mined from the ground, cryptocurrency is simply an entry in a virtual journal which is saved in different computer systems all over the world. These entries need to be 'mined' utilizing mathematical algorithms. Private users or, most likely, a group of users run computational analysis to discover specific series of information, called blocks. The 'miners' discover information that produces a specific pattern to the cryptographic algorithm. At that point, it's used to the series, and they have actually discovered a block. After a comparable information series on the block compares with the algorithm, the block of information has actually been unencrypted. The miner gets a benefit of a particular quantity of cryptocurrency. As time goes on, the quantity of the benefit reduces as the cryptocurrency ends up being scarcer. Contributing to that, the intricacy of the algorithms in the look for brand-new blocks is likewise increased. Computationally, it ends up being more difficult to discover a coordinating series. Both of these circumstances come together to reduce the speed in which cryptocurrency is produced. This mimics the trouble and deficiency of mining a product like gold.
Now, anybody can be a miner. The pioneers of Bitcoin made the mining tool open source, so it's totally free to anybody. Nevertheless, the computer systems they utilize run 24 hr a day, 7 days a week. The algorithms are exceptionally intricate and the CPU is running complete tilt. Numerous users have actually specialized computer systems made particularly for mining cryptocurrency. Both the user and the specialized computer system are called miners.
Miners (the human ones) likewise keep journals of deals and serve as auditors, so that a coin isn't replicated in any method. This keeps the system from being hacked and from running amok. They're spent for this work by getting brand-new cryptocurrency weekly that they preserve their operation. They keep their cryptocurrency in specialized files on their computer systems or other individual gadgets. These files are called wallets.
submitted by AccomplishedWelder4 to cryptochat [link] [comments]

How Ethereum block rewards work — part 1

How Ethereum block rewards work — part 1
In 2Ether, block rewards are dynamic. How much a miner receives for finding a new block depends on the block height, current market price, and the miner’s hashrate. We believe it’s a much fairer model compared to what Ethereum and Bitcoin use now. But before we can explain our block rewards, we need to look at how they work in Ethereum.
As you know, blockchain transactions are grouped into blocks. Miners confirm transactions, and once a certain number is collected, a new block is formed. The maximum size of a block is limited. For Bitcoin, the max size is 1 MB per block, but the number of transactions in it depend on how many bytes each contains. In April 2019, the average number of Bitcoin operations per block reached a record value of 2700 per block.
In Ethereum, it’s not the size of a block is limited but the amount of gas. There is no obligatory gas value you have to pay for a transaction, but the higher value you set, the faster it’s processed. The standard amount for a simple payment is 21 000 gas. The gas paid by all users is calculated in a growing total, and once it reaches the maximum, the block is finished. In Ethereum, most blocks have between 170 and 250 transactions, and the current gas limit is around 10 000 000 gas.
To add the block to the blockchain, miners need to solve a cryptography puzzle. It’s not a puzzle designed for humans, though: it can only be solved by a machine following a certain algorithm. ASIC chips are particularly good at this. Whoever finds the correct solution first gets to append the block to the chain and reap the reward.
It often happens that two different miners solve for the same block at the same time and both try to add it to the chain. The two blocks contain the same transactions, they are both mined properly, so nobody can be penalize for any wrongdoing. However, only one can be added. Which miner wins is decided by a consensus of nodes. The rejected block is called an orphan in Bitcoin and an uncle (or ommer) in Ethereum. Since Ethereum blocks take just 15–20 seconds, uncles appear quite often. Sometimes miners even start building the chain on an uncle block, though such a secondary chain is soon abandoned.
Bitcoin doesn’t reward miners who produce orphan blocks, but Ethereum does have a reward for uncles, even if it’s smaller than an average block reward. For the first uncle block, it’s 1/8 less than the full reward. Currently miners get 2 ETH per a normal block, so they receive 1.75 ETH for an uncle. For anyone who continues to build on the uncle chain, the reward for each new block will progressively decrease. That’s why miners tend to abandon such chains once they realized what happened. This is a handy mechanism used by Ethereum to avoid the blockchain turning into a tree with many competing branches.
The ether earned by miners as block rewards is the only way new ETH can enter the market. In other words, it’s the source of inflation. How fast the ETH supply grows, however, can change with each hard fork. In our next instalment, we’ll see how ETH block rewards changed through time — and why it’s such a source of controversy.

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There never was a "scaling problem." The only problem is "people that don't want Bitcoin to scale."

This is a necessarily long post that seeks to undo a major misunderstanding and help people to understand what happened to Bitcoin and why we have Bitcoin Cash.
I frequently get asked, "how will Bitcoin Cash solve Bitcoin's fundamental scaling problem?"
The idea that Bitcoin has some fundamental scaling problem is a misunderstanding as old as Bitcoin itself.
Check out this email exchange in 2008 between Satoshi and Mike Hearn > James Donald. Mike James has already spotted the "scaling problem" and points it out to Satoshi:
To detect and reject a double spending event in a timely manner, one must have most past transactions of the coins in the transaction, which, naively implemented, requires each peer to have most past transactions, or most past transactions that occurred recently. If hundreds of millions of people are doing transactions, that is a lot of bandwidth
There it is. "Naively implemented" Bitcoin would require everyone to keep a record of all transactions - ie "everyone must run a full node."
Satoshi corrects him:
Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification (section 8) to check for double spending, which only requires having the chain of block headers, or about 12KB per day.
Aha! There is no real need for individuals to keep a copy of all transactions. Which makes sense - who wants to keep a copy of everyone else's transactions just to buy a coffee?
But who can be trusted to keep our transactions? Satoshi answers on the next line:
Only people trying to create new coins would need to run network nodes.
There it is folks.
Miners - y'know, the ones currently getting paid $150K every ten minutes - have both the incentives and the means to maintain the blockchain, without which the goose that lays their digital-gold eggs will die.
Businesses also need to maintain copies of the blockchain for audit and systems integration purposes among others.
So what's the scaling "problem?" Once we take end-users mostly out of the equation, it's clear that the technology is easily capable of scaling this design up to extremely high throughput. Understanding this was key to my getting involved in Bitcoin in the first place! With modest hardware current versions of Bitcoin Cash are already capable of "Paypal levels" of scaling, already 20-30X more than Bitcoin Segwit, and by next year I think we'll see another 10X on top of that. That vastly exceeds even our rosiest 2-3 year capacity requirements.
There isn't a "scaling problem." It just doesn't exist. The "scaling problem" is really an "adoption opportunity" since there's abundant cheap capacity just lying around asking for businesses to build stuff on it.
No. There's no scaling problem at all. The only problem that exists is "people that don't want Bitcoin to scale."
There are several classes of these people.
  1. is a group who believes that larger blocks will cause fatal mining centralization. The problem with this belief is that the cost to store and transmit blockchain data is a tiny fraction of the cost to mine. Most of the costs to mining are electricity consumption, plant, property, mining equipment, and personnel. Storage for a year's worth of totally-full 32MB "paypal level" blocks is roughly $100 in today's prices and coming down all the time. But the cost to actually reliably mine a Bitcoin block is (edit: tens-to-) hundreds of thousands of dollars per day. Storage and data transmission don't even enter into the equation. Others point to the orphaning problem inherent in relaying large blocks but this is essentially erased by xthin blocks and miners being on an ultrafast network. In short the idea that bigger blocks will cause mining centralization is total speculation and could in fact be dead wrong.
  2. another group believes that larger blocks will centralize "nonmining full nodes." First off, as long as mining is reasonably decentralized, it is unclear that there is any network requirement for there to be "non mining full nodes" - people would only run these when they had some need for all the world's transaction data. Past that, it is true that the costs to transmit and store the blockchain go up as blocks get larger, all other things held equal. However, the costs remain minimal to a business - $100 to store a year's worth of always-full 32MB blocks is simply not a barrier to entry for any business. And as Satoshi pointed out, individuals really have no need to keep a copy of all the world's transactions just to use the system. Without going into great detail it's my opinion that many people who worry about "full node centralization" are simply victims of censorship and community manipulation. Here's a great article on how "full nodes" that don't mine are a tiny piece of the decentralization puzzle.
  3. a third group of people who don't want Bitcoin to scale are essentially here to harm Bitcoin or move its value elsewhere. If Bitcoin can't work as intended as P2P cash, then that's terrific news for legacy banking. It's also great news for Ethereum, Monero, Dash, and everyone else who has a coin that does work as P2P cash - all forms of "off chain scaling" (the demand moves off the Bitcoin chain). Lightning Network is also a form of "off chain scaling" that ultimately could harm onchain security by moving transaction value off of the blockchain. In short, anything that aims to "scale" by moving value off the blockchain onto another chain or layer benefits from ensuring that onchain Bitcoin cannot scale.
A word needs to be added about so-called "offchain" or "L2" scaling.
"Offchain scaling" is like "scaling" an underground metro by never adding new lines, trains, or cars so that when demand increases, people walk or ride in surface taxis instead (edit: then going into the cab business!). The only way to scale the subway is to put more people on more subway trains.
So to repeat, it is clear to many people that there exists no "scaling problem." The only problem that exists are people who don't want to add more capacity.
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CRYPTOCURRENCY BITCOIN

CRYPTOCURRENCY BITCOIN
Bitcoin Table of contents expand: 1. What is Bitcoin? 2. Understanding Bitcoin 3. How Bitcoin Works 4. What's a Bitcoin Worth? 5. How Bitcoin Began 6. Who Invented Bitcoin? 7. Before Satoshi 8. Why Is Satoshi Anonymous? 9. The Suspects 10. Can Satoshi's Identity Be Proven? 11. Receiving Bitcoins As Payment 12. Working For Bitcoins 13. Bitcoin From Interest Payments 14. Bitcoins From Gambling 15. Investing in Bitcoins 16. Risks of Bitcoin Investing 17. Bitcoin Regulatory Risk 18. Security Risk of Bitcoins 19. Insurance Risk 20. Risk of Bitcoin Fraud 21. Market Risk 22. Bitcoin's Tax Risk What is Bitcoin?
Bitcoin is a digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity is yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.
Understanding Bitcoin Bitcoin is a type of cryptocurrency: Balances are kept using public and private "keys," which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key (comparable to a bank account number) serves as the address which is published to the world and to which others may send bitcoins. The private key (comparable to an ATM PIN) is meant to be a guarded secret and only used to authorize Bitcoin transmissions. Style notes: According to the official Bitcoin Foundation, the word "Bitcoin" is capitalized in the context of referring to the entity or concept, whereas "bitcoin" is written in the lower case when referring to a quantity of the currency (e.g. "I traded 20 bitcoin") or the units themselves. The plural form can be either "bitcoin" or "bitcoins."
How Bitcoin Works Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as "miners," are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million. One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi. If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places. Bitcoin mining is the process through which bitcoins are released to come into circulation. Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain and receiving a reward in the form of a few bitcoins. The block reward was 50 new bitcoins in 2009; it decreases every four years. As more and more bitcoins are created, the difficulty of the mining process – that is, the amount of computing power involved – increases. The mining difficulty began at 1.0 with Bitcoin's debut back in 2009; at the end of the year, it was only 1.18. As of February 2019, the mining difficulty is over 6.06 billion. Once, an ordinary desktop computer sufficed for the mining process; now, to combat the difficulty level, miners must use faster hardware like Application-Specific Integrated Circuits (ASIC), more advanced processing units like Graphic Processing Units (GPUs), etc.
What's a Bitcoin Worth? In 2017 alone, the price of Bitcoin rose from a little under $1,000 at the beginning of the year to close to $19,000, ending the year more than 1,400% higher. Bitcoin's price is also quite dependent on the size of its mining network since the larger the network is, the more difficult – and thus more costly – it is to produce new bitcoins. As a result, the price of bitcoin has to increase as its cost of production also rises. The Bitcoin mining network's aggregate power has more than tripled over the past twelve months.
How Bitcoin Began
Aug. 18, 2008: The domain name bitcoin.org is registered. Today, at least, this domain is "WhoisGuard Protected," meaning the identity of the person who registered it is not public information.
Oct. 31, 2008: Someone using the name Satoshi Nakamoto makes an announcement on The Cryptography Mailing list at metzdowd.com: "I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party. The paper is available at http://www.bitcoin.org/bitcoin.pdf." This link leads to the now-famous white paper published on bitcoin.org entitled "Bitcoin: A Peer-to-Peer Electronic Cash System." This paper would become the Magna Carta for how Bitcoin operates today.
Jan. 3, 2009: The first Bitcoin block is mined, Block 0. This is also known as the "genesis block" and contains the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks," perhaps as proof that the block was mined on or after that date, and perhaps also as relevant political commentary.
Jan. 8, 2009: The first version of the Bitcoin software is announced on The Cryptography Mailing list.
Jan. 9, 2009: Block 1 is mined, and Bitcoin mining commences in earnest.
Who Invented Bitcoin?
No one knows. Not conclusively, at any rate. Satoshi Nakamoto is the name associated with the person or group of people who released the original Bitcoin white paper in 2008 and worked on the original Bitcoin software that was released in 2009. The Bitcoin protocol requires users to enter a birthday upon signup, and we know that an individual named Satoshi Nakamoto registered and put down April 5 as a birth date. And that's about it.
Before Satoshi
Though it is tempting to believe the media's spin that Satoshi Nakamoto is a solitary, quixotic genius who created Bitcoin out of thin air, such innovations do not happen in a vacuum. All major scientific discoveries, no matter how original-seeming, were built on previously existing research. There are precursors to Bitcoin: Adam Back’s Hashcash, invented in 1997, and subsequently Wei Dai’s b-money, Nick Szabo’s bit gold and Hal Finney’s Reusable Proof of Work. The Bitcoin white paper itself cites Hashcash and b-money, as well as various other works spanning several research fields.
Why Is Satoshi Anonymous?
There are two primary motivations for keeping Bitcoin's inventor keeping his or her or their identity secret. One is privacy. As Bitcoin has gained in popularity – becoming something of a worldwide phenomenon – Satoshi Nakamoto would likely garner a lot of attention from the media and from governments.
The other reason is safety. Looking at 2009 alone, 32,489 blocks were mined; at the then-reward rate of 50 BTC per block, the total payout in 2009 was 1,624,500 BTC, which at today’s prices is over $900 million. One may conclude that only Satoshi and perhaps a few other people were mining through 2009 and that they possess a majority of that $900 million worth of BTC. Someone in possession of that much BTC could become a target of criminals, especially since bitcoins are less like stocks and more like cash, where the private keys needed to authorize spending could be printed out and literally kept under a mattress. While it's likely the inventor of Bitcoin would take precautions to make any extortion-induced transfers traceable, remaining anonymous is a good way for Satoshi to limit exposure.
The Suspects
Numerous people have been suggested as possible Satoshi Nakamoto by major media outlets. Oct. 10, 2011, The New Yorker published an article speculating that Nakamoto might be Irish cryptography student Michael Clear or economic sociologist Vili Lehdonvirta. A day later, Fast Company suggested that Nakamoto could be a group of three people – Neal King, Vladimir Oksman and Charles Bry – who together appear on a patent related to secure communications that were filed two months before bitcoin.org was registered. A Vice article published in May 2013 added more suspects to the list, including Gavin Andresen, the Bitcoin project’s lead developer; Jed McCaleb, co-founder of now-defunct Bitcoin exchange Mt. Gox; and famed Japanese mathematician Shinichi Mochizuki.
In December 2013, Techcrunch published an interview with researcher Skye Grey who claimed textual analysis of published writings shows a link between Satoshi and bit-gold creator Nick Szabo. And perhaps most famously, in March 2014, Newsweek ran a cover article claiming that Satoshi is actually an individual named Satoshi Nakamoto – a 64-year-old Japanese-American engineer living in California. The list of suspects is long, and all the individuals deny being Satoshi.
Can Satoshi's Identity Be Proven?
It would seem even early collaborators on the project don’t have verifiable proof of Satoshi’s identity. To reveal conclusively who Satoshi Nakamoto is, a definitive link would need to be made between his/her activity with Bitcoin and his/her identity. That could come in the form of linking the party behind the domain registration of bitcoin.org, email and forum accounts used by Satoshi Nakamoto, or ownership of some portion of the earliest mined bitcoins. Even though the bitcoins Satoshi likely possesses are traceable on the blockchain, it seems he/she has yet to cash them out in a way that reveals his/her identity. If Satoshi were to move his/her bitcoins to an exchange today, this might attract attention, but it seems unlikely that a well-funded and successful exchange would betray a customer's privacy.
Receiving Bitcoins As Payment
Bitcoins can be accepted as a means of payment for products sold or services provided. If you have a brick and mortar store, just display a sign saying “Bitcoin Accepted Here” and many of your customers may well take you up on it; the transactions can be handled with the requisite hardware terminal or wallet address through QR codes and touch screen apps. An online business can easily accept bitcoins by just adding this payment option to the others it offers, like credit cards, PayPal, etc. Online payments will require a Bitcoin merchant tool (an external processor like Coinbase or BitPay).
Working For Bitcoins
Those who are self-employed can get paid for a job in bitcoins. There are several websites/job boards which are dedicated to the digital currency:
Work For Bitcoin brings together work seekers and prospective employers through its websiteCoinality features jobs – freelance, part-time and full-time – that offer payment in bitcoins, as well as Dogecoin and LitecoinJobs4Bitcoins, part of reddit.comBitGigs
Bitcoin From Interest Payments
Another interesting way (literally) to earn bitcoins is by lending them out and being repaid in the currency. Lending can take three forms – direct lending to someone you know; through a website which facilitates peer-to-peer transactions, pairing borrowers and lenders; or depositing bitcoins in a virtual bank that offers a certain interest rate for Bitcoin accounts. Some such sites are Bitbond, BitLendingClub, and BTCjam. Obviously, you should do due diligence on any third-party site.
Bitcoins From Gambling
It’s possible to play at casinos that cater to Bitcoin aficionados, with options like online lotteries, jackpots, spread betting, and other games. Of course, the pros and cons and risks that apply to any sort of gambling and betting endeavors are in force here too.
Investing in Bitcoins
There are many Bitcoin supporters who believe that digital currency is the future. Those who endorse it are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. Although it is not itself any backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.
In March 2014, the IRS stated that all virtual currencies, including bitcoins, would be taxed as property rather than currency. Gains or losses from bitcoins held as capital will be realized as capital gains or losses, while bitcoins held as inventory will incur ordinary gains or losses.
Like any other asset, the principle of buying low and selling high applies to bitcoins. The most popular way of amassing the currency is through buying on a Bitcoin exchange, but there are many other ways to earn and own bitcoins. Here are a few options which Bitcoin enthusiasts can explore.
Risks of Bitcoin Investing
Though Bitcoin was not designed as a normal equity investment (no shares have been issued), some speculative investors were drawn to the digital money after it appreciated rapidly in May 2011 and again in November 2013. Thus, many people purchase bitcoin for its investment value rather than as a medium of exchange.
However, their lack of guaranteed value and digital nature means the purchase and use of bitcoins carries several inherent risks. Many investor alerts have been issued by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau (CFPB), and other agencies.
The concept of a virtual currency is still novel and, compared to traditional investments, Bitcoin doesn't have much of a long-term track record or history of credibility to back it. With their increasing use, bitcoins are becoming less experimental every day, of course; still, after eight years, they (like all digital currencies) remain in a development phase, still evolving. "It is pretty much the highest-risk, highest-return investment that you can possibly make,” says Barry Silbert, CEO of Digital Currency Group, which builds and invests in Bitcoin and blockchain companies.
Bitcoin Regulatory Risk
Investing money into Bitcoin in any of its many guises is not for the risk-averse. Bitcoins are a rival to government currency and may be used for black market transactions, money laundering, illegal activities or tax evasion. As a result, governments may seek to regulate, restrict or ban the use and sale of bitcoins, and some already have. Others are coming up with various rules. For example, in 2015, the New York State Department of Financial Services finalized regulations that would require companies dealing with the buy, sell, transfer or storage of bitcoins to record the identity of customers, have a compliance officer and maintain capital reserves. The transactions worth $10,000 or more will have to be recorded and reported.
Although more agencies will follow suit, issuing rules and guidelines, the lack of uniform regulations about bitcoins (and other virtual currency) raises questions over their longevity, liquidity, and universality.
Security Risk of Bitcoins
Bitcoin exchanges are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. If a thief gains access to a Bitcoin owner's computer hard drive and steals his private encryption key, he could transfer the stolen Bitcoins to another account. (Users can prevent this only if bitcoins are stored on a computer which is not connected to the internet, or else by choosing to use a paper wallet – printing out the Bitcoin private keys and addresses, and not keeping them on a computer at all.) Hackers can also target Bitcoin exchanges, gaining access to thousands of accounts and digital wallets where bitcoins are stored. One especially notorious hacking incident took place in 2014, when Mt. Gox, a Bitcoin exchange in Japan, was forced to close down after millions of dollars worth of bitcoins were stolen.
This is particularly problematic once you remember that all Bitcoin transactions are permanent and irreversible. It's like dealing with cash: Any transaction carried out with bitcoins can only be reversed if the person who has received them refunds the