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Blockchains are the Foundation for Cyber Currencies

Most have heard of Bitcoin but don’t really understand it. Most have not heard of blockchains and yet, they are the underlying foundation of Bitcoin and other cyber coins. Cyber coins are virtual money tokens and intuitively seem unreliable because they are not backed up by anything similar to the gold standard. The gold standard […]

Cyber Currency – part 5/5 – Summary

SUMMARY A Market example: (our friendly neighborhood farmers market) Barter – direct exchange of goods works well at a small scale, but has limits Limited to a specific time and place No means for deferred payments Dividing some items is difficult or impossible No means for storing value Market example: we decide to create our […]

Cyber Currency – part 4/5 – Mining and Coins

MINING The purpose of mining Production of a cryptographic journal Time delay and proof of work that serves to prevent counterfeiting Currency expansion by creating new coin as mining rewards Process A request for a new block is issued There is a block calculation competition by miners After a competition has been won, the new […]

Cyber Currency – part 3/5 – Blockchain

Cyber Currency - part 3/5 - Blockchain

BLOCKCHAIN A digital ledger or journal of transactions (database) Cryptographic in nature (encrypted) A shared database with write permissions for everybody Validity of transactions is determined cryptographically instead of by a central authority Cryptographic nature Each transaction is combined with the hash value from the previous transaction and a new hash value is calculated Tamper […]

Cyber Currency – part 2/5 – Hashing Algorithms

Cyber Currency - part 2/5 - Hashing Algorithms

HASHING ALGORITHMS Hash = one way encryption Uses a mathematical formula (or algorithm) Maps data of variable size to a unique fixed length string Outputs a string called the “hash” or “digest” The same input always produces the same output It cannot be reversed (cryptographic) There are no collisions (no duplicates from different inputs) Hashing […]

Cyber Currency – part 1/5 – Currency Basics

CURRENCY BASICS Barter systems: Involve direct exchange of goods and services Have no intermediate token like money There are some difficulties: The barter process needs a coincidence of two exchange partners (same time, same place) Some trading goods cannot be easily divided into small parts Deferred payments are problematic Storing wealth is not practical Establishing […]

Crypto Banking

Crypto Currency or “cyber coins” are terms describing tokens of credit backed up by blockchain journals. A blockchain is a list of journal entries that contain a timestamp and a calculation based on the previous entry. The calculations are computationally intensive on purpose and provide a tamper-proof form of journal which is published and distributed. […]

Cyber Coins Can Replace All Currency Forms

Cyber currency is a form of money that is based on a cybernetic journalling system. Most current forms of currency are no longer based on something like a rare and valuable metal (gold or silver), but the trust that the national economy underlying the currency is solid and reliable. We need to have the confidence […]

Journal Signatures Use Merkle Trees of Hashes

In the world of business transactions, there is a constant need to maintain logs or journals of transaction history. These journals need to be able to be validated for their integrity over time and they often need to be publicly available. Here are some examples of common transaction journals: Monthly bank statement for checking or […]

History of Crypto-Currency

In October of 2008, Satoshi Nakamoto (presumably a psuedonym) published a paper proposing the use of a peer to peer network doing “proof-of-work” calculations to establish a form of electronic cash. This became known as BITCOIN. All fiat currencies rely on some form of trust to maintain stability. This trust is often based on a […]