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.submitted by BlockDotCo to u/BlockDotCo [link] [comments]
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:
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.
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University of Nicosia, MSc in digital currency . 01. Miners . Miner’s can’t disagree between them for long, lest they risk . huge loses . 02. Users/holders . User and holder “consensus” objectifies the subjective data we have from the whole ecosystem as the . exchange rate. (Mises) 03. Developers . Developers can disagree, but they ... He is a teaching fellow with the University of Nicosia, serves on the Oversight Committee for the Bitcoin Reference Rate at the Chicago Mercantile Exchange, and has appeared as an expert witness in hearings around the world, including the Australian Senate Banking Committee and the Canadian Senate Commerce, Banking and Finance Committee. Students of the world's first graduate program in digital currency become the first graduating class, ready to craft solutions facing blockchain industry. Strong business development professional with a Business focused in International Business Management (MBA) from Girne American University. Professional Bitcoin Miner in various Cloud Mining providers, Cryptocurrency trader and Cryptocurrency expert. Advanced knowledge on Cryptocurrency Business and Consumer Behavior in Cryptocurrency Market. Bitcoin’s Miner Outflow Multiple shows that buoyant miners are keeping their coins and weaker players have none left to sell, argues Tuur Demeester. Bitcoin ( BTC ) miners are setting up a bullish trend despite large sell-offs around the halving, a new data metric suggests.
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