Blockchain is a technology that was initially developed for Bitcoin, the cryptocurrency.
Bitcoin consists of:
• A de-centralized peer-to-peer network (the bitcoin protocol);
• A public transaction ledger (the blockchain);
Transactions are the most important part of the bitcoin system. Everything else in bitcoin is designed to ensure that transactions can be created, propagated on the network, validated, and finally added to the global ledger of transactions, the blockchain.
• A de-centralized mathematical and deterministic currency issuance (distributed mining), and;
• A de-centralized transaction verification system (transaction script).
Unlike traditional currencies, bitcoins are entirely virtual. There are no physical coins or even digital coins per se.
The coins are implied in transactions which transfer value from sender to recipient.
The key innovation was to use a distributed computation system (called a “Proof-Of-Work” algorithm) allowing the de-centralized network to arrive at consensus about history of the state of all transactions.
Users of bitcoin own keys which allow them to prove ownership of transactions in the bitcoin network, unlocking the value to spend it and transfer it to a new recipient.
Ownership of bitcoin is established through digital keys, bitcoin addresses and digital signatures. The digital keys are not actually stored in the network, but are instead created and stored by end-users in a file, or simple database, called a wallet.
A bitcoin address is a string of digits and characters that can be shared with anyone who wants to send you money.
To send money across the network you need a special key.
A randomly generated private key shown in hexadecimal format
(256 binary digits shown as 64 hexadecimal digits, each 4 bits):
Randomly generated private key (k).
Bitcoin’s private key space, 2-256 is an unfathomably large number.
It is approximately 10 to the 77th in decimal.
The visible universe is estimated to contain 10 to the 80th atoms
Offline Secure Hardware Wallets
Those keys are often stored in a digital wallet on each user’s computer. Each wallet has an address (aka public key) A bitcoin address looks like:
– they consist of a string of letters and numbers starting with a “1” (number one). Just like you ask others to send an email to your email address, you would ask others to send you bitcoin to your bitcoin address.
Possession of the key that unlocks a transaction is the only prerequisite to spending bitcoins, putting the control entirely in the hands of each user.
Elliptic Curve Cryptography Explained Elliptic Curve Cryptography is a type of asymmetric or public-key cryptography based on the discrete logarithm problem as expressed by addition and multiplication on the points of an elliptic curve.
Every bitcoin transaction requires a valid signature to be included in the blockchain, which can only be generated with valid digital keys, therefore anyone with a copy of those keys has control of the bitcoin in that account.
Keys come in pairs consisting of a private (secret) and public key.
Think of the public key as similar to a bank account number and the private key as similar to the secret PIN number, or signature on a cheque that provides control over the account. These digital keys are very rarely seen by the users of bitcoin. For the most part, they are stored inside the wallet file and managed by the bitcoin wallet software. In the payment portion of a bitcoin transaction, the recipient’s public key is represented by its digital fingerprint, called a bitcoin address, which is used in the same way as the beneficiary name on a cheque (i.e. “Pay to the order of”). In most cases, a bitcoin address is generated from and corresponds to a public key.
The Blockchain is a distributed ledger or database that is operated by a peer-to-peer network of unaffiliated participants. Using computers running sophisticated algorithms, these participants, so-called Bitcoin “miners,” process transactions according to strict protocols that ensure a very high degree of accuracy and security.
Anyone can participate—the blockchain is fully transparent and available to all—but only the miners that are the first to process an individual transaction are compensated.
This means its profitable to be a miner. Now you can hire others to mine it for you. A mining contract gets you a early piece of the new financial system.
Bitcoin Mining Basics
When a transaction is propagated on the bitcoin network it does not become part of the shared ledger (the blockchain) until it is verified and included in a block by a process called mining.
The bitcoin system of trust is based on computation. Transactions are bundled into blocks, which require an enormous amount of computation to prove, but only a small amount of computation to verify as proven.
This process is called mining and serves two purposes in bitcoin:
• Mining creates new bitcoins in each block, almost like a central bank printing new money. The amount of bitcoin created per block is fixed and diminishes with time.
• Mining creates trust by ensuring that transactions are only confirmed if enough computational power was devoted to the block that contains them. More blocks mean more computation which means more trust
Miners use chips to solve math problems that post updates to a ledger.
Blockchains – The first block in the blockchain, used to initialize the crypto-currency was called the Genesis Block.
Miner – A network node that finds valid proof-of-work for new blocks, by repeated hashing. What is hashing – A hash is a digital fingerprint of some binary input.
In simple terms, a transfer of bitcoins from one address to another. More precisely, a transaction is a signed data structure expressing a transfer of value.
Transactions are transmitted over the bitcoin network, collected by miners and included into blocks, made permanent on the blockchain. wallet Software that holds all your bitcoin addresses and secret keys. Use it to send, receive and store your bitcoin.
Public blockchains are decentralized and accessible to anyone, regardless of their affiliation. Transactions are publicly verified and remain in the public domain. To ensure the integrity of the system and to validate transactions, financial-incentive and consensus mechanisms are built into the system.
Private blockchains are set up and maintained by a private entity. Security protocols control and limit access to authorized parties. Transactions are verified within the private blockchain and can potentially be altered within that private network, which enables operators to correct errors. This feature is not permitted in public blockchains, in part because it can create security risks. There are two types of private blockchains: consortiums, which include preselected participants from a variety of organizations; and fully private blockchains, which are limited to participants from one organization.
How it works
To verify that the virtual money transactions take place in a legal and safe manner, a process of verification of the transactions themselves is necessary.
To simplify, if a user buys an item and pays in bitcoin, algorithms check whether the bitcoins spent are taken from his wallet, avoiding the phenomenon called double spending.
This verification, that with the spread of bitcoin always requires more computing power, is called mining.
The so-called miners provide the computing power of their computer to run these verification. In return, they receive free bitcoin, until bitcoin reaches 21 million units (roughly), as its total number is limited.
“Cryptocurrency mining is the process of finding solutions to compose blocks in the blockchain. Blocks consist of transactions that bitcoin netizens conduct with each other, and the blockchain is a groundbreaking technology of secure financial transactions, which, incidentally, is already being extensively adopted not only by banks, but also by some government structures. Whenever a miner or a mining pool closes the block forming the sequence of transactions, they get 25 bitcoins”
How cryptocurrencies work
Cryptocurrencies are backed by math rather than the word of a government or financial institution. While they, like all currencies, still depend on their perceived value, their scarcity is based on math and cannot be adjusted by any one group or person. They are neither tied to the availability of physical goods, such as gold, nor can they be artificially created by governments or financial institutions like dollars can.
Cryptocurrencies use a distributed network to allow for a p2p (peer-to-peer) transaction system without the need for third parties. In order to keep this secure, cryptocurrencies utilize mathematical algorithms and a public ledger.
In order to ensure every transaction is legitimate, complex mathematical equations are used to link each account with the amount of virtual currency the account holder would like to spend. Users, commonly referred to as miners, dedicate their computing resources to solving these equations and are generally rewarded with a small amount of cryptocurrency.
Altcoins, meaning “alternative coins”, is another term for cryptocurrencies (other than Bitcoin). Since Bitcoin’s release in 2009, many have noticed its crucial advantages over government money, while also giving recognition to the fact that some of its aspects can be improved upon. That has lead to the appearance of hundreds of different altcoins, which are all ultimately based on the same technology of the Blockchain but are designed differently in some ways, in order to achieve different goals.
Blockchain will enable the development of new exchanges that facilitate the trade of a wide variety of assets, not only financial instruments. This would typically involve the exchange of virtual tokens that represent underlying assets, which could include physical or intellectual property.
Where do I get apps for altcoins? See video
Click Image To Enlarge: Learn how a BTC works.
The First Step: Set-Up a Free Blockchain Wallet to get a blockchain address
Q. Why do I need one?
A. You need a Blockchain Address to receive BTC when its mined for you
B. You need a “Private Key” to send or spend coins from your wallet.
a) One that links to Bank Accounts (Buy/Sell/Trade)
b) One that is not linked to a Bank (Buy/Sell/Trade)
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How to Buy Ethereum
As there are more and more ways of purchasing Ethereum, CoinTelegraph has selected for you the best options to currently do it.
Buy Ethereum on an Exchange
There are many cryptocurrency exchanges such as Poloniex, Kraken, HitBTC and Bitfinex that sell Ethereum, and you can purchase it normally for both fiat and other cryptocurrencies. This is probably one of the easiest ways. You can either trade your BTC or other cryptocurrencies supported for Ethereum or you could deposit some fiat currency into your account, buy some Bitcoin with it and then simply exchange that to Ethereum. From there you can withdraw your ETH to your wallet.
The fees are of similar values ranging between 0.1 to 0.2%. Withdrawal fees vary a bit depending on the transfer. You’re normally better off doing a SEPA transfer which is either free or less than a euro. Bank transfers to other countries can range between $5-$20. Crypto withdrawals are normally free or with a network fee around 0.05€.
If you already have Bitcoins you’d like to convert to Ethereum, you can also try Buy Ether. You simply need to send them your Bitcoin and enter your Ethereum wallet address to receive ETH in return. That is if you have set a wallet up already.
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The Reason we want you to Mine BTC is its both the Raw fuel and the Refined Fuel that will power the future of finance globally, on the internet.
What is a Smart Contract? (its a blockchain driven idea, that uses mined coins like Ether, Bitcoin or more.
Suppose you are Party 1 and you want services from Party 2.
The contract lets both sides get what they agreed to by having terms in a software driven contract that also uses collateral (digital coin) in the blockchain to execute when the deal is correctly finished.
The service could be an improved ranking on Google or an internet service. The internet of things is going to get profitable with Bitcoins.
If its a Product the funds could be set to released when delivered by FedEx.
So maybe you are website creator who tweaked a website for a client and accepted $20 as payment. Maybe the client has $20 in Doge and asks you to see they exist by searching D6LNp2hrxDh3xBcB3SYY6fQkpZqWtVG8r8
into an explorer. You see the coins exist and then agree to swap the work for some of these coins.
But how do you know the Money is really there?
If you bought or mined 100K DOGECOIN and then sent those funds to a Dogecoin Wallet, the Funds can be publicly verified using the public key address from your paper or online wallet here.
You simply cut+paste the public address into a Blockchain explorer, like Blockcypher. Try it. See if you can verify the balance in the wallet below. < Click Link
The 100,000 Dogecoins are verified on the blockchain. If 100,000 Doge are worth approx. $20 USD. You search the price here.
1000 Doge are $0.22 as of 12/10/2016
Today On 100K The Spread +/- is To Sell $21.80 | To Buy $23.16
So $1.36 difference between Bid/Ask to Buy/Sell.
What is Blockchain?
What is Mining?
Above is Our AssetID for our SmartProperty (Coloredcoin)
1 unit is called a BitMiners (Search for BitMiners on Explorer Site).
This asset is not added onto Blockchain yet. It’s offline till 2017. To acquire units send us your email and we’ll send the instructions.
Once an asset is digitized online. It can be put into an online contract.
BitMiners Asset ID: AWruuLf63NFz7VYhE6RPSE12g4PX5vR8pj
You will need an address to Send from/to (example) 1LnQmksUMnFxkv8udJfCTaBd8YvbknwTtS
We do not sell BTC direct to you and we are not an exchange. If you do not yet have coins, buy them here https://www.coinbase.com/join/EETP
Send BTC to your smartphone or wallet using an ATM near you.
Not all ATMs allow you to SELL, these do issue cash for Selling BTC
Verify a transaction online here
FIND A TRANSACTION (search for address, blocks, transaction)
Contract Mining Services Available:
Why is mining so expensive?
Each miner has 189 High Powered Chips inside it.
Q)What do the chips do?
A) Solve a math problem, cracking 1 of 21 Million unique codes or blocks.
Blocks are mined using chips: a long chain of code is “authenticated”
Once a miner solves this unique serial# by hashing this code, a spendable digital serial number is then created similar to serial numbers on paper money. The chain of code is called a block-chain. It becomes a unique form of digital money that can be sent as payment in a global blockchain network. All miners must agree that the serial# is authentic or its not added to the chain of money.
Super high speed computers mine these coins for us
and for you. You just receive a message when it arrive.
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Since mining is technical and expensive, its easier to
work with existing miners who handle the 24/7 work.
We can buy, lease or rent hashing power and you can sublease a smaller size of high performance computers mining various digital coins online 24/7.
You can even make your own coins.
Our Value Proposition: Make it easier to Earn BTC and colored coin amounts daily and generate regular payouts monthly by subscribing to variety of Digital Asset Holdings.
If your Budget is Under $10,000 you can visit these sites below to get started for less than $100. If you are in a Business, you might want to hire a private contractor and we may be able to help.
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