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Dummies guide to Bitcoin Energy Use

Dummies guide to Bitcoin Energy Use

For past couple of months, there has been an increased focus on bitcoin’s electricity usage. Recent examples are –  Vice article  and IEEE. This post attempts to explain bitcoin’s energy usage. It also tries to add some perspective on the energy problem. Warning: This article gets a bit technical. Flow of Money “It is digital money” is simplest explanation for bitcoin. Digital currencies have an inherent problem. Let’s take an example. A digital currency called “MyDitigalCoin”: If I need more…

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Blockchain Usage Part 2

Blockchain Usage Part 2

We looked at two major uses of blockchain in our part 1. Here we expand our understanding looking at two more changes (but not usage) in blockchain space. We will tie this information in an ICO evaluation piece later. Hashing Algorithm Change (We have covered hashing and mining earlier in the blog.) Bitcoin started with normal or “CPU Mining”. As bitcoin became famous people started to find ways to mine faster. There were miners (mining software) written to use the…

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Blockchain Usage Part 1

Blockchain Usage Part 1

Disclaimer – Coins discussed in this post are for educational purpose. Please don’t take them as any form of endorsements. In our previous post we discussed one of the important tools to evaluate ICOs. In this post, we will expand our understanding of the blockchain technology. This will help us to further evaluate ICOs by understanding their underlying technology proposal. Trustless and decentralized transactions, consistency and privacy – are the major advantages of blockchain. All these features are already provided by…

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ICO, Token, Genesis, PreMine and Instamine Explained

ICO, Token, Genesis, PreMine and Instamine Explained

Please note: This is a supplement to the “Blockchain and Cryptocurrency Explained” series. If you want to start from the beginning, go here. This information should help you during your next token or ICO sale. What is ICO and pre-mine? To understand this let’s go to our blockchain example in part 3: The noticeable thing here is the block 1. How does Red or Blue transfer any coins at all? If we were to believe that blockchain contains all balances…

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What is a Blockchain Explorer and Difficulty?

What is a Blockchain Explorer and Difficulty?

Please note: This is a supplement to the “Blockchain and Cryptocurrency Explained” series. If you want to start from the beginning, go here. Blockchain explorer is one of the essential tools in any cryptocurrency. These explorers provide information on the status of the blocks, transactions and currency. We will cover some of the basic information related to blockchain explorers. Let’s take two currencies side by side to understand this completely: Bitcoin Blockchain Explorer – https://blockchain.info/ Ethereum Blockchain Explorer – https://etherscan.io/…

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Guide on starting to use and Mine a Coin

Guide on starting to use and Mine a Coin

Please note: This is supplementary for the “Blockchain and Cryptocurrency Explained” series. If you want to start from the beginning, go here. Oft asked questions for any cryptocurrency is – How do I start using a coin? How do I mine so and so coin? Or How does one become a node or a peer? The steps for achieving any of these is similar in any coin. This post aims to provide a general outline of those steps. Here’s the decision…

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Blockchain and Cryptocurrency Explained – Part 4 – Mining

Blockchain and Cryptocurrency Explained – Part 4 – Mining

We have looked at identity, verification and trust in cryptocurrency and blockchain. In our last part, we will put everything together and look at the end to end transaction flow using mining.  Let’s start with the often used word: Mining The process by which a peer or a node earns coins is called mining. The node which is earning through mining is called a miner. Okay…but what is mining? If you remember our discussion on hashcash – email sender had…

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Blockchain and Cryptocurrency Explained – Part 3 – Blockchain (2)

Blockchain and Cryptocurrency Explained – Part 3 – Blockchain (2)

How does Hashcash tie into cryptocurrency? Cryptocurrencies using the concept of Hashcash to generate coins and maintain blockchain. Some of the important concepts which are re-used from Hashcash: The software used for Hashcash was referred to as mint. One correct hash meant 1 token or coin (cash) to send one email. The process for finding correct nonce is called mining. Correct hash is used to prove that the sender’s computer has done some work on finding the right combination, hence the name…

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Blockchain and Cryptocurrency Explained – Part 3– Blockchain (1)

Blockchain and Cryptocurrency Explained – Part 3– Blockchain (1)

This part on blockchain gets a little technical. So I have broken this down to two smaller pieces. We understand p2p systems must ensure trust especially when it the whole idea is based on a system of unrelated computers. Let’s look at how the trust is achieved. If we go back to our p2p example in part 2 , here’s what we said: In a p2p environment, the bittorrent program checks the file it is downloading. The question is how does the…

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Blockchain and Cryptocurrency Explained – Part 2 – Verification

Blockchain and Cryptocurrency Explained – Part 2 – Verification

In Part 1, we laid out the grounds on how the ownership works in cryptocurrency using digital signatures. While a two-way communication worked great, the question remained how will a large-scale verification work in blockchain? Let us first define what does verification mean by going back to Mr. Red and Mr. Green. Suppose Mr. Red needs to pay Green some money. Two of the ways this money transaction can happen is: Red has the physical signature and ATM pin as…

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