For the past couple of months there has been an extreme hype when it comes to blockchain and cryptocurrencies. I have wanted to get into this stuff for quite some time now and here is an excerpt from the document which I have been compiling for my own research from multiple sources. Happy reading! :)
Bitcoin
Bitcoin is a form of currency which one can hold digitally. No one controls it, and the value increases or decreases only through basic supply and demand. The demand is high, supply is limited, so the rate goes up! The bitcoin tech says that only 21 million bitcoins can ever be created by miners. One bitcoin equals 100M Satoshi.
Sites or users using the Bitcoin system are required to use a global database called the Bitcoin blockchain. The blockchain is a record of all transactions that have taken place in the Bitcoin network. It also keeps track of new bitcoins as they are generated. With these two facts, the blockchain is able to keep track of who has how much money at all times.
Bitcoin mining basically refers to a multitude of computers solving mathematical problems. Every ten minutes or so mining computers collect a few hundred pending bitcoin transactions (a “block”) and turn them into a mathematical puzzle. The first miner to find the solution announces it to others on the network. The other miners then check whether the sender of the funds has the right to spend the money, and whether the solution to the puzzle is correct. If enough of them grant their approval, the block is cryptographically added to the ledger and the miners move on to the next set of transactions (hence the term “blockchain”). The miner who found the solution gets 25 bitcoins as a reward, but only after another 99 blocks have been added to the ledger.
Over time mining has become so hard that it is now done over thousands of distributed systems.
Ethereum
The internet, for the most part, has followed the client-server model in which case an information being viewed from a client is being hosted at a server somewhere around the world. This information on the server could potentially have come from any client too. Over the years, you may have heard how hackers have been able to leak critical information, and the client-server model is at fault here. Ethereum is here to change that.
Ethereum basically aims to replace this client-server model through a unified model using blockchain tech. It aims to eliminate the third parties across the internet which control the flow of information.
Under Ethereum, the servers would be replaced by nodes across the world. This is what they call ‘The World Computer’. Since blockchain would make sure that all the data incoming and outgoing is through unique nodes, the flow of information would not be through a third party like Google or Apple.
To summarize, Ethereum is a platform which aims to change the internet the way it is by replacing Client-Server model with a blockchain controlled node based one. Ethereum also provides a cryptocurrency token called Ether (ETH), which can be transferred between accounts and used to compensate participant nodes for computations performed.
The technology at core takes a lot of inspiration from Bitcoin’s blockchain technology. But in this case, it is tweaked to run a multitude of applications which aren’t only related to finance. Check https://www.cryptokitties.co/ and be surprised. Ethereum allows developers to build apps on top of it using its blockchain. Ethereum enables SmartContracts and Distributed Applications to be built and run without any downtime, fraud, control or interference from a third party.
Coming back to Ripple
Ripple is more known for its digital payment protocol than its cryptocurrency, XRP. Ripple operates on an open source and P2P decentralized platform that allows for a seamless transfer of money in any form, whether USD, Yen, litecoin, or bitcoin. Ripple basically provides a payment gateway to its users.
Ripple, the company, offers banks a software called Ripple Connect which acts as a gateway to transfer money for a minimal fee because it doesn't have to get transferred 2-3 times into different fiats or service fees. It simply needs to get converted once. This software DOES NOT use XRP.
XRP is a cryptocurrency that exists outside of Ripple Connect that is high in liquidity and has fast transactions.
"Ripple explained for Bitcoiners: imagine Satoshi premined all 21m bitcoins, kept 13m for himself, and only allowed himself and a few friends to validate transactions"
Linda Campbell
Cats, JS, and Crypto are my favourite things. Also, Triangles are my favourite shapes.
For the past couple of months there has been an extreme hype when it comes to blockchain and cryptocurrencies. I have wanted to get into this stuff for quite some time now and here is an excerpt from the document which I have been compiling for my own research from multiple sources. Happy reading! :)
Bitcoin
Bitcoin is a form of currency which one can hold digitally. No one controls it, and the value increases or decreases only through basic supply and demand. The demand is high, supply is limited, so the rate goes up! The bitcoin tech says that only 21 million bitcoins can ever be created by miners. One bitcoin equals 100M Satoshi.
Sites or users using the Bitcoin system are required to use a global database called the Bitcoin blockchain. The blockchain is a record of all transactions that have taken place in the Bitcoin network. It also keeps track of new bitcoins as they are generated. With these two facts, the blockchain is able to keep track of who has how much money at all times.
Bitcoin mining basically refers to a multitude of computers solving mathematical problems. Every ten minutes or so mining computers collect a few hundred pending bitcoin transactions (a “block”) and turn them into a mathematical puzzle. The first miner to find the solution announces it to others on the network. The other miners then check whether the sender of the funds has the right to spend the money, and whether the solution to the puzzle is correct. If enough of them grant their approval, the block is cryptographically added to the ledger and the miners move on to the next set of transactions (hence the term “blockchain”). The miner who found the solution gets 25 bitcoins as a reward, but only after another 99 blocks have been added to the ledger.
Over time mining has become so hard that it is now done over thousands of distributed systems.
Ethereum
The internet, for the most part, has followed the client-server model in which case an information being viewed from a client is being hosted at a server somewhere around the world. This information on the server could potentially have come from any client too. Over the years, you may have heard how hackers have been able to leak critical information, and the client-server model is at fault here. Ethereum is here to change that.
Ethereum basically aims to replace this client-server model through a unified model using blockchain tech. It aims to eliminate the third parties across the internet which control the flow of information.
Under Ethereum, the servers would be replaced by nodes across the world. This is what they call ‘The World Computer’. Since blockchain would make sure that all the data incoming and outgoing is through unique nodes, the flow of information would not be through a third party like Google or Apple.
To summarize, Ethereum is a platform which aims to change the internet the way it is by replacing Client-Server model with a blockchain controlled node based one. Ethereum also provides a cryptocurrency token called Ether (ETH), which can be transferred between accounts and used to compensate participant nodes for computations performed.
The technology at core takes a lot of inspiration from Bitcoin’s blockchain technology. But in this case, it is tweaked to run a multitude of applications which aren’t only related to finance. Check https://www.cryptokitties.co/ and be surprised. Ethereum allows developers to build apps on top of it using its blockchain. Ethereum enables SmartContracts and Distributed Applications to be built and run without any downtime, fraud, control or interference from a third party.
Coming back to Ripple
Ripple is more known for its digital payment protocol than its cryptocurrency, XRP. Ripple operates on an open source and P2P decentralized platform that allows for a seamless transfer of money in any form, whether USD, Yen, litecoin, or bitcoin. Ripple basically provides a payment gateway to its users.
Ripple, the company, offers banks a software called Ripple Connect which acts as a gateway to transfer money for a minimal fee because it doesn't have to get transferred 2-3 times into different fiats or service fees. It simply needs to get converted once. This software DOES NOT use XRP.
XRP is a cryptocurrency that exists outside of Ripple Connect that is high in liquidity and has fast transactions.