Table of Contents
Legality of Cryptocurrencies By Country
List of Cryptocurrencies
Bitcoin Exchanging Guide
Bitcoin, cryptocurrency, and other information:
All about cryptocurrencies: https://en.wikipedia.org/wiki/Cryptocurrency
Bitcoin FAQs: http://cryptocurrencyhelp.com/
Bitcoin Wikipedia: https://en.wikipedia.org/wiki/Bitcoin
Bitcoin Events & Conferences: http://www.coindesk.com/bitcoin-events/
Explain Bitcoin to a 5 y/o: https://medium.com/@nik5ter/explain-bitcoin-like-im-five-73b4257ac833#.o1hvyrukz
Transaction Accelerator: https://www.viabtc.com/tools/txaccelerator/
Suggested Tool: Augur
Augur – Third Party System
Market Cap: 47,388,990 (Ranked #8)
Available Supply: 11,000,000 REP
Founder(s): The Augur Team
Founder(s) Intentions: Augur combines the magic of prediction markets with the power of a decentralized network to create a stunningly accurate forecasting tool – and the chance for real money trading profits
– Augur is an open, global platform where anyone anywhere can create, monitor or trade in prediction markets about any topic. Think of it as an “Early Warning System” with the most accurate event forecasts, a potential “Google Search”, “Bloomberg Terminal” or “Reuters Terminal” for crowdsourced event forecasts.
– With Augur, thousands of REP token holders will verify this outcome, making manipulation or error virtually impossible.
Wallets/Exchanges Poloniex, Kraken, Bittrex, Gatecoin, and ShapeShift.
History:Start Date 11/17/2014
Recent News: N/A
What is a cryptocurrency?
To put it into simple terms, a cryptocurrency is a virtual currencies that is decentralized.
What are the uses of a cryptocurrency?
The currencies are multi-purpose as if any currency is (I.E USD), and cryptography is used to secure the transactions and to control the creation of new coins.
Who uses cryptocurrencies?
It is believed by some that these currencies are used only by blackhats to remain anonymous, but that is not true by any means. Many people use cryptocurrencies, including businesses. As time has progressed, more and more people are using cryptocurrencies for everyday transactions.
What are confirmations?
Roughly every ten minutes, a new block is created and added to the blockchain through the mining process. This block verifies and records any new transactions. The transactions are then said to have been confirmed by the Bitcoin network.
[Source: Bitcoin Simplified]
How long do confirmations take?
There are lots of block intervals with a time less than 10 minutes but then a few block intervals much longer which bump up the average to 10 minutes. So the bitcoin network can get unlucky and a block won’t be found for a whole hour.
[Source: Bitcoin Wiki]
What’s the point of confirmations?
The point of confirmations is that you can’t fake sending money or pull back the funds once it’s confirmed.
Before there is a first confirmation it is possible to spend it twice. That’s called a double-spend and the blockchain miners will sort out which one to do first and the one they deem second won’t be confirmed. This is why you should never consider Bitcoin payments from untrusted sources as PAID until at least one confirmation occurs. It’s why many places require up to 6 confirmations before it’s considered PAID. Some smaller cryptos want 10 or more confirmations. That’s to avoid any possibility of a corrupt blockchain taking hold in order to steal the coins.
What does the term “double spending” mean?
Double-spending is the result of successfully spending some money more than once.
[Source: Bitcoin Wiki]
Legality of Cryptocurrencies By Country
Note: Almost all, if not all, countries require you to report the gains/losses for tax purposes. As I created this, I wrote under SOME countries I mentioned recording income is required, but I HIGHLY, HIGHLY recommend reading up on the laws for yourself. The last thing I want to have happen is to have you arrested for money laundering or tax evasion due to being misinformed or not informed. Please double-check and read up on your specific country/state laws as they are getting constantly updated.
The French Ministry of Finance issued regulations on July 11, 2014 requiring:
1) Identity verification during the opening of, withdrawal from, or deposit to a virtual currency account.
2) Capital gains are taxable as business profits (BIC) or as non-commercial profits (BNC), depending on if the activity is undertaken habitually or not. Assets held in bitcoin must also be reported pertaining to the wealth tax (ISF).
3) Proposed ceiling on payments consistent with current rules for cash payments.
4) Conformance with regulations at the European Union level for bitcoin exchanges pertaining to identity verification of transaction participants and anti-money laundering.
Bitcoin are “not illegal” (this according to a Russian federal tax service letter)
This letter included:
1) The Russian laws do not define such terms as money surrogate, cryptocurrency, or virtual currency.
2) The Russian laws do not contain any prohibitions as to operations with cryptocurrencies conducted by Russian citizens and organizations.
3) Using cryptocurrencies in transactions is a basis for considering such transactions as possibly related to laundering of illegally obtained money, and terrorism funding.
4) The FTS of Russia believes that operations related to procurement or sale of cryptocurrencies involving currency values (i.e. foreign currencies or external securities) and/or Russian currency are essentially monetary operations.
5) The existing monetary control system does not provide for reception of data on buy/sale operations with cryptocurrency from residents and nonresidents.
– Bitcoins is not illegal in India. Nishith Desai Associates is a leading law firm in the country. They have announced multiple times that Bitcoins is legal under all existing laws in India.
– An interesting fact is that, back in 2013, the Reserve Bank of India (RBI) issued a warning about bitcoin in late December 2013, which was followed almost immediately by exchanges choosing to suspend operations.
– On 28 December 2013, shortly after the shut down of some exchanges and a few raids that occured, the Deputy Governor of the RBI, K. C. Chakrabarty, made a statement that RBI had no plans to regulate bitcoin
– Italy’s stance on the Bitcoin system parallels the stance taken by the EU.
– Italy implemented this Directive through Legislative Decree No. 45 of April 16, 2012, which defines the concept of electronic currency, including the cases in which it is issued electronically in exchange for funds to be used as a means of payment, and identifies the persons authorized to issue electronic money.
– The Decree allows the use of electronic currencies in accordance with the EU Directive at the level of the European Central Bank, and by the central banks of European Members, the Italian public administration at the regional and local government levels, and the Italian postal system.
– However, the use of electronic currency is restricted to banks and electronic money institutions—that is, private legal entities duly authorized and registered by the Central Bank of Italy.
– Aside from these developments, Italy does not regulate bitcoin use by private individuals, and currently the implementation of initiatives concerning the use of electronic currencies lies with the EU
– There are at present no laws in Japan regulating the use of bitcoins. Haruhiko Kuroda, governor of the Bank of Japan (BOJ), recently stated that BOJ was “researching issues of bitcoins, but I have nothing to say regarding bitcoins at the moment.”
– UPDATE (Nov. 7, 2016): The 2016 amendment to the Payment Services Act included virtual currency exchanges regulation. Virtual currency exchanges operating in Japan will be required to register with the Financial Services Agency. The amendment will be effective by early June in 2017.
– The amended Payment Services Act defines Bitcoin and other virtual currency as:
* Property value that can be used by unspecified persons for payment of equivalent value for purchased goods, rental fees, or services, that can be purchased by or sold to unspecified persons, and that is transferable via an electronic data processing system (limited to property values that are stored electronically on electronics, excluding currency and currency denominated assets); or
* Property value that can be mutually exchangeable for 1 above with unspecified persons and is transferable via an electronic data processing system. (Amended Payment Services Act, art. 2 ¶ 5.)
– Dutch regulators have not imposed licensing restrictions on virtual currency businesses
– Holland in typically liberal style has tacitly assented to the use of digital currencies by issuing guidelines on their tax status. Logically, bitcoin and other cryptocoins are treated as any other currency for tax purposes.
Dutch Minister of Finance, Jeroen Dijsselbloem, stated, “The ‘alternative virtual currency’ [bitcoin] cannot be seen as ‘electronic money,’ ” continuing, “because it fails the definition set by the Dutch law.”
In 2016, 10 individuals were arrested for money laundering. This should not be surprising, money laundering is a common law and if broken, severe punishments may be acted upon the individuals.
Bitcoin is not regulated as it is not considered to be electronic money according to the law.
Trading in bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest bitcoin markets in Vietnam – VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for bitcoin in Vietnam that should be finished by December 2017.
United States of America
– In the United States, bitcoin and other digital currencies are legal. While it is completely legal to have bitcoin, all profits/losses has to be reported to the IRS. On top of that, there are individual state laws and certain licenses required.
– End of March 2014, in time for 2013 tax filing, the IRS issued a guidance that it considered virtual currency as property for federal taxation and that “an individual who ‘mines’ virtual currency as a trade or business [is] subject to self-employment tax”.
– FinCEN (Financial Crimes Enforcement Network) has stated that the conversion of Bitcoins into U.S. currency is considered to be the transmission of money.Thus requiring businesses who do this, to register as a money service business. (However this may not apply to infrequent or low volume traders.)
– All types of money service businesses must register with FinCEN to obtain a money transmitter license… It is quite easy to register on FinCEN’s website to apply for a license, but actually obtain the license is difficult. Money service licenses have been granted to companies like Paypal, Western Union, and American Express. It can be a long, expensive, process to obtain an MTL. Bitcoin businesses may also work with a licensed transmitter (if they would like to forego the difficulty of obtaining their own licenses).
Individual States in the USA
New York: A Bit-license is required. New York is the strictest state in the USA.
Check your local and state laws – they are often getting updated.
– The Financial Conduct Authority (FCA) in the United Kingdom (UK) has a pro-bitcoin stance and wants the regulatory environment to be supportive of the digital currency. Bitcoin is under certain tax regulations in UK.
-Bitcoin is treated as ‘private money’. When bitcoin is exchanged for sterling or for foreign currencies, such as euro or dollar, no VAT will be due on the value of the bitcoins themselves. However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for bitcoin or other similar cryptocurrency. Profits and losses on cryptocurrencies are subject to capital gains tax.
– HM Revenue and Customs tax treatment of income received from Bitcoin and other cryptocurrencies. Read More.
[Source: Investopedia] [Source: UK Government] [Source: Wiki]
List of cryptocurrencies
This is a list of cryptocurrencies. There were more than 710 cryptocurrencies available for trade in online markets as of 11 July 2016 and more than 740 in total but only a few dozen had reached a market capitalization above $10 million above as of early 2017. Real time market information can be accessed at Crypto-Currency Market Capitalizations.
(POS, POW, or other)
|SHA-256d||POW & POS||The first cryptocurrency to use POW and POS functions.|
|2016||Active||Zcash||ZEC||Zooko Wilcox||Equihash||POW||The first open, permissionless financial system employing zero-knowledge security.|
|2016||Active||Safe Exchange Coin||SAFEX||Daniel Dabek
|POS||POS||Represents stakeholder ownership of the Safe Exchange Organization, which builds, services, and promotes blockchain technology for decentralized and anonymous trading.|
|2015||Active||Ethereum||ETH||Vitalik Buterin||Dagger Hashimoto||POW||Supports Turing-complete smart contracts.|
|System for securing millions of realtime records in the blockchain with a single hash.|
|2014||Active||Vertcoin||VTC||Bushido||Lyra2rev2||POW||Next-gen ASIC resistance and first to implement stealth adresses.|
|Scrypt||POW||Created as an alternative to fiat currency in Iceland.|
|2014||Active||BlackCoin||BC, BLK||Rat4 (pseudonym)||Scrypt||POS||Secures its network through a process called minting.|
|2014||Active||Burstcoin||BURST||Burstcoin Community||SHA-256d||Proof of Capacity||First Proof of Capacity coin, First Smart Contract, First Atomic Cross Chain Transfer.|
|2014||Inactive||Coinye||KOI, COYE||Scrypt||POW||Used American hip hop artist Kanye West as its mascot, abandoned after trademark lawsuit.|
|2014||Active||Dash||DASH||Evan Duffield &
|X11||POW & Proof of Service[nt 2]||A bitcoin-based currency featuring instant transactions, decentralized governance and budgeting, and private transactions.|
|2014||Active||DigitalNote||XDN||XDN-dev team, dNote||CryptoNight||POW||A private cryptocurrency with an instant untraceable crypto messages and first blockchain banking implementation, use CryptoNote protocol.|
|2014||Active||Gulden||NLG||Rijk Plasman||Scrypt||POW||Previously named GULDENCOIN; in 2015 the name changed to GULDEN.|
|2014||Active||MazaCoin||MZC||BTC Oyate Initiative||SHA-256d||POW||The underlying software is derived from that of another cryptocurrency, ZetaCoin.|
|2014||Active||Monero||XMR||Monero Core Team||CryptoNight||POW||Privacy-centric coin using the CryptoNote protocol, and focused on the use on the Darknet Market.|
|SHA-256d||POS||Specifically designed as a flexible platform to build applications and financial services around its protocol.|
|2014||Active||Reddcoin||RDD||Jonathan Patenaude||Proof of Stake and Velocity||First to use Proof of Stake and Velocity algorith. Focused on micro-transaction and tipping on social networks |
|2014||Active||PotCoin||POT||Scrypt||POW||Developed to service the legalized cannabis industry|
|2014||Active||Titcoin||TIT||Edward Mansfield & Richard Allen||SHA-256d||POW||The first cryptocurrency to be nominated for a major adult industry award.|
|2014||Active||Synereo AMP||AMP||Dor Konforty & Greg Meredith||POS||POS||Trying to create a world computer, Synereo’s 2.0 tech stack incorporates all faculties needed to support decentralized computation without central servers.|
|2013||Active||Dogecoin||DOGE, XDG||Jackson Palmer
& Billy Markus
|Scrypt||POW||Based on an internet meme.|
|2013||Active||Gridcoin||GRC||Rob Hälford ||Scrypt||Decentralized POS||The first cryptocurrency linked to citizen science through the Berkeley Open Infrastructure for Network Computing|
|2013||Active||Omni||MSC||J. R. Willett ||SHA-256d||N/A||Omni is both digital currency and communications protocol built on top of the existing bitcoin block chain.|
|2013||Active||Emercoin||EMC||EvgenijM86 & Yitshak Dorfman||SHA-256||POW & POS||Trusted storage for any small data: acts as an alternative, decentralized DNS, PKI store, SSL infrastructure and other.|
|1CC/2CC/TWN||POW||Uses the finding of prime chains composed of Cunningham chains and bi-twin chains for proof-of-work, which can lead to useful byproducts.|
|2013||Active||Ripple||XRP||Chris Larsen &
|ECDSA||“Consensus”||Designed for peer to peer debt transfer. Not based on bitcoin.|
|SHA-256d||POW & POS||The first cryptocurrency to use POW and POS functions.|
|2012||Active||SwiftCoin||sc||Daniel Bruno, Chartered Market Technician
|256 sha||POW||Is the first cryptocurrency designed for patented block chain debt instruments called the Solidus Bond.|
|2011||Active||Litecoin||LTC||Charles Lee||Scrypt||POW||The first cryptocurrency to use Scrypt as a hashing algorithm.|
|2011||Active||Namecoin||NMC||Vincent Durham||SHA-256d||POW||Also acts as an alternative, decentralized DNS.|
|2009||Active||Bitcoin||BTC,XBT||Satoshi Nakamoto[nt 1]||SHA-256d||POW||The first decentralized ledger currency. Cryptocurrency with the most famous, popular, notable and highest market capitalization.|
Beginner’s Guide to Exchanging Cryptocurrency
Table of Contents:
- Buying Bitcoin
- Selling Bitcoin
- Local Bitcoins is a very trustworthy site. You will have to follow the seller’s instructions and often they do require a picture of your ID. Since Local Bitcoins sellers often have higher rates for BTC, I only purchased from the website once.
- Zebpay: It is a mobile app-enabled bitcoin wallet provider headquartered in Singapore with IT office in Ahmedabad, Gujarat, India. It is best option if you are from India.
- Coinbase: Coinbase is a great way of purchasing Bitcoin. When you first sign up your daily and weekly limits are not that great. However, you can raise your limits by buying more Bitcoin or being a part of the site for a given time.
- xCoins: Personally, I have not used this website, but I believe it is one of the best ways of a purchasing Bitcoin. From what I have read, once you verify your ID, your limits are $500 per day. Another great thing about xCoins is that you can purchase with PayPal!
xCoins currently accepts all the following methods:
Major credit cards: Visa, MasterCard, American Express, and Discover
Bank account (ACH)
Selling Bitcoin: All the websites that you can buy bitcoin, you can sell bitcoin too.
I recommend selling on local bitcoins & Zebpay. On both websites, you can easily sell bitcoin quickly for a profit. On local bitcoins, you will have to build your reputation as a seller just as you would with any other site. The great thing about local bitcoins is that once you are trusted, you can sell bitcoin for a higher rate.
What is Bitcoin Mining?
Is Mining BTC worth it?
The short answer is no, it is not worth it anymore. If there are multiple miners at once, then it may be worth it, but in most cases, it is not.
Put very simply, cloud mining means using (generally) shared processing power run from remote data centres. One only needs a home computer for communications, optional local bitcoin wallets and so on.
Types of cloud mining
Hosted mining – Lease a mining machine that is hosted by the provider.
Virtual hosted mining – Create a (general purpose) virtual private server and install your own mining software.
Leased hashing power
Lease an amount of hashing power, without having a dedicated physical or virtual computer. (This is, by far, the most popular method of cloud mining.)
What are the pros and cons to cloud mining?
A quiet, cooler home – no constantly humming fans
No added electricity costs
No equipment to sell when mining ceases to be profitable
No ventilation problems with hot equipment
Reduced chance of being let down by mining equipment suppliers.
Risk of fraud
Opaque mining operations
Lower profits – the operators have to cover their costs after all
Contractual warnings that mining operations may cease depending on the price of bitcoin
Lack of control and flexibility.
There are three main hardware categories for bitcoin miners: GPUs, FPGAs, and ASICs.
You can enhance your bitcoin hash rate by adding graphics hardware to your desktop computer. Graphics cards feature graphical processing units (GPUs). These are designed for heavy mathematical lifting so they can calculate all the complex polygons needed in high-end video games. This makes them particularly good at the SHA hashing mathematics necessary to solve transaction blocks.
A Field Programmable Gate Array is an integrated circuit designed to be configured after being built. This enables a mining hardware manufacturer to buy the chips in volume, and then customize them for bitcoin mining before putting them into their own equipment. Because they are customized for mining, they offer performance improvements over CPUs and GPUs. Single-chip FPGAs have been seen operating at around 750 Megahashes/sec, although that’s at the high end. It is of course possible to put more than one chip in a box.
This is where the action’s really at. Application Specific Integrated Circuits (ASICs) are specifically designed to do just one thing: mine bitcoins at mind-crushing speeds, with relatively low power consumption. Because these chips have to be designed specifically for that task and then fabricated, they are expensive and time-consuming to produce – but the speeds are stunning. At the time of writing, units are selling with speeds anywhere from 5-500 Gigahashes/sec (although actually getting some of them to them to ship has been a problem). Vendors are already promising ASIC devices with far more power, stretching up into the 2 Terahashes/sec range.
What is bitcoin mining actually?
You may be surprised, but Bitcoin miners are actually the one’s who confirm transactions. When you wait 10 minutes or so for your bitcoin to confirm, it’s because you are on a miner to mine the ‘block’ or verify the transaction. Miners are rewarded bitcoin for mining blocks.
What’s the advantages and disadvantages to Pool Mining?
Well, when you are pool mining, you are sharing the profits. The disadvantage is to this is that if you are the one solving all the algorithms, you are losing out on potential money. I suggest using pool mining if you are only a beginner to mining.
How many bitcoins are released each day/halving?
This is the reason bitcoin mining is no longer worth it. The reward has gone down and the difficulty has increased; this will continue until there is no more bitcoin to mine.
What happens once every bitcoin is mined?
Well, miners will have income by transaction fees.
What will happen to the price once all the bitcoin is mined?
Since that will not happen during most, if not all, of our lifetimes, it’s just a guess. However, using some logic, the demand will continue to fluctuate up and down while the supply will remain the same. My own prediction is that coin will be much more valuable since the demand (hopefully) be much higher and as stated before, the supply the same. If you know a little economics, you know the price will rise when demand > supply. Remember, this is far into the future, many things can happen which may change the demand of bitcoin to actually drop.
Recommended vocabulary to know:
Addresses (Cryptocurrency addresses) are used to receive and send transactions on the network. An address is a string of alphanumeric characters, but can also be represented as a scannable QR code.
An agreement ledger is distributed ledger used by two or more parties to negotiate and reach agreement.
A distributed ledger providing a durable record of agreements, commitments or statements, providing evidence (attestation) that these agreements, commitments or statements were made.
ASIC is an acronym for “Application Specific Integrated Circuit”. ASICs are silicon chips specifically designed to do a single task. In the case of bitcoin, they are designed to process SHA-256 hashing problems to mine new bitcoins.
The well known cryptocurrency, based on the proof-of-work blockchain.
The specific collection of technologies used by Bitcoin’s ledger, a particular solution. Note that the currency is itself one of these technologies, as it provides the miners with the incentive to mine.
A blockchain is a type of distributed ledger, comprised of unchangable, digitally recorded data in packages called blocks (rather like collating them on to a single sheet of paper). Each block is then ‘chained’ to the next block, using a cryptographic signature. This allows block chains to be used like a ledger, which can be shared and accessed by anyone with the appropriate permissions.
Block height refers to the number of blocks connected together in the block chain. For example, Height 0, would be the very first block, which is also called the Genesis Block.
The reward given to a miner which has successfully hashed a transaction block. Block rewards can be a mixture of coins and transaction fees, depending on the policy used by the cryptocurrency in question, and whether all of the coins have already been successfully mined. The current block reward for the Bitcoin network is 25 bitcoins for each block.
A central ledger refers to a ledger maintained by a central agency.
A confirmation means that the blockchain transaction has been verified by the network. This happens through a process known as mining, in a proof-of-work system (e.g. Bitcoin). Once a transaction is confirmed, it cannot be reversed or double spent. The more confirmations a transaction has, the harder it becomes to perform a double spend attack.
The process a group of peers responsible for maintaining a distributed ledger use to reach consensus on the ledger’s contents.
A point – either in time, or defined in terms of a set number or volume of records to be added to the ledger – where peers meet to agree the state of the ledger.
A form of digital currency based on mathematics, where encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Furthermore, cryptocurrencies operate independently of a central bank.
A digital commodity is a scarce, electronically transferrable, intangible, with a market value.
A digital identity is an online or networked identity adopted or claimed in cyberspace by an individual, organization, or electronic device.
Distributed ledgers are a type of database that are spread across multiple sites, countries or institutions. Records are stored one after the other in a continuous ledger. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.
Difficulty, in Proof-of-Work mining, is how hard it is to verify blocks in a blockchain network. In the Bitcoin network, the difficulty of mining adjusts verifying blocks every 2016 blocks. This is to keep block verification time at ten minutes.
Double spend refers to a scenario, in the Bitcoin network, where someone tries to send a bitcoin transaction to two different recipients at the same time. However, once a bitcoin transaction is confirmed, it makes it nearly impossible to double spend it. The more confirmations that a particular transaction has, the harder it becomes to double spend the bitcoins.
The very first block in a block chain.
Bitcoins have a finite supply, which makes them a scarce digital commodity. The total amount of bitcoins that will ever be issued is 21 million. The number of bitcoins generated per block is decreased 50% every four years. This is called “halving.” The final halving will take place in the year 2140.
The number of hashes that can be performed by a bitcoin miner in a given period of time (usually a second).
An append-only record store, where records are immutable and may hold more general information than financial records.
A peer-to-peer cryptocurrency based on the Scrypt proof-of-work network. Sometimes referred to as the silver of bitcoin’s gold.
The process by which transactions are verified and added to a blockchain. This process of solving cryptographic problems using computing hardware also triggers the release of cryptocurrencies.
Multi-signature (multisig) addresses allow multiple parties to require more than one key to authorize a transaction. The needed number of signatures is agreed at the creation of the address. Multi signature addresses have a much greater resistance to theft.
A currency minted off-ledger and used on-ledger. An example of this would be using distributed ledgers to manage a national currency.
A currency minted on-ledger and used on-ledger. An example of this would be the cryptocurrency, Bitcoin.
P2P (Not play to play, you video game nerds.)
Peer-to-peer (P2P) refers to the decentralized interactions that happen between at least two parties in a highly interconnected network. P2P participants deal directly with each other through a single mediation point.
An actor who can access the ledger: read records or add records to.
An actor that shares responsibility for maintaining the identity and integrity of the ledger.
A permissioned ledger is a ledger where actors must have permission to access the ledger. Permissioned ledgers may have one or many owners. When a new record is added, the ledger’s integrity is checked by a limited consensus process. This is carried out by trusted actors — government departments or banks, for example — which makes maintaining a shared record much simpler that the consensus process used by unpermissioned ledgers. Permissioned block chains provide highly-verifiable data sets because the consensus process creates a digital signature, which can be seen by all parties. A permissioned ledger is usually faster than an unpermissioned ledger.
A currency issued by a private individual or firm, typically secured against uninsured assets.
A private key is a string of data that shows you have access to bitcoins in a specific wallet. Private keys can be thought of as a password; private keys must never be revealed to anyone but you, as they allow you to spend the bitcoins from your bitcoin wallet through a cryptographic signature.
An alternative to the proof-of-work system, in which your existing stake in a cryptocurrency (the amount of that currency that you hold) is used to calculate the amount of that currency that you can mine.
A system that ties mining capability to computational power. Blocks must be hashed, which is in itself an easy computational process, but an additional variable is added to the hashing process to make it more difficult. When a block is successfully hashed, the hashing must have taken some time and computational effort. Thus, a hashed block is considered proof of work.
A payment network built on distributed ledgers that can be used to transfer any currency. The network consists of payment nodes and gateways operated by authorities. Payments are made using a series of IOUs, and the network is based on trust relationships.
A ledger with one master (authoritative) copy of the data, and many slave (non-authoritative) copies.
An alternative proof of work system to SHA-256, designed to be particularly friendly to CPU and GPU miners, while offering little advantage to ASIC miners.
The cryptographic function used as the basis for bitcoin’s proof of work system.
Smart contracts are contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system.
A tokenless ledger refers to a distributed ledger that doesn’t require a native currency to operate.
A collection of transactions on the bitcoin network, gathered into a block that can then be hashed and added to the blockchain.
A small fee imposed on some transactions sent across the bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction.
Unpermissioned ledgers such as Bitcoin have no single owner — indeed, they cannot be owned. The purpose of an unpermissioned ledger is to allow anyone to contribute data to the ledger and for everyone in possession of the ledger to have identical copies. This creates censorship resistance, which means that no actor can prevent a transaction from being added to the ledger. Participants maintain the integrity of the ledger by reaching a consensus about its state
[Source: Blockchain Technologies]
Thank you for reading!
I’ll try to keep this as up to date as possible.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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