Difference between revisions of "Cryptocurrency"
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A general idea is the mathematical expression of a one-way street, which means that the result of a calculation can be published safely; even if the exact algorithm is known, it is not feasable (today) to reverse engineer the components (secrets) which were used as input to derive the output. This concept is found in both fingerprinting ([[hash]]es, or checksums) and [[public key algorithm]]s. | A general idea is the mathematical expression of a one-way street, which means that the result of a calculation can be published safely; even if the exact algorithm is known, it is not feasable (today) to reverse engineer the components (secrets) which were used as input to derive the output. This concept is found in both fingerprinting ([[hash]]es, or checksums) and [[public key algorithm]]s. | ||
− | The metaphor is "Alice" forging both a lock and a key in such a way that the lock does not reveal the | + | The metaphor is "Alice" forging both a lock and a key in such a way that the lock does not reveal the shape of the key. She may then use a fingerprint (hash) of the lock (pubkey) as marker or address and submit this address to nodes who agree if it is a valid type. Once included in the big "book" (blockchain), "Bob" may propose to add to the address. To withdraw, however, or subtract from the address Alices' (secret) key is needed. She "owns" the address. Note that the making of the address takes place off-chain, and even off-line, at the home of Alice (with a slow home computer) and Alice does not depend in any way on other more powerful entities to make use of the blockchain at this stage. |
− | Consensus must be reached by the nodes before finalizing the blockchain in a solid state. The [[censensus algorithm]] is a central part of the validation of contracts (transactions). | + | Consensus must be reached by the nodes before finalizing the blockchain in a solid state. The [[censensus algorithm]] is a central part of the validation of contracts (transactions). The number of units (if designed as currency) may or may not be tied to the validation process. The number of units (if designed as currency) may or may not be constant or limited. Often, a '''finite''' number of units is chosen. |
+ | |||
+ | As a general rule mining refers to increasing the miner's account in exchange for up-time, i.e. contribution to the whole network. To encourage up-time, mining is made as slow as possible - but also wasting CPU cycles while solving tricky mathematical problems. Other incentives for up-time include fees ("gas"). Higher transaction fees encourages faster execution. Fees are nevertheless voluntary (in theory). | ||
==Centralization== | ==Centralization== |
Revision as of 12:10, 16 March 2022
![]() ![]() (currency, p2p) ![]() ![]() | |
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Interest of | • Daniel Bruno • Agustín Carstens • Dollar Vigilante • Nikolai Mushegian |
Digital currencies with computer generated security protection. |
The BIS and other central banks have announced, that CBDC will be introduced until 2025. As the lack of understanding of our current monetary system has led to exploitation[citation needed] of the 99% by the 1%, this page will set out to explain the mechanics of digital currencies in the simplest terms possible.
Cryptocurrency, sometimes called crypto-currency or (confusingly) just "crypto", is a form of currency that exists digitally or virtually and uses cryptography to secure transactions.
Contents
General components of digital currencies
- A "book" where entries and changes are stored corresponding to addresses (much like in a file system); entries may consist of
- constant values (i.e. past transactions)
- variable values and executables (i.e. scripts, smart contracts, NFTs)
- A network of computers owned by one or more authorities with server status (called nodes), i.e. powerful machines with high up-time and fast interconnection. Nodes may sit in one room or be spread all over the globe. Some nodes a required to have 100% up-time.
- A consensus protocol in case the nodes disagree about entries which should be written to the "book"
- A public key algorithm. To enter contracts a secret key is needed for authentification
Software components
A general idea is the mathematical expression of a one-way street, which means that the result of a calculation can be published safely; even if the exact algorithm is known, it is not feasable (today) to reverse engineer the components (secrets) which were used as input to derive the output. This concept is found in both fingerprinting (hashes, or checksums) and public key algorithms.
The metaphor is "Alice" forging both a lock and a key in such a way that the lock does not reveal the shape of the key. She may then use a fingerprint (hash) of the lock (pubkey) as marker or address and submit this address to nodes who agree if it is a valid type. Once included in the big "book" (blockchain), "Bob" may propose to add to the address. To withdraw, however, or subtract from the address Alices' (secret) key is needed. She "owns" the address. Note that the making of the address takes place off-chain, and even off-line, at the home of Alice (with a slow home computer) and Alice does not depend in any way on other more powerful entities to make use of the blockchain at this stage.
Consensus must be reached by the nodes before finalizing the blockchain in a solid state. The censensus algorithm is a central part of the validation of contracts (transactions). The number of units (if designed as currency) may or may not be tied to the validation process. The number of units (if designed as currency) may or may not be constant or limited. Often, a finite number of units is chosen.
As a general rule mining refers to increasing the miner's account in exchange for up-time, i.e. contribution to the whole network. To encourage up-time, mining is made as slow as possible - but also wasting CPU cycles while solving tricky mathematical problems. Other incentives for up-time include fees ("gas"). Higher transaction fees encourages faster execution. Fees are nevertheless voluntary (in theory).
Centralization
Cryptocurrencies other than CBDC don't generally have a central issuing or regulating authority, instead using a decentralized system, e.g. a p2p network to store the blockchain. However, there are many varieties that are centralized - with the promise to be "decentralized" later and conrolled by a single authority.
Process
"In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network"[1]. "Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. Not reliant on any central authority, such as a government or bank, to uphold or maintain it draws people who favour anonymity. Bitcoin is pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys (or "addresses")".[2]
Blame
Cryptocurrency mining was blamed by commercially-controlled media for supply chain shortages.[3]
Ban
China banned cryptocurrencies in 2021. The WEF surmised cryptocurrencies were facilitating capital flight from China's markets, bypassing conventional restrictions.[4]
Examples
Page name | Description |
---|---|
Bitcoin | A cryptocurrency |
CBDC | Blockchain hosted replacement for cash, run by central banks |
Lightening network | Bitcoin micropayment protocoll |
Related Quotations
Page | Quote | Author | Date |
---|---|---|---|
CBDC | “We intend to establish the equivalence with cash and there is a huge difference there, for example in cash we don’t know who is using a 100 dollar bill today ... the key difference with the CBDC is that the central bank will have absolute control on the rules and regulations that will determine the use regarding that expression of central bank liability and also we will have the technology to enforce that.” | Agustín Carstens | October 2020 |
Whitney Webb | “Bitcoiners should pay close attention to these developments as the DOJ in particular has attempted to paint bitcoin as the payment of choice for well-known terror groups like ISIS and al-Qaida, signaling that the working group proposed by this bill will likely seek to specifically target bitcoin. Adding to this concern is the fact that a slew of recent mainstream media reports — which cite Treasury and FinCEN officials, DOJ officials and CIA analysts — have claimed specifically that “terrorists are turning to bitcoin, and they’re learning fast”, that bitcoin is the “new frontier in terror financing”, and that “bitcoin is helping terrorists secretly fund their deadly attacks”. Even the prominent military think tank RAND Corporation has argued that “bitcoin and the dark web” are the newest terrorist threat.” | Whitney Webb | September 2023 |
Related Documents
Title | Type | Publication date | Author(s) | Description |
---|---|---|---|---|
Declaration of Currency Independence | declaration | May 2021 | John McAfee | The main author, John McAfee, died mysteriously in jail the next month. |
Declaration of Monetary Independence | declaration | 2021 | Mark Maraia Mike Hobart | |
Document:Silicon Valley’s Trump supporters are dicing with the death of democracy | Wikispooks Page | 4 August 2024 | John Naughton | Speaking to a Christian convention in Florida the other day, Donald Trump said: “Get out and vote. Just this time. You won’t have to do it any more. Four more years, you know what: it’ll be fixed, it’ll be fine. You won’t have to vote any more, my beautiful Christians.” |
References
- ↑ https://en.wikipedia.org/wiki/Cryptocurrency#Mining
- ↑ https://web.archive.org/web/20181219093844/https://www.bloomberg.com/news/articles/2018-09-13/mystery-of-the-2-billion-bitcoin-whale-that-fueled-a-selloff
- ↑ https://www.economist.com/graphic-detail/2021/06/19/crypto-miners-are-probably-to-blame-for-the-graphics-chip-shortage
- ↑ https://www.weforum.org/agenda/2022/01/what-s-behind-china-s-cryptocurrency-ban/