Cryptocurrency: some time ago -- a couple of weeks or a couple of months, I forget, I mentioned that having initially been wary of cryptocurrency, I am now bullish. Having mentioned that a reader sent me this:
I am in the "tech" industry so I have exposure to blockchain. Here is the first link. This one of the most understandable explanations of the process I have encountered:Yes, warmists should be very, very concerned about blockchain. The cryptocurrency miners use huge amounts of electricity. At the rate "miners" are using electricity, some countries that signed the Paris Protocol To Control The Earth's Climate will have to start burning coal, again, to make electricity needed by the miners.
If you like that here is the follow up on how Microsoft (sorry it is not Apple) is implementing it.
An interesting aspect of the second video is how he addresses the "energy use" aspects of the process. If I remember correctly when I first saw this it was during the bitcoin boom and warmists were worried about the CO2 impact.
From what I can tell, the reader did not say he was bullish, neutral, or bearish with regard to cryptocurrency.
For the record, simply because I am bullish on cryptocurrency does not mean I have any money invested in the sector. I am bullish for Tesla to succeed but I am not financially invested in the company. I think it's a cool car and if I had all the money in the world, I would buy one or two or three.
- cryptocurrency
- distributed currency
- keep track of who has what
- the view has to be consistent across the platform
- digital coin is not physical
- if the transfer is valid, the exchange is over; the buyer "disappers"
- public - anonymous
- must be scalable
- foundation: cryptography
- hashing: taking a block of data and creating a digest of that data -- a small representation
- a ton of data can be converted to a small bit of data
- each block of data will have its own digest
- signing: take the digest and then use cryptographic key to create a signature for that digest;
- public - private key
- the white board begins at 5:20
- transaction: Mark gives Seth five bitcoins
- Seth now has the five coins -- wants to give George five coins
- sign the hash of the previous transaction -- the public key of George sees that transaction
- proves that Seth has those five coins
- Seth signs the Seth-George transaction with Seth's private key, but once signed everyone using the public key can trace back / validate the five coins
- George "has" the five coins but to do anything with them, he has to do another transaction
- George to Veronica
- how are all these folks in consensus that all those transactions took place
- generation of blocks and generation of transactions
- take all the transactions that might have occurred during some point in time; put them in a block
- the hash of that whole block refers back to the previous block/hash
- distributed consensus algorithm was the problem that needed to be solved
- mining
- distributed consensus algorithm was the problem that needed to be solved
- solved with "mining"
- mining: distributed consensus algorithm
- power needed to mine -- sidebar
- anyone can try to mine a block
- to mine a block, must solve a cp that is computationally intense
- generate a hash;
- a field in the block called a nonce
- the block: the hash; the transactions (the digests); and the nonce -- assign a value
- that value must be less than a certain value (only so many leading zeroes)
- it will take about ten minutes to solve a problem
- it becomes a race
- trying to solve the puzzle -- everyone racing to be first
- some miner solves the problem; shows everyone the solution; once everyone sees the solution, that becomes the next block in the chain
- what's the value for the miner
- computationally expensive and getting more computationally expensive every day
- for solving the problem, one gets a "bit" of bitcoin as payment
- economic incentive to make sure they are right
- also there are fees that one can get if the economic incentive gets too small
- miners will have to "ante" bitcoin to replenish the pool of bitcoin for economic incentives
- to be continued -- begin at 18 minutes
