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WikiCoin: What is Blockchain Technology and How it Works

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  • Katya Michaels
    📚 WikiCoin

    Although Blockchain is revolutionizing the way we see any kind of digital transaction, the technology itself is not new.

WikiCoin: What is Blockchain Technology and How it Works
Cover image via www.123rf.com

At first glance, Blockchains may look just like other records of information that are maintained by a network of users, such as Wikipedia or GitHub. In fact, there are even similarities; the entries are contributed and updated by a community of participants, and no single person controls all of the information. However, at the core, there are key features that distinguish Blockchain networks.

Innovative application of old technologies

Although the concept of Blockchain being used for cryptocurrency was first introduced in Satoshi Nakamoto’s 2008 white paper, the technology itself is not new. Rather, Blockchain is an innovative combination of three existing technologies: private key cryptography, a distributed network with an open ledger, and incentivization protocols.

Private key cryptography

On the Blockchain, every participant’s secure digital identity reference is based on a combination of a public and a private cryptographic key. Together, they form a digital signature which authenticates the user. The next step is authorization — a way to verify that the user has the appropriate resources and permissions to complete a given transaction. Authorization is achieved through a distributed, peer-to-peer network.

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Distributed network

Unlike centralized databases, a Blockchain does not have a main server with a master file holding all of the data. Instead, Blockchain is a distributed network where every client, or node, uses mathematical verification to confirm transactions broadcasted by other nodes. As every node arrives at the same conclusion and updates the record independently, the network’s distributed consensus becomes a de-facto official record. This way, Blockchain eliminates the need for a trusted third party to secure digital relationships and reduces the risk of centralized failure.

Transactions

When a user initiates a transaction (such as sending Bitcoin), their private key is combined with the public key of the recipient, as well as the timestamp, description, and other relevant transaction information. This block of data is broadcast to the network and verified through the consensus of nodes that have “witnessed” this transaction. Finally, the transaction is added to the official record.

Protocol

The more nodes that can verify a transaction, the more secure the network will be. Different Blockchains use different methods for creating incentives and achieving distributed consensus: some are based on Proof of Work, some on Proof of Stake. Each Blockchain’s protocol outlines specific rules for verifying transactions, adding new blocks and allocating rewards. In any instance, Blockchains attempt to find fresh solutions to the ancient “tragedy of the commons” problem by engaging users’ self-interest to fulfill a public need.

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About the author

Katya Michaels is a writer and editor living in California. She is passionate about excellent writing and dedicated journalism, but ambivalent about the Oxford comma. When not crusading for the rescue of long-form content, she watches sunsets, scuba dives, plays Chopin Nocturnes and teaches her daughter to express herself without the use of emoticons.

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Bitcoin, XRP Receive Massive Exposure in 2019

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  • Yuri Molchan
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    Bitcoin has not only seen a significant rise this year but also got into the global spotlight along with other crypto thanks to bankers and politicians

Bitcoin, XRP Receive Massive Exposure in 2019
Cover image via 123rf.com

If 2018 was the year of the crypto winter, in 2019 Bitcoin and altcoins, such as XRP, have come into spotlight. 

Trump mentions Bitcoin and Libra

The major portion of world's attention has been given to Bitcoin by the current US president Donald Trump who has recently cursed BTC on his Twitter account. He mentioned BTC several times on Twitter, criticizing it but still giving it massive attention.

Trump also tweeted about Libra that has faced enormous resistance from the US Congress and bankers not only in the US but globally. This has made the awareness of Bitcoin and crypto in general much bigger on a global scale.

Presidential candidates talk Bitcoin

A US presidential candidate Andrew Yang, who intends to introduce Universal Basic Income (UBI) in the future, should he win, has several times mentioned Bitcoin publicly. He expressed an idea that in years to come UBI could be paid in BTC, making it not Universal Basic Income but Universal Bitcoin Income.

Another presidential candidate, the controversial eccentric John McAfee, who has been on the run since around May – avoiding meet-ups with the IRS and CIA – confessed that he does not actually want to become President. All he wants is to raise crypto awareness and get Bitcoin exposed to masses of people.

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XRP now used by MoneyGram

This year, the crypto giant Ripple bought a large stake at the global remittance service MoneyGram. Now, MoneyGram uses XRP to wire funds to Mexico via the Bitso exchange. The company is planning to add more corridors for XRP utility and instant and cheap payments that the Ripple technology provides. 

Besides, the Ripple CEO Brad Garlinghouse gave an interview to CNN which was crucial not only for XRP investors but for the crypto community overall.

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About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

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