Revolutionizing Transactions With Cryptocurrencies Essay.

Types of Cryptocurrencies

Question:

Discuss about the Bitcoin Block Chain of Nakamoto.

The Satoshi Nakamoto (2008) started to mine Bitcoin block chain earlier before the world could realize about the cryptocurrency. However, Nakamoto did not build Bitcoin in vacuum but he strongly stood with cryptographic and able software experts. The Satoshi Nakamoto electronic software was version was freely and flexible to allow members to pay for their items online directly from one organization to another without going to those particular financial organizations. Though the online payment was not fully open software due to the third party who could lose some justified document that showed how the transactions were taking place, Satoshi Nakamoto introduced a solution which he called the peer to peer network. This provided some timestamps transactions which were in form of an outgoing chain forming a document of information that could not be changed by an individual. The chain served as an evidence that the long chain was coming from the main CPU (Erik , 2016) power with the largest pool that was controlling the software (Erik , 2016). Then the power CPU was being controlled by the nodes which were not active in attacking the network.

Looking at other types of crypto like the Litecoin which was introduced to people (in the year 2011) was among the cryptocurrencies that shadowed bitcoin and was referred to as ‘silver to Bitcoin’s gold.’ The latter was invented by a graduate student by the name Charlie Lee. This crypto is based on the global network financial method of paying transactions. Ethereum (ETH) is another type of crypto which was launched in the year 2015 and it is a software which is decentralized thus allowing good contract to be run with honesty and trust. It is run in its own platform known as the cryptographic token which is an application moving inside the Ethereum (John, 2015).    

Due to (satoshi Nakamoto invention 2015), business in internet has been the most exclusive and trusted instruction serving the people through the third party operation of using electronic payments. Even if the system still works effectively in different organizations there are still some few weaknesses which it is undergoing because of trust model. One of the problem that the Nakamoto project is going through is that there are no non reversible transactions to avoid dispute with other organization that might be using the network. Therefore, the cost of lack of reversal to people who are using the network have become a limitation to their accessibility. This make the crypto trust to be limited by the consumers who are widely using the software.

The Importance of Trust in Financial Exchanges

The most important need of using the crypto as an electronic system when paying or in financial institution is due to its trust. The concept of allowing two or more parties to participate in the use of this network without being concerned about the third party is what is mostly required. This has been taken care of by the peer to peer timestamps which gives the honest transactions throughout the whole process of chronological transaction and therefore the users are assured of transparency cooperation as long as the power CPU control are available (Tyler, 2017). Just like the Dash cryptocurrencies which was launched in the year 2014, it has the potential of using the CPU or GPU to deliver transparency and honesty records.

In the (Satoshi Nakamoto) network, there are a number of revolutions which occur. Transactions era is one of the most proposed revolutions which are taking place. This is where the owner of the coin transfers that coin to another individual by digitally visiting the hash and the process continue forming a chain of possession. These transactions cannot show whether the owner of the coin double-spend it and there for a common solution must be introduced to show that the system is trustful and it can check the double spending.  The timestamp server offers the solution to the first revolution and therefor becomes the second revolution of the crypto as discussed by (Satoshi Natamoto 2009). The timestamps are always included in the hash carrying a chain of information which reinforce the honesty of the network (Bill, 2017).

The proof-of-work will be another revolution which will include the scanning hash and it should have zero bids to give ineffective information about the honesty of the network. Comparing the Ripple (XRP) which was released in the year 2012 it has a very powerful proof-of-work with end to end transparency and at a very low price. The (XRP) does not require mining since it reduces the use of computing control and minimizes the network inactivity.  Never the less, the proof-of-work also gives the determination of making decision basing the argument on the length of the chain and also the number of the CPU powers which have been scanned (Amanda, 2015). When making a decision, one CPU is assumed to be a one vote and the chain that grow fastest is said to be the best honest chain. Another currency revolution is the network which is composed of nodes which held in determining or considering the longest chain to be the correct and honest and they keep on extending it. If the nodes detect a new chain that is growing longer than the one that it was assuming to be long, the nodes just shift to the new branch of chain which is longer. This process is carried out by the networking revolution.

The Role of Peer-to-Peer Timestamps in Ensuring Honesty

Simplified payment verification can be done without network nodes if the user has a record of a copy of proof-of-work which will therefore give the longest chain linking to the timestamps. As much as honesty is required the network and the nodes can be verified to overpower the attack. Planning a Bitcoin organization can be very profitable if only treated as a business. To start a small Bitcoin facility, you must have a low revenue cost which is affordable. It relaxed to start a Bitcoin taking out device and controlling it under little supervision. Some of the factors that one should consider when starting a Bitcoin are the equipment which are available. If you cannot get the good equipment at a better price, then you should not think of starting a Bitcoin. A good Bitcoin should be able to generate more than 0.5 Bitcoin in every single month. Basically, since the electricity is used when mining the Bitcoin, it therefore means that the electricity is been converted to Bitcoin and there for the cost of electricity should be as low as possible so as to reduce the input in production hence maximizing the profit (Nathan, 2017). Sole bitcoin miner should consider the electricity price in his or her location area. It is also advisable to use solar power in areas where the sun shining is very hot because it can generate a supply of nearby 100 watts which means you will need to have more than one solar panels in order to produce 12000 watts which are required to mine bitcoin. In order to mine a bitcoin, you need to have other things like the power cords that correct the power from the PDU to power provisions (Jason, 2015). During mining of bitcoin a lot of heat is produced and therefor o cooling machine is required.

Crypto currencies have some historical provoke of losing currency. Basing on the fact that the banking supervision is under the technology system which allows all the participant to take place freely. In Chinese central bank they was a loss of 20 per cent of crypto (Erik , 2016). The great winners in this technology are the clients since the innovators have failed to change the elementary issues in a regulated organization. It is possible a bank to loss crypto currency if the business is pocketed by the issue of silvers or bank note (Jason, 2015). The central bank fear of their responsibility that they monitor all the payment system which can make them fall. Nevertheless, we should be assured that as crypto currencies grow the more the large banks like the central bank look foward to crimp their use. At that time crypto will be the most appropriate capital to be used in the markets with such organized crimes. The crypto technology therefore will be efficient type of electronic payment helping the community.

The Use of Proof-of-Work in Decision-Making

Bitcoin is an internet program which has been installed and processed to keep data on how the payments are being made (Merkle, 2015). Therefore, it is very difficult for a criminal to use Bitcoin on cheating, recently it was discovered that one could buy and pay goods with Bitcoin and never be traced from where he or she has done the transaction (Messias & Avilla, n.d.). On February 2015 Ross Ulbricht a 31 years old United States native was arrested after using the Bitcoin network to pay for illegal drug worth one billion dollars. Another case of Tomáš Ji?íkovský of Czech national was realized after he had stolen forty million from Bitcoin. This shows that Bitcoin is a powerful and honest tool of transacting secret. Unlike the banks bitcoin has no federal reserve (Jason, 2017) , it has no bank and it has no physical notes thus making it better because crypto create a data that is public (Satoshi Nakamoto 2008). Bitcoins are associated with strings of message and addresses. Bitcoin is recorded in form of block chains which are then distributed to the internet having the hidden evidence of the Bitcoin owner. The responsibility of running the system without cheating is done by the volunteer who is refeed to us as Bitcoin miners. The Bitcoin miner provide the proof of work which gives the honest of the Bitcoin itself (Haber, 2012).

Chinese is blowy developing the crypto technological currency that aim to rival the explosion of cryptocurrencies. Over 730 million users of internet are now paying their good and services through the online or the digital transaction progression. The Chinese government have a plan of five years’ project to invest in the financial transactions which are computerized or digitalized (from 2006-2020) (Erik , 2016). They are also targeting to high network technology with big data like the 5G and the Internet of Things (IOT).  Meanwhile a big boom of crypto and bitcoin have a large block chain in Chinese technology. Some of the implication that the Chinese government have started is to control and minimize bitcoin exchange market which begun in the year 2017 when the People Bank of China said that it was finding out the need of cryptocurrencies in facilitating money flight (Bill, 2017).

The Chinese have a plan to reduce the state cryptocurrencies landscape in the long-run business and they have announced the reason as to why they want to introduce the RMB digital exchange that gives the administration full governorship and oversight. From the Chinese government perspective, it is clear that the digital currency gives a smooth financial transaction which are honesty and there for they are focusing in implementing these networking system. China has also concluded that through the new digital currency facility they will be able to access other countries worldwide in an effective manner hence the selling and buying of goods and services will be cheap, less time consuming and effective (Amanda, 2015).

It is true to say that the crypto technological method of paying financial transaction is an honest and transparency method which has been put in consideration by the developing countries like China. Nevertheless, different individuals have come out with their own cryptocurrencies and they have been making profit in large amount. We have also seen that the cryptocurrencies have the responsibility of keeping the secret, security and privacy from any kind of payment that an organization can make (Feller, 2015). Crypto is also giving a free entrance to people, organization and nations hence promoting an effective business transaction throughout the operations. It is encouraging and advisable to all nations which have not digitalized to cryptocurrencies to follow the roots of China and get in to a digitalized technology which facilitate a fast and less time consuming transactions (John, 2015).

References

Amanda, 2015. NEW ERA OF CLOUD MINING. Dark coin is Now Dash, and Not a Moment Too Soon, pp. 45-56.

Bill, 2017. Beijins moves to reign bitcoin aren`t deterring china`s new cryptocurrency, 17 April.

Erik , 2016. MOTHERBOARD. Inside the Chinese Bitcoin Mine thats Grossing $ 1.5M a Month.

Jason, 2015. Canadas new bitcoin market enlargement. SmartNews, pp. 33-56.

Jason, 2017. SMARTNEWS. Canadas New Two Dollar Coins Glow In the Dark, pp. 23-29.

John, 2015. Rare Look Inside A Massive Bitcoin Mine. Live Inside a Secret Chinese Bitcoin, 6 Feb.

Tyler, 2017. ZeroHedge. Central Banks are Driving Many to cryptocurrencies, pp. 47-59.

Eagle, E., 2015. Is Bitcoin Rat Poison: Cryptocurrency Crime and Counterfeiting. s.l.:s.n.

Feller, w., 2015. An introduction to probability theory and its application. s.l.:s.n.

Haber, 2012. How to time stamp a digital document. In journal of cryptology, Volume vol 3, pp. 99-111.

Haber, 2013. Improving the efficiency and reliability of digital time stamping in sequences 11. Methods in communication,security and computer science, Tuesday April, pp. 28-45.

Massias, H. & Avilla, X. S., 2016. Design of secure timestamping service with minimal trust requirements.  In 20th symposium on information Theory in the Benelux, Volume 3, pp. 33-56.

Merkle, 2015. Protocol for public key crptosystems. Symposium on security and security and privacy, pp.   122-129.

Nathan, 2017. Chinese Government is Developing its Own Cryptocurrency, s.l.: s.n.