The Silicon Valley Triumph: A Brief History of the Digital Revolution
_ Joseph Schumpeter, defined capitalism as a process of creative destruction
_ In 1989, the same year, the Berlin Wall fell, Tim Berners-Lee created the World Wide Web.
_Internet was a force that broke the power of old intermediaries. It was a weapon of the weak against the powerful.
_It was true that the internet broke with old intermediaries, but it replaces them with new and much more powerful intermediaries.
The counterface was a formidable concentration of power and wealth.
It is the users who publish the Facebook content and those who drive the Uber vehicles, but it is the intermediaries who
reap most of the benefits.
Why Software is Eating the World
▹ Marc Andreessen was the creator of the first Internet browser and is the director of Silicon Valley's largest technology
investment fund. This famous article, originally published in The Wall Street Journal, explains the key trend of the digital
revolution: all activities tend to become software.
▹ https://a16z.com/2011/08/20/why-software-is-eating-the-world/
The digital revolution democratized access to information and communications. But it also has a dark side: a trend towards the accumulation of power and wealth.
▹ https://medium.com/@federicoast/el-lado-oscuro-de-la-revolución-digital-9d7370af26b2
The Digital Cash Odyssey:
- You will learn about the history of the development of digital cash, an effort in
which researchers in crypto, economics and software participated. - You will understand the problem of double spending, the main difculty for the
development of a digital payment technology that will preserve two fundamental
characteristics of cash: anonymity and decentralization. - You will understand why, in the absence of digital cash technology, the
development of electronic commerce required large centralized agents as
guarantors of transactions.
Cash is something extraordinary. It allows two strangers to exchange value immediately.
Alice agrees to buy a product from Bob for a coin. She hands over the coin, he hands the product over and they both go on their way. Cash has two fundamental properties; The first is anonymity, the parties can make the transaction without revealing their identity.
The second is decentralization, payment is made directly between the parties, without the intervention of a bank or other agent.
Digital cash faces the problem of double spending.
Alice could create multiple copies of her coin and send one to Bob, one to Matt, and one to Ana, it's like she has a money press. How to avoid that the same coin being spent various times?
Banks, credit cards, paypal, ...This is electronic money but it is not digital cash, because it does not meet the conditions of anonymity and decentralization.
2008 On October 31st of that year, as thousands protested on the streets of New York, someone posted a paper on an internet forum under the pseudonym Satoshi Nakamoto, proposing a technology called Blockchain, for the creation of an electronic currency called Bitcoin.
After years of searching, someone had found an anonymous and decentralized solution. He had discovered the Holy Grail of digital cash.
Brief History of Bitcoin
https://www.ledger.com/academy/crypto/a-brief-history-on-bitcoin-cryptocurrenci
es
Bitcoin, cash of internet
The combination of shared registration and public transactions allows Yap to maintain a monetary
system without centralized registration. Deep down, the Blockchain reproduces the logic of the Yap's monetary system.
The Yap considered that the database distributed among the members of the tribe was the only source of truth about the ownership of the rai stones.
The bitcoin network considers the database distributed among computers to be the only source of truth about
bitcoin's ownership. Alice agrees to buy a product from Bob in exchange for a bitcoin.
Before delivering the product, Bob has to make sure that Alice's account has funds.
From Alice to Bob:
Alice owns the X address on the bitcoin network, represented by a long set of digits. It islike your bitcoin bank account.
Thanks to a private key, Alice can transact with funds from that address. The private key is the equivalent of your bank account password. Bob owns the Y address, also represented by a long set of digits. Once the purchase of the product has been agreed, Alice announces to the network, to transfer a bitcoin from the X address to the Y address.
The nodes ask the shared database to see if there are enough funds in account X.
Since the registration is open, everyone can see how much money X has. In case there is enough, a bitcoin is transferred to account Y. All computers update the registry, there is one less bitcoin in account X and there is one more bitcoin in account Y.
Anonymity:
The nodes only see a payment from X to Y, but they don't know that Alice is behind account X, or that Bob is behind account Y. Bitcoin addresses can be created without giving any personal information, and this allows you to meet the second condition of digital cash, anonymity.
As inventor Richard Buckminster Fuller said, you will never change things by fighting against existing reality.
Build a new model that makes the existing model obsolete.
This video offers a didactic explanation to technical concepts of blockchain such as cryptographic hash functions, mining and proof of work to reach a consensus on a distributed registry.
The original paper where Satoshi Nakamoto introduced bitcoin and blockchain technology.
https://bitcoin.org/bitcoin.pdf
Blockchain world basics
It is a chain of information blocks linked together, by cryptographic algorithms.
It is not issued by any central authority. The bitcoin blockchain is a record of all actions done with bitcoin since January 3, 2009. Computers are paid for collaborating and maintaining the database.
At the Bitcoin.org address, you can download a complete copy of all transactions made from the start on the bitcoin
network. Since the system is designed to maintain anonymity, you will not know who made them, but you will be able to see the addresses and values. When Satoshi Nakamoto developed the software, he established that a total of 21 million bitcoin would be created in all of history.
The last one is expected to enter circulation in 2140. Each bitcoin is divisible to 100 millionth. The smallest unit is known as a satoshi.
Altcoins: Some altcoins have their own blockchain, that is, their own network of computers to record transactions.
Others operate on the bitcoin blockchain, that is, they use the bitcoin network to record transactions. Bitcoin was only the first cryptocurrency. Then many others emerged. Here, the main currencies of the ecosystem.
https://news.bitcoin.com/altcoins-why-over-5000/
Litecoin, is a cryptocurrency with its own blockchain. Litecoin transactions are recorded on the litecoin blockchain, which has a somewhat different algorithm than bitcoin, built for faster validation and transactions. Ether is another cryptocurrency that has its own blockchain, it's called ethereum, and it has a more sophisticated programming language.
The XCP cryptocurrency is built on the bitcoin blockchain, it is an example of colored
coin. At coinmarketcap.com, we can see the approximately 800 cryptocurrencies that existed in September 2017, most were unknown and of very little value.
A few like bitcoin and ether had million dollar values, soon there will be many more.
We are witnessing the birth of an industry.
A basic guide on the basic terms of blockchain, bitcoin and other cryptocurrencies.
https://blog.goodaudience.com/blockchain-terminology-d903758d6bd
Ethereum:
In this post, blockchain creator Ethereum Vitalik Buterin explains the importance of decentralization on blockchain.
https://medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b76a274