How Blockchain Technology Works

This blockchain basics tutorial is designed to deliver a clear introduction of this type of technology as well as to explain its working process

Our readers have already got familiar with all the basic information on Bitcoin starting from its meaning and finishing with the list of things which you can buy using it. Today the Finrazor team presents an article focused on such an invention as the blockchain technology and its working process.

With the introduction of Bitcoin, Satoshi Nakamoto showed us a completely new way of recording and storing information — blockchain technology. And while cryptocurrencies are an incredible tool in managing money, a blockchain has many applications outside finance in store. Developed to their full potential, blockchain-based systems can revolutionize the Internet, business, law, and even government.

What is a blockchain?

Blockchain is not new, strictly speaking, it is rather a newly discovered recipe consisting of previously invented technologies: the Internet, digital signatures, and a shared ledger. Blockchain puts together all these technologies in a way that allows us to record and store data in a completely decentralized trustless manner. A blockchain also is secure as it is extremely difficult to change or delete data from it.

A blockchain is an ever-growing record of data, organized in blocks linked together in a chain by cryptography. In Bitcoin, the data are transaction details, timestamps, and digital signatures.

What does a blockchain need

A blockchain is just a place. It does not work unless it has rules to record and store data by. A set of these rules is called a protocol. Bitcoin has its own protocol, which says what transaction should be like to get added to the blockchain.

Maintaining a blockchain requires computing power. This power is provided by a network, a group of cooperating users, or nodes. Each node has their own copy of the blockchain. As everyone can see everything, there is no way someone can cheat the system. Nodes use their computers to run the blockchain. All nodes in the network are equal and no one node is more important than the other.

How does a blockchain work?

A blockchain grows when a node builds a block and broadcasts it to the network. Others see that the block is valid and add it to their own copies of the blockchain. In Bitcoin, building a block requires a node to collect unconfirmed transactions sent out by Bitcoin users and sealing it in a complex cryptographic way so that no one, not even himself or herself, can change or delete data from the block. The first successfully sealed block gets added to the blockchain, and its creator gets a reward in corresponding cryptocurrency, e.g. bitcoins.

This is the simplest and most common way of finding agreement (consensus) between nodes as to what to add to the blockchain. It, however, is not environment-friendly as it requires a lot of power to build and seal blocks. There are alternative ways of reaching consensus such as Proof-of-Stake, Proof-of-Capacity, and Proof-of-Authority.

Bitcoin

BTC
Price
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Volume, 24h
1,266,310,364 USD
-1.74%
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70,481,615,984 USD
50%
Emission
84%

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A Citigroup job ad suggests blockchain initiatives are heating up at the bank

JPMorgan's got JPMCoin. And Goldman Sachs has its "bitcoin" trading desk.  But don't sleep on Citigroup. The New York-based financial services firm appears to be just as deep in the blockchain world as its cross-town rivals — at least according to a recent crypto job ad.  As per a LinkedIn ad for a blockchain role, one unit of the bank — Citi Markets and Securities Services — is working on initiatives across the crypto landscape.  "Citi Markets and Securities Services business is working on a number of Blockchain/ Distributed Ledger Technology (DLT) and Digital Asset initiatives that span asset classes, businesses and regions," the bank notes. The product manager position is no longer accepting applications (sorry hopefuls!).  The ad asserts that the bank has a wide-range of crypto clients, noting:  "We are working with clients, Financial Market Infrastructures (FMIs) (i.e., exchanges, clearing houses, and settlement venues), and FinTech providers. These initiatives have continued to grow and are in various stages of the innovation and deployment funnel. We expect our engagement to continue to expand as Blockchain/DLT technology continues to evolve and will impact our business on multiple fronts." The role would play a "key part" in driving "multiple internal and external engagements," according to Citigroup. Still, a recent report by CoinDesk shows the bank stepped away from one notable crypto project, dubbed Citicoin. The JPMCoin-like project was never announced and was being worked on out of its Ireland offices.
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Bitcoin [BTC] Futures in good stead against its Spot equivalent: Bitwise Report

Bitcoin [BTC] Futures were thought to be a snippet of the overarching cryptocurrency market, though meager in comparison to the larger spot market. A recent report from Bitwise Asset Management, the crypto-centric investment firm has stated otherwise. In a March 20 report presented to the United States’ Securities and Exchange Commission [SEC], Bitwise analyzed the Chicago Mercantile Exchange [CME], and the Chicago Board Options Exchange, with ten prominent cryptocurrency exchanges’ in terms of their trade volume. Prior to shedding light on their Futures versus Spot findings, it must be noted that the report revealed that 95 percent of the trading volume of unregulated exchanges were seemingly “fake and/or non-economic wash trading”. Taking into account this disparity, the percentage of futures volume to their spot equivalent increases from 1.51 percent to 33.33 percent. Reported Spot volume totaled $6 billion, but after removing the “suspicious exchanges”, the actual volume recorded dropped to $273 million, in comparison to the futures market volume of $91 million. Furthermore, the increase in futures’ volume as a percentage of the spot market has been steadily increasing. From November 2018 to January 2019, the futures market was just over 15 percent, and almost doubled in February 2019 to 33 percent. Since the Futures contracts were approved in December 2017, only on two occasions did the Futures volume, in comparison to the Spot market, shoot above 20 percent; this was in May and August 2018. Futures Volume expressed as a percentage of their Spot Equivalent In terms of their stand-alone trade volume, the CME and the CBOE are in good stead against the world’s top cryptocurrency exchanges. The daily volume the CME, which brings in $84.82 million, ranks second behind Binance’s $110.5 million and ahead of Bitfinex, which records $38.06 million in daily trade volume. The CBOE also fairs well, taking the ninth spot on the ladder, ringing in $6.12 million in daily trade volume. Gemini takes the eight spot with $8.11 million and itBit caps off the top-10 with $5.58 million in daily volume. Notable, among the top-12, eight exchanges are registered within the United States. Despite the CBOE’s comparative success against the spot exchanges’, it has not been performing well against its cross-town rival, the CME. This slump forced the CBOE to delist their Bitcoin Futures [XBT] for March 2019. However, the XBT futures that are yet to expire later in the year will not be off-loaded prematurely. Bitwise also points out that the CME Futures Price tracks the Global Spot Price based on an arbitrage model. Given below is a chart attesting the same: Arbitrage between the CME Futures price and the global Spot price The post Bitcoin [BTC] Futures in good stead against its Spot equivalent: Bitwise Report appeared first on AMBCrypto.
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How Blockchain Can Democratize AI Development

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