Do you speak blockchain? | News on paper jams

LOCK CHAIN

Or “blockchain” is an official public information record. Each block (or folder) has a size in megabytes.

MINORS

Since there is no central authority (the bank in a banking transaction), the operations must be validated by the miners, that is, they must solve a complex mathematical operation. The first to find the solution pockets the reward (a bitcoin, for example).

MINING POOL

As the demand for bitcoin grew, miners tried to solve the mathematical problem of the bitcoin blockchain to get the reward. Then they got together to get more computing power and be the first to find the solution. In 2014, Dutch pool GHash.io controlled 55% of the world’s computing power – 51% theoretically enough to detect bitcoin. Before committing to reducing one’s power.

HASH

The hash is a bit like the DNA of a block, a string of bits that can store all kinds of data (text, image, etc.). Bitcoin’s “hash” function is SHA-256. Each block has a hash that starts with the previous block’s hash, which helps put them in order. A block includes the hash of the previous block, the data, the signature (to know who the transaction belongs to), the proof of work, and the hash of the block being validated.

WORK TEST

Best known as proof of work. Each time a block is created, a hash value is set. Miners will need to find the hash of the next block from the last, the algorithm and a “nonce” (a special number) to satisfy certain characteristics (for example, the next hash must start with at least eight 0s). They will try until they find a matching hash. For that, they need large computing powers … which means the process is heavily criticized for being greedy for electricity.

PROOF OF PARTICIPATION

Or the proof of stake, no longer consists in performing complicated mathematical calculations, but in demonstrating that you own a certain amount of the blockchain tokens. This amount allows the miners to validate the additional blocks of the blockchain and thus to receive the reward. Less energy-intensive, it is also considered less safe. Ethereum, the second largest blockchain in the world, is expected to use PoS in version 2, which will be out soon.

ALTCOIN

These are all currencies other than bitcoin which are based on blockchain.

STABILECOIN

It is a cryptocurrency backed by more traditional currencies such as the dollar or the euro. The whole secret is theoretically to keep as many stablecoins as there are dollars in your deposits. Any change in both will result in buy and sell movements that must bring the PEG back to the fixed rate (one dollar for a USD Tether, for example).

SMART CONTRACT

Or “smart contract”, on ethereum, allows you to perform a maneuver when a condition or series of conditions are met. A smart contract may require the reader to donate one euro each time they read this article when they turn the page. Without the reader or the person who wrote it intervening.

DAPP

Writes DApps, it’s an application that bundles a collection of standalone smart contracts.

Challenge

Or “decentralized finance” is the use of these smart contracts to get rid of banks, insurance companies, financial institutions, even states.

DLT

Or the distributed ledger technology (for the distributed ledger technology) was highlighted with the development of the bitcoin blockchain, which is just a special type of DLT. A distributed ledger does not have a central administrator or centralized data store. It can be used in finance or the Internet of Things.

This article was written for the revised edition of
Paperjam of July 2022
published June 22, 2022.

The magazine content is produced exclusively for the magazine. It is published on the site to contribute to the complete Paperjam archive.

Click on this link to subscribe to the magazine.

Is your company a member of the Paperjam Club? You can apply for a subscription in your name. Tell us away
[email protected]

Leave a Comment