Cryptocurrency - Can Micro Incentives Yield Macro Trust ?
In this module, we will consider Bitcoin and other Cryptocurrency. We will review this first wave application of crypto infrastructure and consider the question of whether Micro Incentives Yield Macro Trust ?
I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW
EVERY TRANSACTION CONSISTS OF UNSPENT TRANSACTION OUTPUTS SMART CONTRACTS ARE LIMITED MOSTLY TO LOCKING UNLOCKING FUNDS USES A BLOCKCHAIN TWO TYPES OF ACCOUNTS EXTERNALLY FACING HOLDS CRYPTO CONTRACT ACCOUNTS SMART CONTRACTS SMART CONTRACTS ARE EXECUTED BY ALL NODES ON THE NETWORK
ELECTRONIC COIN AS A CHAIN OF DIGITAL SIGNATURES. EACH OWNER TRANSFERS THE COIN TO THE NEXT BY DIGITALLY SIGNING A HASH OF THE PREVIOUS TRANSACTION AND THE PUBLIC KEY OF THE NEXT OWNER AND ADDING THESE TO THE END OF THE COIN. A PAYEE CAN VERIFY THE SIGNATURES TO VERIFY THE CHAIN OF OWNERSHIP.” SATOSHI NAKAMOTO BITCOIN.ORG/BITCOIN.PDF
NETWORK A NODE ON THE BITCOIN NETWORK RECEIVES THE TRANSACTION THE NODE VALIDATES THE TRANSACTION AND PROPAGATES IT TO THE NODES IT IS CONNECTED EVERY NODE INDEPENDENTLY VALIDATES ALL TRANSACTIONS THEY RECEIVE
NUMBER THE NETWORK IS CONFIGURED SO THAT SOMEONE SHOULD SUCCESSFULLY GUESS A NONCE ONCE EVERY 10 MINUTES BLOCKCHAINLAWCLASS.COM NOTE: A NONCE IS AN ARBITRARY NUMBER THAT CAN BE USED JUST ONCE IN A CRYPTOGRAPHIC COMMUNICATION ( HTTPS://EN.WIKIPEDIA.ORG/WIKI/ CRYPTOGRAPHIC_NONCE )
BLOCKS BASED UPON A BACKWARD LOOKING FORMULA DIFFICULTY = DIFFICULTY_1_TARGET / CURRENT_TARGET (TARGET IS A 256 BIT NUMBER) BLOCKCHAINLAWCLASS.COM https://en.bitcoin.it/wiki/Difficulty
APPROXIMATED BY CALCULATING: TIME = DIFFICULTY * 2**32 / HASHRATE ONCE A MINER GUESSES A CORRECT NONCE THEY TRANSMIT IT WITH THEIR NEW BLOCK TO THE NETWORK BLOCKCHAINLAWCLASS.COM https://en.bitcoin.it/wiki/Difficulty
TO TRIGGERING CONDITIONS TYPICALLY THE CODE EXECUTES WHEN ETHER IS SENT TO THE ACCOUNT WHERE THE CONTRACT CODE IS STORED CODE IS DISTRIBUTED ACROSS THE ETHEREUM NETWORK ABLE TO BE EXECUTED ETHER IS USED AS GAS TO FUEL THE EXECUTION OF SMART CONTRACTS
YOU OWN A PAIR OF KEYS THAT ALLOWS YOU TO SEND AND RECEIVE THAT CRYPTOCURRENCY WALLETS MANAGE THE KEYS FOR YOU https://blockgeeks.com/guides/cryptocurrency-wallet-guide/
Cynthia Dwork and Moni Naor back in 1993, but the term “proof of work” was coined by Markus Jakobsson and Ari Juels in a document published in 1999. Proof of work [combined with the other Blockchain building blocks] is maybe the biggest idea behind the Nakamoto’s Bitcoin white paper – published back in 2008 – because it allows trustless and distributed consensus.” https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/
what we call a block; Miners verify that transactions within each block are legitimate; To do so, miners should solve a mathematical puzzle known as proof- of-work problem; A reward is given to the first miner who solves each blocks problem; Verified transactions are stored in the public blockchain’ https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/
in fact, must be moderately hard on the requester side but easy to check for the network. “All the network miners compete to be the first to find a solution for the mathematical problem that concerns the candidate block, a problem that cannot be solved in other ways than through brute force so that essentially requires a huge number of attempts.’ BRUTE FORCE COMPUTING IS THE ‘WORK’ AND IT NECESSARY TO SOLVE THE GIVEN CRYPTO PROBLEM https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/ BLOCKCHAINLAWCLASS.COM
idea was suggested on the bitcointalk forum back in 2011, but the first digital currency to use this method was Peercoin in 2012, together with ShadowCash, Nxt, BlackCoin, NuShares/NuBits, Qora and Nav Coin. Unlike the proof-of-Work, where the algorithm rewards miners who solve mathematical problems with the goal of validating transactions and creating new blocks, with the proof of stake, the creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake.”
is no mining award but rather just transaction fees … Sometimes PoS system participants are thus called forgers Instead, the underlying PoS algorithm must be as bulletproof as possible because, without especially penalties, a proof of stake- based network could be cheaper to attack. To solve this issue, Buterin created the Casper protocol, designing an algorithm that can use the set some circumstances under which a bad validator might lose their deposit.
solve this issue, Vitalik Buterin created the Casper protocol, designing an algorithm that can use the set some circumstances under which a bad validator might lose their deposit. He explained: “Economic finality is accomplished in Casper by requiring validators to submit deposits to participate, and taking away their deposits if the protocol determines that they acted in some way that violates some set of rules (‘slashing conditions’).” Notwithstanding significant issues remain with PoS
I N O I S T E C H + S TA N F O R D C O D E X B LO G | C O M P U TAT I O N A L L E GA L S T U D I E S . C O M PAG E | DA N I E L M A R T I N K AT Z . C O M C O R P | L E X P R E D I C T. C O M NELSON ROSARIO B LO G | L AWO F C RY P TO C U R R E N C Y. C O M PAG E | N E L S O N M RO S A R I O . C O M F I R M | S M O L I N S K I RO S A R I O L AW P. C . BLOCKCHAINLAWCLASS.COM L A B | T H E L AW L A B . C O M E D U | I L L I N O I S T E C H - C H I C AG O K E N T L AW
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![https://www.coindesk.com/a-multi-million-dollar-bet- ethereums-proof-of-stake-isnt-coming-soon “I DON’T KNOW IF [ETHEREUM] WILL OR WILL](https://files.speakerdeck.com/presentations/4503848b83e2483f8d052a5fa6181569/slide_51.jpg){kind=link}
