Ethereum
Vitalik Buterin has given to the world one of the platforms with one of the biggest potentials on the planet. Ethereum has a very interesting future ahead of it.
Ethereum, whose currency is called Eth, is not only on par with btc a currency for exchanging value, but it is a decentralized platform for creating complex applications. In fact, the goal of ethereum is to decentralize the Internet from the network giants of today.
Ethereum is a decentralized platform for the creation and peer-to-peer publication of smart contracts, or in short, contracts that are self-executing and self-fulfilling. The applications of these contracts are and will be of an enormous number and will cover Gaming and gambling, various contracts, certifications, voting, real estate records and much more.
Even the famous ICOs are actually very simple smart contracts tied to the written code base. This code makes the contract immutable once deployed on the network and after blockchain approval.
Complicated smart contracts have a very high inherent level of difficulty and a huge need for security. You have to create perfect programming and be sure that the contract does only what the programmer has decided. Always remember that Code is Law.
The principle behind Ethereum is that since it is a decentralized platform for program development, anyone can create a program that cannot be controlled by any person or group and that program will run on Eth's network. With a little study of Solidity, all intermediaries can be eliminated and developers can work directly on the Blockchain.
Ethereum was launched in July 2015 and has since become the second largest cryptocurrency by capitalization. Its potential is extremely interesting and deserves to be followed .
A lot of applications are being developed on the ethereum network, from DEFI to NFT tokens to decentralized exchanges that are used to exchange tokens of different types, on the same network, eliminating the trust problem of a centralized exchange.
Ethereum's ease of programming has meant that thousands of other coins, which we can call tokens or altcoins depending on the situation, have sprung up on its network.
Tokens can be defined as the tokens for slot machine, and there are different types of crypto tokens. If we take our cue from Finma, the Swiss regulator, we can define them into 3 categories.
- payment tokens not linked to other functions i.e. Bitcoin, Ethereum, Litecoin. These are real coins, born for value exchange.
- utility tokens that serve a single platform or digital service such as Ripple's XRP, or Binance's BNB, and can be exchanged outside their native platform.
- Investment tokens, which, on the other hand, represent asset values, such as shares in real assets, companies, revenues, or the right to dividends or interest payments. These tokens should be considered in relation to their economic function, in a similar way to shares or corporate bonds, or a derivative financial instrument.
The downside of blockchain
By now we understand, the blockchain is a public ledger. So it's a ledger that everybody can look at, if they know how.
So it's a list of who owns what. Even if pseudonymous as Bitcoin, with a KYC within the network, I can know that my neighbor has a significant amount of money or not.
With normal bank accounts this does not happen, we do not know how much our precendent neighbor owns unless he tells us himself or someone lets us know. Not to mention possible hacks of the bank's databases, which should not happen.
Let us start with a basic principle, it is not smart to tell to everybody about our possessions. Whether you are talking about cryptocurrencies or fiat currency accounts. My preference is to always be on a low profile, without flaunting one's possibilities even if they are limited. The personal safety factor should always be understood and considered. There are times and places to flaunt one's favorite Rolex.
The blockchain, unfortunately, as it was conceived and created, has a big privacy problem, which in the coming years will absolutely have to be addressed and solved.
What is a blockchain? Learn more here.
Double Spending
Today we are going to learn what double spending is.
Double spending is the manipulation of the blockchain of any cryptocurrency in order to spend the same amount of coin several times, sending this coins to different addresses.
Let's take an example on the bitcoin blockchain.
If we have only one bitcoin on our wallet, and we send it to Marco, this will be awaiting confirmation in the network mempool.
Immediately after closing the transaction to Marco and before waiting for the confirmations, we will send the same amount to Giorgio, and this transaction will also end up in the unconfirmed transaction pool.
When these transactions are checked by the miners, the second transaction will be rejected as invalid and impossible to carry out.
In case of simultaneous sending of several transactions, we will have to wait for the 6 confirmations to understand which of the two transactions will be rejected and which will not
From one wallet to another - The transaction of a Bitcoin
In this article we will see what happens from when we send a bitcoin to when it is received from another address.
There are 3 main parts within a transaction, and these are:
Signing
Broadcasting
Confirming
Let's start from the first one, the signing.
Now, by pressing the send button we are telling the wallet to send the selected bitcoin sum to the address indicated in the space provided.
The wallet then creates a transaction, which is actually a message containing the data of who sends, who receives and how much is sent.
Once this is done, a unique digital signatures is created by mathematically mixing my private key, that is the private key of the sender.
The private key as we know, is a long series of letters and numbers that acts as a password for your bitcoins.
Whoever knows the private key has control of these bitcoins, so you must protect it in every way.
The digital signatures is proof that I have this private key along with my public key.
Remember that each transaction creates a different digital signatures.
After signing the transaction, the system creates a file containing the digital signatures and the transaction message.
This concludes the first step on signing.
In the second step, the broadcasting, the wallet sends the file to the computers that mine the blockchain or have a copy of it.
These computers are known as NODES and each node that receives the file checks it to understand that it is legitimate and correct.
In particular, check that who is sending some coin needs have the funds in his wallet and then confirm the validity of the digital signatures.
Once confirmed as valid, this file is sent to other nodes which repeat the verification process.
When a node receives the file, it keeps it in an area called Mempool or memory pool.
This is a space dedicated to valid but not yet confirmed transactions.
Now let's move on to the status of our transaction, Block explorer is software or a tool on a website to check the status of transactions and navigate the blockchain.
We can check the holdings of all bitcoin addresses, check all transactions and have statistics and information on the network in real time.
If we check our transaction right now, we will see it marked as unconfirmed. this means that our transaction is not yet part of the blockchain.
It is defined as zero confirmation transaction.
In this state the transaction could still be canceled or postponed and we have no guarantees that it will be included in the blockchain.
If you sell products and services, never accept an unconfirmed transaction as proof of payment.
If you remember, when we talked about mining, we said that miners group transactions to create a block of the blockchain and of course miners will take the transactions that will be more profitable, there is a limit to the number of transactions.
So the miners compete with each other to create the blockchain block and this competition is based on mathematical calculations.
The greater the computational power the greater the chances of victory.
When a miner wins the competition, all transactions that are in that block are considered confirmed.
Miners write the history of bitcoin transactions and a block is created every 10 minutes.
When we go back to check our transaction, if it is written inside a block, it will be marked as with 1 confirmation.
Confirmations will grow as block creation increases.
The transaction will be fully confirmed with 6 confirmations and without any possibility of cancellation.
The transaction will now be received and it will unmodifiable.
51% Attack !
Today we understand the meaning of the term 51% attack.
Bitcoin miners in fact use their powerful computers to keep the bitcoin network alive by managing and processing all transactionslike checking that the users dont create any double spending trouble on the network.
This very important work, which guarantees the functioning and trust in bitcoin, is done by controlling the blockchain in its entirety.
To give an example, in the case of a transaction on the bitcoin blockchain from user A to B, the miners will check that the transaction is valid, that there are on the address of user A those bitcoins that he wants to move towards the address of user B.
If most miners certify the transaction as correct, then it will be confirmed and entered on the blockchain.
Now, if you had more than 50% of the computing power of the blockchain, it could theoretically be manipulated, carrying out double spending and other types of fraud such as preventing any transactions from specific addresses or eliminating other miners from the network.
The problem is real especially if the computational power of the blockchain is concentrated in the hands of a few connected and colluding hands. In this, the decentralization of mining should avoid this problem. If we think in the event that most of the computational power is in the hands of two or three large companies, the problem of dealing with a cartel is real.
Learn more about safety here.
5 golden rules to buy bitcoins between users!
the issue of the sale and purchase of bitcoin between individuals.
It may happen that you decide to sell or buy bitcoin from a private individual for various reasons, the important thing is to always be careful that on the other hand there isnt a scammer or an attacker on the seller.
Let's start from the point of view of those who want to buy.
The steps to take are:
1 checks the credibility of the seller:
There are groups and sites where individuals decide to sell their bitcoins.
On these sites there are always reviews and past experiences.
You have to check the credibility of these people and how they approach each other in the various chats.
Trust your instincts and Always start with small amount of money to buy.
Also try to use google by searching through the various pages. Maybe you will waste time or maybe you will save your money and life.
2 documents everything to avoid fraud:
Chat with this person, ask questions and have them explain precisely how the exchange will take place.
Don't leave anything out. Prefer emails or written chats, avoid phone calls or record them.
Remember that you need material to help you prove fraud.
3 wait for the first confirmation before paying
Remember that Bitcoin needs 6 confirmations to go from one address to another, and it generally takes 10 minutes for the transaction to be written in the first available block.
Obviously assuming that the transaction fee does not make him pass to the next one and so on ...
4 uses an escrow:
What is an escrow?
From wikipedia: A guarantee deposit is a legal agreement in which a real or virtual asset is deposited by one party in the account of a neutral third party, until the other party fulfills the contractual clauses. Upon fulfillment of the clauses, the agent will deliver the deposited asset to the other party.
A 3rd party will protect your money from possible fraud.
5 Where to trade:
You can choose to do the exchange in a public place, in a bar or without meeting the person on the other side.
It's all up to you, but don't put yourself in danger.
Avoid hidden places and stay around people.
Advice For those who want to sell:
The advice above can also be applied to the seller's part.
Be careful with buyers. It could be an attempted assault and it wouldn't be the first time a salesperson has been beaten up and robbed.
Be careful
Is Bitcoin Anonymous??
Today we are going to talk about bitcoin and his anonymity, the thing that everyone talks about but no one knows about.
Let's start from a fundamental point, bitcoin is completely traceable and transparent thanks to the blockchain network but bitcoin is not completely anonymous .
Bitcoin is pseudonymous.
In fact, the address of your wallet is your identity on the blockchain but if this address is connected in some way to your document, your identity is revealed.
Think for example of when you did a KYC on some exchange, and from this exchange you sent funds to your long-term wallet.
Here at this moment your pseudonymy has been lost and anyone will know how many bitcoins or other coins you have on that address.
If you want to remain totally anonymous you will have to take the necessary measures
How to buy a coin like Ethereum
how to buy a coin, in this case we will take Ethereum as an example.
First of all you must have a wallet, your choice of whether a software wallet or a hardware wallet.
If you don't know the difference, check our article dedicated to what the various types of wallets are.
After that, find your ethereum address.
After you log into your favorite exchange, check that you have enough funds and make your ethereum purchase.
Go to your wallet page on the exchange, look for your newly purchased eths and withdraw your coins. At this time, you will need the address of your wallet that we searched for earlier.
Enter the address, confirm the transaction and you will see your eth pass from the exchange to your wallet.
All in a very simple way.
Various types of Bitcoin wallets
Today we are going into details about the different types of wallets for Bitcoin.
As I have already told you, having a wallet where you can put your bitcoins is essential, it is one of the absolutely necessary steps to invest.
However, there are different types of wallets, all created accordingly to the needs of the owners.
The first diversification is between custodial and non-custodial wallet.
A custodial wallet is for example a wallet on an exchange, where you can use the wallet but you don't have control over it since you don't have the private keys.
Non-custodial wallets, on the other hand, are wallets that you can access via private keys and are in your full control.
This category is divided into hardware wallets and software wallets.
Let's start with the first type, namely the hardware wallets.
A hardware wallet is a physical wallet, practically a USB key that we can hold in our hands.
The most famous models are the Nano S or X and the Trezor.
These wallets are perfect for securing large amounts of coins and are fairly easy to use.
Another point in their favor is the vast support, in fact they allow you to have different types of coins saved inside them.
The safety of use is one of the fundamental points of this type of wallet, safety that you pay dearly given the purchase cost, based on the wallet model chosen, which is particularly high.
These wallets then need to use special software to work, such as Ledger Live for the Nano.
Let's move on to software wallets, which are a type of wallet that we can have on a device such as a phone or laptop.
One of the most popular wallets is electrum wallet, which is free and open source. It is a wallet dedicated only to bitcoins and we must say that it does not have a really nice user interface. But it works, is appreciated by users and is safe thanks to the fact that it is open source.
It also works with some hardware wallets.
Now let's talk about the wallet of hardcore Bitcoin professionist, let's talk about bitcoin core wallet.
Now let's understand, this wallet is specific only for people who know what they are doing since it downloads the entire bitcoin blockchain on their pc, and we are talking about gigabytes of memory.
This wallet is the ultimate in privacy and is obviously only for bitcoin and only for pc.
You will have complete autonomy and full possession of the tools of the bitcoin blockchain, so it is not for those who are just starting out. Even the interface doesn't help.
Now that you know what the various types of wallets for your bitcoins are, you just have to decide what to use in complete safety.
Learn more about safety here.
How to buy a cryptocurrency - Rookies Step
Today we are going to see how to buy a cryptocurrency in 3 simple steps.
phase 1 - Research:
Before doing anything you have to find out what you want to buy.
Which seems trivial, but it's not so easy to find because the crypto market offers a disproportionate number of coins.
First of all we need to understand if we want to buy a coins with a glorious past or a coins that have just come out on the market.
We need to make this research, which can also be based on suggestions given by the media or friends.
Be careful in this case not to be fooled by possible scams.
Analyze the situation of the coin on a graphical level and everything that revolves around it.
phase 2 - SAFETY
Once you have chosen the coin you want to buy, the first thing to do is find a secure wallet and create it.
Learn more about safety here.
step 3 - buy the coin
Open the exchange and press the BUY button.
Now some recommendations
Always do extensive research on the coin you are analyzing and if someone has suggested it to you, try to understand if it is a disinterested suggestion or not.
Obviously NEVER follow the hype.
The hype invariably leads to entering at inflated prices and then losing a lot of money. Enjoy the hype by standing at the window.
Remember that wallets are programs to hold your coins so pay attention to the different types of wallets and different types of addresses.
If you get the wrong address you have lost your coins.