In the movie, “The Graduate”, the personage slightly mundane Youngest child (interpreted by Dustin Hoffman) tells in the cocktail that there is a word that he must know and this word is “plastic”. We are not sure in view of the progress of the plastic in the last 40 years if this had been the best of the advices. Nevertheless, in this day and epoch, it is more probable that anybody approaches you in a holiday and whispers, on the clink of the glasses of martini, the words “blockchain” or you “cryptocoin”. It is not so sexy as the plastic ones, but definitely it is more complex.
At first … it was the Bitcoin … and it was bad. Very well, at least to the Central Bankers Jamie Dimon did not like … and … hmmm … so it must be good not also …
The first distributed blockchain was conceptualized by an anonymous person or group known as Satoshi Nakamoto, in 2008, and he was implemented on the following year like a central component of the digital currency, Bitcoin, where it serves like public book for all the deals. The invention of the blockchain for bitcoin turned it into the digital currency first in solving the problem of the double expense without the use of an authority of confidence or a central servant. The design of Bitcoin has been the inspiration for other applications and cryptographic coins.
Libros mayores distribuidos
In our working days in Latin America (and Turkey) was quite known that most of the private companies, and more than a few public companies with records dominated by families, had multiple books games. There would be one for the owner (that is to say, the CEO), other to show to the shareholders of the family, other to show to the tax consultant and other for the regulators and the exchange if the company was quoting publicly. They all would turn out to be dramatically different in the numbers that they showed.
The Blockchains with its distributed ledgers is everything opposite of this. Although they have multiple copies, in fact there are copies copies and they all must be equal. It is the fact that several persons have the same copies that are supposed we have placed our our trust in its uncorruptibility. In fact, the codification is the modern equivalent of the indelible ink. Once a deal is in the ledger, it cannot be eliminated and one answers in all the copies.
The least popular explanation of a blockchain is that it is a question of a list of records in continuous growth, called blocks, which are linked and assured by means of cryptography. Every block is contained typically by a leader of hash as a linkage to a previous block, a mark of time and information of deal. For design, the blockchains are intrinsically resistant to the modification of the information.
Therefore, a chain of blocks can serve like “an open and distributed ledger that can register deals between two parts of an efficient, verifiable and permanent way”. To be used like a distributed ledger, a chain of blocks generally is administered collectively by a network peer to peer adhering to a protocol to validate new blocks. Once registered, the information in any block since they cannot falter retroactively without the alteration of all the subsequent blocks, what needs a collusion of most of the network.
Its enthusiasts make sure us that the chains of blocks are sure for design and are an example of a system of computing distributed with “high tolerance to Byzantine flaws”. Therefore, a consensus decentralized with the blockchains has been achieved.
Then the blockchains are now good for more than just registering Criptomonedas transactions. management activities, such as identity management, transaction processing, source documentation, or food traceability. It makes us wonder even about the traces of audit in the conflict minerals.
It seems appropriate that having founded a research firm based in the Austrian School of Economics, and we seldom talk about it, this blockchain will give us the opportunity to cite the founder of the school, Carl Menger, on the subject of “money”. This concept is followed by the gold fanatics to condemn the fiduciary currencies, which according to them are being degraded. The debate that is now being made is whether the Criptomonedas have money or not.
To measure this, we must see the three key identifiers:
Means of exchange: that BitCoin definitely has in a growing number of transactions.
Store value: More a matter of perception than anything else.
To have money one must meet the three criteria. Even hard core critics would agree that the BitCoin, for example, has the first requirement mentioned. We could argue that it has the second to have become the fiduciary currency for the bleak lower worlds where people who move large amounts of money (from drugs/firearms) have to rely on their intrinsic value (even if only As long as they have the reserve of funds in the Criptomoneda).
Then there’s the account unit. This is just a heartbeat away. So far, the Bitcoins are valued for what they are worth in other currencies, ie “so many dollars.” But when existing currencies are valued backwards, for example, how many ringgit can you get for a bitcoin, or automobiles or properties valued in Bitcoin, the chrome coins offer three equal fruits in the slot machine and are out of the races . (so to speak).
We woke up with the news this week that the Chicago Mercantile Exchange will soon begin to speculate with BitCoin and this provoked several reflections. The first, here comes legitimacy. Secondly, the Fed must be connotations. The third reflection: Is it just an attempt by the big banks to get part of the action in the manipulation of the BitCoin price (oh, no, not you Jamie Dimon, perish the thought)?
When Jamie Dimon rides to attack BitCoin one knows that the “Powers That be” (as they are often called) are getting nervous. Fortunately Jamie is no longer considered to be the 800-pound gorilla of the financial space, but rather as a Rottweiler poodle of central bankers (to mix some metaphors) and now has become the subject of laughter every time it is done Mention of “money” cryptography.
one begins to suspect that the Chinese public (and the wider universe of BitCoin users/holders) may actually be in something.
On a broader front, the war against the public’s right to carry out transactions is being attacked with governments that withdraw large denominations and Turkey banning PayPal. The motto for the masses should be “BitCoin will free you.” However, with the CME going into action, one wonders whether the institutionalization of BitCoins will not enter into turbocharged mode before the cipher coins escape into the hands of the Government, particularly in the land of the free.
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They are and why the government and central banks are afraid of both the Criptomonedas and the Bitcoin or Ethereum.
It has always been a libertarian ideal to decentralise the powers of government, nothing more than in recent years the immense power of the Federal reserve. The institution has grown enormously in size and scope since the financial crisis, a rise to prominence that has focused primarily on two of its key features: its power over the supply of American money and its lack of responsibility.
Ron Paul has been somewhat successful in addressing this latest problem. His thoughtful and persuasive publication of 2009 End The Fed exposed the operation and problems with the entire Federal reserve System, and his Audit the Fed campaign brought the issue to the government halls.
The former congressman’s work has been a big step in the right direction, but most of it has not addressed the other problem with the Federal reserve: its control over the currency and the supply of money from this nation. That’s where the criptomonedas and blockchain technology come in.
Blockchain was born of an ideal to end the manipulation of data inherent to all systems that depended on a centralized authority. The principle behind blockchain is that it is an open book, which records transactions permanently and without the possibility of someone with a malicious motive altering the ledger. Data manipulation may not seem like a serious problem for those of us who live in the countries of Europe or the United States, but developing nations lack confidence in the government officials needed to operate Successful of a free society.
In the best of cases, blockchain can solve the problem of allocating property rights to people in poor societies, but technology has now found a home in the field of currencies. Bitcoin, the first Criptomoneda, was created in 2009, with the power to revolutionize the idea of money. Almost a decade later, Bitcoin has spawned many copycats, some successful and some not, and has government agencies in a riddle about what to do with the Criptomonedas.
It can be said that Bitcoin and Ethereum are the two most successful criptomonedas that exist today, a success that has shown that Blockchain has the potential to function and the public has an interest in it. A virtual currency and a decentralized ledger, both inherent in Ethereum and Bitcoin, undermine the power of the central banking system. Neither strong currencies, nor confidence in government institutions (two key features of the Federal Reserve) are necessary for monetary transactions when there are criptomonedas. They interfere directly with the authority that central banks have accumulated over the past decade, and therefore governments around the world do not like them.
In February 2018, China banned all Criptomonedas-affiliated sites. Last month, the European Union voted to regulate the Criptomonedas more strictly, and in the United States the Treasury Department, the Securities and Exchange Commission and the Federal Trade Commission have been struggling to regulate these virtual currencies. Under the pretext of protecting consumers from Criptomonedas’s misleading schemes, governments around the world are trying to regulate a technology that they certainly know very little about.
Although some initial coin offerings (ICO), similar to the initial public offerings, but for currencies, have been operating as scams, the government’s hard hand is not the solution for bad actors. Just as the dotcom bubble eliminated the fraudulent and unnecessary use of websites and paved the way for the enormous potential of the Internet to come true, ICO’s fashion will pass and what will be criptomonedas with the potential to revolutionize the way it Think about money.
What the government really fears, and why it is in such a hurry to regulate it, is that the success of the Criptomonedas as Bitcoin and Ethereum is a direct threat to government institutions like the Federal reserve. Government officials do not like anything that their authority is undermined, and a loss of control of the money supply would make this authority fall on its knees.
The beauty of the Criptomonedas lies in its distributed ledger technology. Each transaction comes with a time stamp that is almost impossible to manipulate, as the underlying technology has been secured.
Bitcoin relies on a trabajosistema test, which requires miners to devote a considerable amount of time and energy to generating a successful block. Once a block is generated, most miners must agree on the block. Currently, 51 percent of miners have to agree, a point that criptomoneda dissidents have pointed out as a possible way of attacking the ledger. Theoretically, if an actor wanted to stop the transactions or change the accounting book for nefarious purposes, he could do so by acquiring 51 percent of the computing power. However, such a scenario would be almost impossible to execute, given the enormous amount of computing power it would take an actor to acquire such a large participation and the technical difficulty of such a task, and given that there is an implicit honor among the miners that would prevent the Majority is part of that scheme. Ethereum works with the same technology, its test system stands out due to the great use of electricity that comes with the work test. More ecological and cheaper, the test of participation provides the same security as the test of work, but could be the bridge between the Criptomonedas and the broad public use that the space currently does not have.
The potential of the Criptomonedas is massive, not only to reduce the authority of government institutions, but also to restore the power of the money supply to the public. The Criptomonedas are an innovative way to decentralize the control of public transactions and records, and the technology is built for people’s safety and privacy.
During a debate with Reid Hoffman at Stanford University several months ago, Peter Thiel described the Criptomoneda as “libertarian,” noting that its autonomy and decentralization is the reason why the “Chinese Communist Party hates cryptography.” The public would do well to remember that, the world continues to take vigorous action against the Criptomonedas in the name of social welfare.
Blockchain: A technological threat to our freedoms?
The original objective of Bitcoin (2009) was explicitly liberal in Hayek’s tradition: to exempt the instruments of payment from the intervention and supervision of banks and governments (and therefore taxes), and to show that a currency can be viable without being Administered by the state. To do this, the Bitcoin principle is to allow direct payments among individuals instead of trusting our transactions with banks, and taking the world to watch over every transaction, as among our ancestors they were all taken as a witness of the tribe. Mutual services, before the number and diversity of transactions press for the Registration of specialists (scribes, ancestors of banks and notaries). Everyone could check if mutual services were more or less outdated and identify independent and exploited users.
Ironically, the latest computer technologies can incorporate this primitive system worldwide, allowing everyone to create new transactions and to check if they are valid, and retain all valid transactions in a public record. To this end, Bitcoin combines several technologies: networks for the diffusion of the technology of transactions called “consensus” for the construction of the register in multiple copies, files and and a cryptographic signature to ensure a certain level of anonymity.
Each user can have an infinite number of addresses he creates using his personal wallet and can selectively publish. Each one is associated with a “private” key call that only the user can know, create and keep with his wallet and that does not appear anywhere else in the system. The address or “public key” is the analogue of the address of the boxes where the correspondents can send you emails; The “Private key” is the analogue of the key that opens this box, and keeps it carefully. Only public addresses appear in transactions.
The public key
In its computational form, these two keys form a cryptographic pair in which each one encrypts the information and deciphers the encrypted information using the other. A key pair may be the basis of a cryptographic signature system by which a user certifies that he is the holder of an account designated by his public key and is therefore authorized to issue transactions related to this account.
Because transactions are not encrypted in the registry, anyone can track the details of all transactions between accounts and verify that the validity conditions are fulfilled in each transaction, including the fact that all payments in an account are Authorized by the holder of this account, and which have been received by the holder of the account to which they were directed, without having to know the identity of these holders, which does not appear in any part of the registry. It is this possibility that creates confidence in the system and eliminates the use of trusted third parties.
The same technologies can be used for other information in addition to payments, to maintain a public and unalterable history, in a large number of copies built at least partially independently. These systems are called the “Distributed Ledger” (DLS) are distinguished by the nature of the information recorded and, therefore, by the conditions of validity of this information. Is it possible, when combined, to build a system where all the actions of each human being are stored permanently and publicly, even sanctioned automatically?
For example, does the combination of facial recognition and digital payments allow the construction of a system that automatically sanctions all those who do not respect the pedestrian steps?
A controlled and traceable record
This is already possible with the traditional systems, provided that the banks directly debite the accounts of the scammers, which would require a court order of the Government in the form of decree. But it would be impossible with a Bitcoin-type payment system, where by construction it is impossible to charge an account without the holder’s signature (cryptography).
To build a “controlled and traceable centrally” record, there is no need for blockchain technologies. A chain of blocks “centrally controlled and traceable” would be in fact only a standard file, overwhelmed needlessly by devices destined precisely not to be controlled centrally and to protect the anonymity of its users, and other devices Destined to disable the first, which would obviously be absurd. It is better to use another more conventional file format.
In a DLS, anonymity is the norm, but it is possible to break it at the expense of considerable police work. As the same transaction can affect the entry and exit of multiple accounts, a detailed analysis of the form of transactions can often establish that certain account numbers belong to the same person or organization and therefore step by step , group account numbers, has the same headline. If an additional investigation allows you to associate a headline with one of the accounts in a group, then it is the holder of all the group accounts. When you repeat the operation, you know all the accounts of a user and the complete history of their transactions. If a delinquent pays with bitcoins, it would be infinitely more dangerous than using cash.
It is possible to protect against this “anonymisation” by introducing a device to mix transactions of different emitters (a “glass”) or Dash, a cryptographic layer that encrypts transactions as in Nero, a communication protocol that It hides its way on the net as in Tor. The real practical problem becomes the opposite: how can the system be exploited for criminal purposes? How to fight crime?
Serving all motivations
In short, of course, all technologies can be put at the service of all motivations. But those who want to set up systems that attack citizens ‘ rights already have all the necessary technologies even before the DLS. In a system based on standard centralized files, it is certainly possible to configure protections, but the organization that manages these files remains the owner and the users are forced to trust him, even for confidential files that They contain documents or personal information. On the contrary, a DLS incorporates by construction the possibility of controlling the registration of this information and the use that is made of it. What DLS Technologies bring back by their very nature are ways of protecting citizens ‘ rights.
And this is the consequence of a deeper revolution: Until then, only large companies and government organizations could build large-scale computer systems, including systems for “technological totalitarianism” for which Existing technologies are largely sufficient. Ordinary citizens had to live with them, even if they were detrimental to their rights.
From now on, what is called civil society has shown that it can build systems that compete in size and complexity with centralized systems, in a cooperative way involving tens of thousands of independent actors around the world through Free software and computer networks. Many high-level academics are passionate about the technological challenges posed by these systems, particularly in terms of security and protection of individual rights. As a result, a large number of payment systems have emerged, as well as other collective applications, which offer users a wide range of options depending on the use and level of protection they seek.
Many are likely to conform to modest levels to protect their anonymity imperfectly, or agree to continue to use more or less unilaterally to designate third parties as trusted and democratically among users as in the systems of Bet Test. On the other hand, others will resort to systems that guarantee their anonymity even in the face of banking regulations. But it is true that the levels of protection of these systems will be disproportionate to conventional pre-DLS systems.