Bitcoin – Blockchain Basics – The Argon Group – Medium

Mining, private keys, brainy contracts etc… The world of blockchain and cryptocurrencies is pretty complicated for newcomers looking to go down the rabbit crevice. Below, wij give a high-level overview of the most basic terms that will help you better understand what the hype is all about.

Each blockchain consists of a chain of gegevens records that are managed and verified by all computers ter a global network. A copy of all previously created gegevens records will be stored on each connected laptop. Thus, a falsification or even deletion of the gegevens is no longer den facto possible. Te this way, bitcoins, for example, can be saved and transferred quickly and securely.

A blockchain consists of a large number of networked computers/clients. Each of them is called a knot. Each knot stores the entire blockchain, checks each transaction and forwards it to the network if everything is keurig. The more knots that belong to a blockchain, the safer and quicker it works.

Bitcoin is a virtual, cryptographically secured currency. The currency reached the public ter 2008 via a mailing list for cryptography. Under the pseudonym Satoshi Nakomoto, a whitepaper wasgoed published describing a payment system based on the blockchain technology.

The private key is generated during the very first installation of a digital wallet and is something like the master key. It provides access to the cryptographic currencies stored ter the wallet and should always be kept securely (i.e. on paper, onan encrypted USB stick, or preferably both). Those who lose the private key to the wallet lose their cryptocurrencies, spil there is no way to restore a forgotten private key.

Bitcoins and other cryptocurrencies are not generated by central banks, but by mining. Te this process, miners attempt to generate individual dataset blocks with hardware and complicated calculations.Te comeback, miners receive cryptocurrency spil a prize. Bitcoin, for example, creates a newblock every ten minutes, which automatically pays a immobile number of bitcoins to its creator. The resulting block then contains all verified transactions that have bot carried out with Bitcoins since the previous block wasgoed created.

Ethereum itself is not a cryptocurrency, but a podium for the creation of decentralized applications and wise contracts (see below). To make this possible, however, Ethereum has its own cryptocurrency called Ether.

Clever contracts have nothing to do with contracts ter the classical sense. Rather, it is used to designate applications or digital processes which, after verification inbetween two (or more) parties, are executed automatically via the blockchain and without middlemen. For example, such an application can be created to automatically send a digital key to an Airbnb vapid upon receipt of the payment without requiring a central institution to confirm the payment.

Dapps are decentralized applications made possible by the network principle of blockchain. Each dapp consists of self-executing code, so-called Brainy Contracts, that define the functionality of the application.

ICO (based on IPO) stands for Initial Coin Suggesting and describes a fresh form of corporate financing. Investors can use an ICO to acquire shares, profit-sharing rights or rights for future products/services te a company using a virtual cryptocurrency. Technically, the process is based on blockchain technology.

Tokens are obtained from an ICO ter exchange for a certain amount of a cryptocurrency. Each token is comparable to a digital coupon, which entitles the holder to participate ter a dapp, for example. If the decentralized application gains value and request increases ter the future, the value of the token increases (similar to a share).

The Argon Group is an investment canap with a concentrate on digital finance — the emerging cryptocurrency and token-based capital markets. The Argon Group provides a broad array of world-class strategic investment banking and financial advisory services to our clients te this fresh emerging and titillating space of ICOs.


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