Confidential Transactions — At present, all Bitcoin transactions are completely public, albeit pseudonymous. Confidential Transactions, as the name implies, conceal the amount being transferred to all except the sender, the recipient, and others they designate. The resulting transaction size is significantly larger, but includes a sizable “memo” field that can be used to store transaction or other metadata, and is still smaller than eg Zerocoin.(Note that this isn’t as confidential as Zerocash, which conceals both the amount and the participants involved in any transaction, through the mighty near-magic of zk-Snarks. Mind you, Zerocash would require an esoteric invocation ritual to initiate its network. No, really. But that’s a subject for a separate post.)
“The consortium or company running a private blockchain can easily, if desired, change the rules of a blockchain, revert transactions, modify balances, etc. In some cases, e.g. national land registries, this functionality is necessary; there is no way a system would be allowed to exist where Dread Pirate Roberts can have legal ownership rights over a plainly visible piece of land, and so an attempt to create a government-uncontrollable land registry would in practice quickly devolve into one that is not recognized by the government itself….
Nikolai Hampton pointed out in Computerworld that "There is also no need for a '51 percent' attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished." This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 2007–08, where politically powerful actors may make decisions that favor some groups at the expense of others, and "the bitcoin blockchain is protected by the massive group mining effort. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power—it's time consuming and expensive." He also said, "Within a private blockchain there is also no 'race'; there's no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases."
By the end of this post, you’ll be able to freely participate in conversations like the above. This is not a coding tutorial, as we’ll just be presenting important concepts at a high level. However, we may follow up with programming tutorials on these ideas. This article will be helpful to both programmers and non-programmers alike. Let’s get going!
• ‘Difficulty’: In the Bitcoin network, miners solve an asymmetric cryptographic puzzle to mine new blocks. Over time the puzzle becomes easier, resulting in it eventually taking less than 10 minutes for each new block generation. Hence, the community updates the puzzle every 14 days and makes it more difficult, thus requiring even more computing power to handle the POW algorithm. The ‘difficulty’ parameter controls the complexity of the cryptographic puzzle. This parameter is also used in the Ethereum blockchain as well. Developers should assign a low value (between 0-10,000) to this parameter for this project thus enabling quicker mining.
Aelf uses a consensus algorithm called DPoS (Delegated Proof of Stake) that takes the best of both cooperative and competitive consensus algorithms. DPoS uses votes from stakeholders to achieve consensus. The competitive part is larger stakeholders having an influence on their delegate of choice. The delegates that have the most votes will take their turn to produce a block cooperatively in a sequence. DPoS makes transactions permanent. A rollback isn’t possible so a confirmation can be fast. DPoS is also scalable because anyone can participate in the consensus. Additionally, DPoS is environmentally friendly because electricity isn’t wasted like in Proof of Work.
Por lo tanto, y gracias a estas sidechains, se podrían conectar a Bitcoin soluciones con objetivos concretos, complementándole y aprovechando sus ventajas pero con la suficiente independencia. Para ello se usan unas piezas llamadas ‘two-way peg’, que son las encargadas de sincronizar las transferncias (validan y inmovilizan las monedas) entre ambas cadenas: la sidechain cuenta con unas monedas ya minadas pero sin dueño a la espera que, tras el intercambio, queden bajo el control del usuario que llega a esta cadena.
The Bitcoin White Paper was published by Satoshi Nakamoto in 2008; the first Bitcoin block got mined in 2009. Since the Bitcoin protocol is open source, anyone could take the protocol, fork it (modify the code), and start their own version of P2P money. Many so-called altcoins emerged and tried to be a better, faster or more anonymous than Bitcoin. Soon the code was not only altered to create better cryptocurrencies, but some projects also tried to alter the idea of blockchain beyond the use case of P2P money.
Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other. Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions, add them to the block they are building, and then broadcast the completed block to other nodes.:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes. Alternative consensus methods include proof-of-stake. Growth of a decentralized blockchain is accompanied by the risk of centralization because the computer resources required to process larger amounts of data become more expensive.
Public blockchains: a public blockchain is a blockchain that anyone in the world can read, anyone in the world can send transactions to and expect to see them included if they are valid, and anyone in the world can participate in the consensus process - the process for determining what blocks get added to the chain and what the current state is. As a substitute for centralized or quasi-centralized trust, public blockchains are secured by cryptoeconomics - the combination of economic incentives and cryptographic verification using mechanisms such as proof of work or proof of stake, following a general principle that the degree to which someone can have an influence in the consensus process is proportional to the quantity of economic resources that they can bring to bear. These blockchains are generally considered to be "fully decentralized".
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At Iryo, we consider databases and blockchains that are not opened to the public to be insecure they, can easily be altered by the business running it, at their discretion and it goes against the ethos of the open and transparent cryptocurrency space. Designed to keep public out and introducing “trusted” middlemen, private chains forget that trusted third parties are security holes.
In private blockchains, only specific, pre-chosen entities have the ability to create new transactions on the chain (this is known as “write permissions”). Thus, a private blockchain is a closed network that offers constituents the benefits of the technology, but is not necessarily decentralized or distributed, even among its members. The extent to which each constituent can view (“read”) and create and validate transactions (“write”) is up to the developers of the chain.
Public blockchains are just that, public. Anyone that wants to read, write, or join a public blockchain can do so. Public chains are decentralized meaning no one body has control over the network, ensuring the data can’t be changed once validated on the blockchain. Simply meaning, anyone, anywhere, can use a public blockchain to input transactions and data as long as they are connected to the network.