Author: misamaliraza94
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Making the chain unbreakable
The innovation of blockchain technology is that by design, blockchains are resistant to retroactive modification and can store data securely without a centralised authority. The process starts with the cryptographic hash function. Each block has a hash function for its own data and a hash function for the last block’s data. By encoding the previous…
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Unique characteristics of a blockchain
Each block in a blockchain (barring the genesis block or first block – more on this later) contains three things. Data to be recorded that is represented by what’s called a cryptographic hash. A coded representation (or cryptographic hash) of the previous block’s data. A timestamp of when the block was added to the chain. Let’s break…
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Problem of trust and agency
In the very first article of this section on cryptocurrency basics we discovered that money was first used to facilitate trade. Facilitating the exchange of goods between two parties that didn’t know or trust each other. As civilisation and commerce have expanded it has been accepted that the only solution to this trust issue at…
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What is a Blockchain
A blockchain is a new way to store data. Rather than centralising information, and the control over it, in one place (a database), blockchains store it across a network where no one point has the authority to change records, This is called decentralisation.. Blockchain’s record data – in blocks – and securely store this data by…
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What you`ll learn:
What you’ll learn: What is a blockchain? Why trust is a fundamental issue in human relations The characteristics of a blockchain How a blockchain works: consensus &
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A stable future
Stablecoins are arguably the fastest-growing type of cryptocurrency today. In 2020 alone, the supply of stablecoins has jumped from $5 billion to $23 billion. Without this much needed degree of price stability, cryptocurrencies would be hard-pressed to offer more complex financial instruments, such as loans, derivative contracts, or insurance – and thus to become part…
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CBDCs: Central Bank Digital Currencies
As cryptocurrencies prove themselves a viable and efficient alternative to current payment systems, winning over ever more sectors of the economy, it’s only natural that arguably the most powerful player wouldn’t want to be left out: government. That’s where central bank digital currencies come in. CBDCs are not cryptocurrencies, nor are they Stablecoins – but…
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Algorithmic-based seigniorage Stablecoins
This type of stablecoin tries to mirror the mechanism behind the traditional central bank model, but with smart contracts instead of humans in charge. These smart contracts aim to adjust the circulating supply based on demand for the currency, Price levels are kept by issuing more tokens when demand is high (via interest-bearing shares), and…
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Crypto collateral-based Stablecoins
The growth and consolidation of crypto markets has enabled another class of collateralised stablecoins, based purely on crypto assets. This approach tries to reduce the reliance on companies and human behaviour, instead using smart contracts to manage stability in the system, This allows for purely on-chain stablecoins based on the value of the underlying cryptocurrency…
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How do Stablecoins work?
Under the hood, stablecoins are entries on global shared digital ledgers that can be transacted on decentralised, peer-to-peer global networks – just like any other cryptocurrency. Most Stablecoins don’t run their own networks. Instead, they run on top of established blockchains, such as Ethereum or Binance Chain. This enables Stablecoins to be launched without the…