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  • Consensus Algorithms
    • Needs to be Byzantine fault tolerant
      • The systems is designed to reach consensus without necessarily having to talk to each other
    • Proof of Work
      • used by BitCoin and currently Etherium (etherium wants to change)
      • A node has to guess the Nonce to write the block
        • The reward is currently about 12 bit coins
        • This is referred to as mining
      • The more hardware on the network the more difficult it is to guess the number
        • This is wasteful of energy and resources as farms of hardware are used to guess the random numbers
        • costs roughly $400million world wide
    • Proof of Stake
      • Etherium will move towards using this
      • Rathering finding a nonce, it uses a system of betting
      • costs about $1million to setup a node plus 
      • The block that gets voted on the most is injected into the chain
        • any fees associated with this block are split amongst the validators that bet on it
      • Creates a situation where there are only a few validator nodes, because of the costs
        • Because of the smaller number of nodes, it makes it more susceptible to discovery and attack
  • Value and Volatility
    • What determines value?
    • In traditional systems currency created by a centralized authority
    • With the blockchain individuals can create currency
      • value determined by market
    • Last year's market cap for all blockchains is $146.2B
    • Banks in Canada are increasingly de-risking blockchain currencies, making it harder to transfer to your bank account.
    • Token value determinants by William Mougayar:
      • Role
      • Features
      • Purpose
    • These currencies are digital fiat currencies with nothing tangible backing them
      • Because of this they are only fuelled by speculation
      • this volatility is a barrier to real world use