Lecture 5 Flashcards
What are the 2 standout developers of bitcoin?
- venture capitalists eg ashton kutcher
- Blockchain 2.0
What is an example of Blockchain 2.0?
Mike Hearn proposed automated taxi service not owned by anyone and paid for in Bitcoin
Who created Ethereum?
Vitalik Buterin
What are some characteristics of Eth?
- designed so anyone can use
- complex method for determining new supply, capped at 18m
Governance nominally centralized but continues to be dominated by owner
What are the similarities of Eth and BTC?
like BTC, Ethereum has:
- blockchain with blocks of data: mined by some participants and distributed to others for validation
- blocks form chain by referring to hash of previous block
- Main network is a public, permission less network
How does Eth differ from BTC?
- runs on Eth virtual machine (EVM)
- compensation price list based on “gas” - (unit that measures computational complexity)
- Gas fee = units of gas used (base fee + priority fee
- No more mining, proof of stake relies on validators that stake at least 32ETH
What is “Gas”?
the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network
What are smart contacts?
contractual clauses (eg collateral) embedded in hardware and software we deal with so breach of contact is expensive.
What problems can smart contracts solve?
- guarantees specific performance
- economizing (reduce expenses) on contracting costs
- economizing on enforcement costs
- differing strategic behaviour
- removing need for trust
Do smart contracts require blockchains?
No, however blockchains open up much more complex possibilities
What are the consequences of Ethereum?
- no clear concept of time
- contracts may “run out of gas” when executing
- need to consult an oracle for external data, that can be hacked
What is the hard fork in Ethereum called and what block was it on?
Ethereum classic, block 1,920,000
What are the 2 “impossible” things that have occurred with Ethereum?
- history rewritten on blockchain
- smart contract preempted by human intervention
what does the Bank of International Settlements (BIS) say positively on distributed technology?
greater market transparency and more effective risk management across systems
What are BIS concerns with distributed ledger technology?
could automatically trigger margin calls in financial markets, potentially leading to a systematic event
What is an altcoin?
Cryptocurrencies launched after the success of BTC
What are the 4 main types of altcoins?
- Payment tokens = crypto = coins
- security/asset tokens (eg gold)
- Utility tokens
- NFT’s
What is Auracoin?
Attempted to be an alternative to Krona in Iceland
- airdropped to all Icelandic residents in 2014
- wasn’t widely used
What is Solarcoin?
Reward for using solar panels, low demand so value was low
What is Tether and what is it used for?
Helps investors move between fiat currency and crypto
Parking place for high frequency investors, 70% of bitcoin trading is via tether
What are the problems with Tether?
- company never produced an audit
- paid £41m settlement to US commodity futures trading commitee
How was Omni layer protocol marketed?
as a layer that runs on top of bitcoin to provide advanced transactional features to users.
How do altcoins differ?
- Operational design (eg mining, consensus etc)
- replication of real assets/currencies
- affinity tokens
What is a token?
Units recorded on any blockchain
What are the 4 broad categories of tokens?
- native blockchain tokens - incentives for minors to work
- Asset backed tokens - Title to real world asset held in trust by custodian
- Utility token - claim on service provided by issuer of token
- NFT
