Milestone: The Bitcoin Network Reaches One Exahash

By Albert Szmigielski Sometime around January 24th 2016 the Bitcoin Network reached one Exahash per second for the first time ever. That is 1 quintillion, a 1 followed by 18 zeros or 1018 hashes per second. That is just an insane amount of computing power. Image: Bitcoin Network reaches ONE exahash. Image courtesy of blockchain.info Over the last two years the Bitcoin Network hashrate increased roughly 50-fold. Image: Bitcoin Hashrate over the past two years. Image courtesy of blockchain.info Why is this a big deal? Bitcoin currently has the most secure network in the world. To duplicate the network it would take a lot of resources. At a low price of $150 per Terahash, it would cost approximately $150 million

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Case Study: A Rural Farmer in a Less Developed Country

Background and Assumptions The premise of this paper is that I am a farmer living in a rural region of a LDC; Mexico in my case. I have an entrepreneurial streak. My farm is a modestly successful enterprise, and in order to increase my profits, I have plans to expand and purchase 10 hectares of land next to my present farm. Fortunately, I live in a region with cell phone and Internet access, and use a smartphone to help manage my business affairs. I have also had the good fortune to be educated in a MDC institution of higher learning and am fully aware of the potential digital currencies and blockchain technologies can bring to my situation. My parents made

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Bitcoin and blockchains are here to stay.

by Albert Szmigielski This post will argue why Bitcoin, blockchains, and blockchain-based applications are here to stay and thrive. Bitcoin The Bitcoin network and ecosystem is enormous. The computational power of the Bitcoin network is mind boggling (around 600 Petahashes per second as of Dec 2015). The amount of investment in the Bitcoin ecosystem is already in the Billions. Currently Bitcoin’s market cap is only around five billion US dollars, but this is a lot for a peer-to-peer, open source project. Bitcoin also solves a problem that has eluded people for quite some time, how to send money cheaply, efficiently, and quickly? The services that exist now do not have any of these traits. Just ask anyone who routinely sends

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Bloom Filters in Bitcoin SPV (Lightweight) Clients – Part I

Bitcoin lightweight clients are wallets that do not download and store the whole blockchain locally. Currently (Oct 2015), the Bitcoin blockchain is about 45GB and growing. Downloading the whole blockchain onto a smart phone makes no sense. Satoshi envisioned lightweight clients in the original whitepaper [1]. The whitepaper introduced Simple Payment Verification – a way to verify payments without having to download the complete blockchain. A thin client (another name for a lightweight client) only downloads the block headers by connecting to a full node. Then it requests transactions matching its own addresses. To be clear a lightweight client sends its addresses to a full node requesting all the transaction that mach those addresses. The full node responds with those

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Bitcoin Basics – Part One – Mining Basics

by Albert Szmigielski Mining serves different purposes in Bitcoin. Miners verify transactions, by making sure they are valid. Then they include these transaction in a newly created block. This is how the blockchain gets extended, miners add new blocks on top of it. Then there is the securing the blockchain function. The more processing power miners have the more difficult it is for someone to mount an attack against the Bitcoin network. Finding a new block. The terminology around this varies, some people say finding a new block, others refer to it as solving a new block. All the miners compete against each other in finding new blocks. They are motivated by the rewards they get when they do find one

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Insurance products and the Blockchain

Describe a plausible scenario of the state of the cryptocurrency ecosystem that would allow traditional insurance products to be built/delivered in a decentralized manner. For the first time in history, distributed, decentralized, and autonomous entities are capable of existing and functioning in cyberspace. Blockchain is the underlying technology that makes it possible. In this brief paper we will outline how an insurance operation can utilize blockchains to its advantage. We will also touch on some societal benefits of blockchains in the insurance industry. Furthermore, we will outline a case where an insurance company as a DAC could exist with technology that is currently available (but perhaps is not fully deployed). Blockchains are essentially databases. Insurance companies can utilize them in

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