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Next week: Attack of the 51% hash monster!

Episode 4: Hey, I’m Not Lazy...I Even Have Proof of Work!

What is Proof of Work?
PoW is a protocol, or accountability system, that deters service abuses like denial of service attacks and spam. Hashcash is an early version of this technology, and is used in email systems, blogs, and other digital networks to deter spam attacks. In blockchain systems, the technology is inverted. The Proof of Work hash protocol is used as an enabling device to allow decentralized participants to transparently append blocks of transactions to an existing chain of prior transactions. The Bitcoin blockchain network, the first functioning “chain of blocks” as it is called in Satoshi’s whitepaper, employs a hash-based Proof of Work concept.

What is a hash?
Hashing functions take an input and produce an output. They are digital code that represent transactions, or a set of transactions contained in an information “block”, which is recorded on a blockchain. A blockchain is simply a digital, open, immutable ledger of transactions.

Algorithms are used to make hashes from inputs, or transactions that would like to be attached to the open ledger, or blockchain. Imagine you have a dialogue box, and in it you can record all the details of the transaction that you would like to be recorded on the blockchain, literally anything that you can type on a computer. Once you finish inputting the transaction details into the dialogue box of the algorithm program, which in bitcoin’s case is SHA-256, the algorithm calculates a hash from the input. What’s magical about math is that the same input will give the same output every time. But a change in the input will result in a new randomized, yet consistent, hash as an output. The output is always a specific length, and consistently so. Isn’t math wonderful?

Why talk about hashes?
The SHA-256 algorithm serves as a security measure and optimization tool. The blocks in a blockchain are “hashed”, or encoded into a series of numbers and letters. The use of hashing means that anyone dealing with a blockchain must remember the hash and not the input itself. In addition, each block will contain the hash of the previous block header, so that it maintains its place in the sequence of transactions recorded on the blockchain.

Mining
Decoding and encoding the blockchain is called mining, an essential part of the decentralized system of accountability that makes blockchains so unique and valuable. Mining involves computers running hashing algorithms to process the most recent block, with the information needed in mining or decoding being found in the information block's header. The cryptocurrency network sets a target value for this hash – the target hash – and miners try to determine this value by testing out all possible values.

Here is where the economics comes in. The Bitcoin system rewards miners for their part in the distributed accountability network by providing cryptocurrency to the owner of the GPUs that successfully guess, or verify, the hash code. In other words, mining Bitcoin describes the process that a computer undertakes to confirm the pseudonymous transactions on the Bitcoin blockchain that is rewarded by the blockchain network’s cryptocurrency.

In short, this protocol is called Proof of Work. When a Bitcoin miner is able to successfully confirm a hash (essentially a guessing game process), the Bitcoin system rewards the miner with digital cryptocurrency, 12.5 Bitcoins to be exact. At least until the next time the reward mechanism is halved in May 2020.

And we'll see you...on the moon!

Resources:
On Trust & Blockchains
http://bit.ly/2Dr2C5z
Why Mine Empty Blocks?
http://bit.ly/2ThTsO3
What is Blockchain?
http://bit.ly/2zf23Zq

Find us at http://bit.ly/BlockRunners
Digi B (Chris Barnett) Twitter: @cbvids
Professor K (Nic Krapels) Twitter: @shanghaipreneur
Mr. Lo (Amal Sudama

Digi B starts Show 3 with the most basic question:

What the fork is a fork?
The short answer is that when an existing blockchain is forked it creates two new chains at the block height of the fork. At the point of the fork, all transactions on that blockchain would occur on two separate chains. But before that split, the newly forked chain shares the history of all previous transactions made on the parent chain.

Prof K approaches the question from a finance perspective. It’s free money! A fork can be well compared to a spin-off IPO of an unwanted subsidiary in the stock world. Some investors reinvest earnings from forked coins back into BTC, others accumulate a fat wallet of forked coins on the off-chance that maybe they will be as valuable as BTC one day.

Mr. Lo brings the perspective of a developer. The word “fork” has multiple meanings in software development depending on the context. Most recently the term is an integral part of the process of social software development, a practice made more efficient when Linus Torvald, creator of Linux, unleashed git to the world. Forking allows collaborators on git-based code repositories to organize a project in a decentralized manner. Each contributor has a copy of the original project and makes changes and improvements locally that they submit as pull-requests to the OP. It’s just a part of the workflow where you “fork” a copy of the code in order to experiment with it. For blockchain projects, a “fork” is an upgrade mechanism. If it is based on consensus the blockchain doesn’t change. If there are political or philosophical differences, the fork can lead to a new coin and a split in the developer community.

What kind of forks are there?
There are three basic types of forks: unintentional, soft fork, and hard fork. In the short history of blockchain, there are two fork events that every crypto enthusiast should know about. The first occurred on July 20, 2016 when developers on Ethereum, led by Vitalik Buterin and Consensys among others, rolled back the DAO hack and created a fork on the Ethereum blockchain. The coders that disagreed with this decision stayed on the Ethereum Classic chain. The second must-know fork occurred on August 1, 2017 when, again due to philosophical differences, a subset of BTC miners chose to create a fork of the BTC code in order to increase the block size of BTC blocks from 1 MB to 8 MB. This fork created BTC Cash. Both of these forks represent contentious hard forks. By contrast, the STEEM blockchain has conducted 20 hard forks with community consensus that, although they may have been a hassle to the community, provided robust upgrades and wholesale changes to the protocol.

In general, knowing about forks in the blockchain industry is important because, as we like to say on BLOCK RUNNERS, we want to delineate the good from the bad. Although many forks occur due to legitimate divergences in philosophy, some of these projects are outright cash grabs! If you want to determine the quality of your forked coins, we suggest checking the project’s activity on GitHub and the LinkedIn profiles of project leadership. If you find yourself questioning the future of the project after that little bit of research, sell those forking coins!

Shownote Resources:
https://vitalik.ca/general/2017/03/14/forks_and_markets.html
https://www.coindesk.com/short-guide-bitcoin-forks-explained
https://git-scm.com/book/en/v2/Getting-Started-A-Short-History-of-Git
https://www.linuxfoundation.org/blog/2015/04/10-years-of-git-an-interview-with-git-creator-linus-torvalds/
https://www.cryptocompare.com/coins/guides/the-dao-the-hack-the-soft-fork-and-the-hard-fork/
http://fortune.com/2017/08/11/bitcoin-cash-hard-fork-price-date-why/

Find us at https://www.linkedin.com/company/blockrunners
Digi B (Chris Barnett) Twitter: @cbvids
Professor K (Nic Krapels) Twitter: @shanghaipreneur
Mr. Lo (Amal Sudama) Twitter: @cdsudama

In our first interview-based show on BLOCK RUNNERS, we introduce our third co-host - Amal Sudama, an Ethereum developer.

He believes that decentralization, both politically and data-architecturally, allows blockchains to be:
- Less likely to fail because they rely on many separate components.
- Harder to attack because the networks are spread across many computers.
- Harder for users with malicious intent to take advantage of users who are using the platform for its intended purpose.
- Hard-coded with a survival instinct that makes the blockchain very resistant to attacks. If one node stops working, or even 100 nodes, the blockchain survives, assuming there is at least one node up and running.
- Resilient because the blockchain does not stop working even if the power is lost in an entire country, a feature which cannot be said of many of the existing systems we use on the Internet.

Today, companies like Facebook, Amazon, and Google dominate the Internet. They offer many free or cheap services because they are able to collect valuable data on their users, and find ways to monetize that data. As a user of the modern internet, one is never too sure where their demographic and personal data is being used.

Through the implementation of decentralization, also called Web 3, data does not have to be stored in centralized systems. Data can be verified independently and individuals can transact directly with each other, instead of requiring a centralized entity to verify these interactions. Micropayments become a feasible method of being rewarded for value created. Users control how their data is used and accessed over the Internet, and can be paid for the use of their data. Decentralization dis-intermediates central control of systems. Instead of a single company being responsible for writing information to a centralized database, the responsibility of recording transactions falls to anyone who wants to participate in a blockchain.

Thus, decentralized blockchain-based systems are a significant shift in thinking. They are different both philosophically and technically than our current web-based back-end infrastructure and are specifically engineered to be an alternative to the centralized systems we are familiar with.

Amal recommends this link for blockchain newbies to better understand basic concepts: https://www.youtube.com/watch?v=_160oMzblY8

Links mentioned in the podcast are below:

- Truffle Framework for developing Ethereum dapps and smart contracts: https://truffleframework.com

- Unchained is the Ethereum-based solution mentioned for refugee management on the blockchain: https://www.unchained.id

Hello world!

Block Runners will be talking about the good and the bad of blockchain, led by your hosts Professor K and Digi B, and this is our intro show.

Look forward to our upcoming first interview show when we will talk to blockchain developer Amal (Marcus) Sudama.