Sunday, January 7, 2018

Understanding Blockchain

One of the reasons that I really like cryptocurrencies is that they are something built with technology and can solve some real day to day issues. Why I like them as an investment vehicle is that I understand how the fundamental underlying technology works. I would suggest that you really shouldn’t invest your money in something you don’t understand because when things go wrong you have no idea why and what actions to take.

With this in mind, I am always combing the Internet for good tutorials on how crypto currencies and the underlying technology, known as blockchain, actually work. Here are four of the best that I have currently found that will help you better understand what lies under the covers of most cryptocurrencies.

https://www.youtube.com/watch?v=J-ab9was1p0

This first one is a great overview to give you an idea of blockchain and cryptocurrencies work. One of the key terms to get your mind around is a distributed ledger which this video covers well and how it works for cryptocurrency and other areas.

The next concept that is important to understand is cryptographic hash algorithms. The above video does explain this but for a much better deep dive into these take a look at this video:

https://www.youtube.com/watch?v=_160oMzblY8

The video does an excellent job of showing you in detail how a blockchain actually works.

Following on from that video, is this one by the same author:

https://www.youtube.com/watch?v=xIDL_akeras

It helps you understand the concept behind public and private cryptographic keys and how they interact with the blockchain to make it secure and private using it as signatures.

This final video is a great overview that brings all the above together:

http://www.youtube.com/v/bBC-nXj3Ng4

If you watch all four videos in full I think you’ll have a much better idea of how blockchain and cryptocurrency works. Hopefully, that will make you a much more informed investor when it comes to investing in cryptocurrency going forward. However, I hope that it also makes you more aware of the major impact blockchain is going to have outside just cryptocurrencies. This was the real ‘ah ah’ moment for me when I began to fully appreciate the revolution that is going on here.

Of course, there are issues with the way that blockchain has been implemented via Bitcoin. One of these is it’s current in ability to scale as well as the dependency on ‘miners’. I’ll look at these issues in an upcoming article because they are being addressed in both an evolutionary and revolutionary way. That is, some are improving the existing Bitcoin blockchain while others are creating whole new blockchain technologies. Again, another reason I really enjoy this field, the amount of innovation that is taking place currently is amazing.

I’ll bet there are also plenty of other great explanation videos out there. If you have found one, please share it with me so I can add it my collection.