Miners perform cryptographic hashes (two successive SHA256) on what is called a block header.For each new hash, the mining software uses a different random number called the nonce. The nonce is an integer value with 32 bits of memory allocated to it.
This means that it is limited to only around 4 billion possibilities, which with the network’s current hashing power is largely insufficient. We therefore add in the hash timestamp of the block in Posix time , constantly updated. Another variable element on which minors can play: the arrangement of transactions.
Including the block number, timestamp, nonce, block data and hash of the previous block, the hash produced will look like this:
This hash can be converted into a very long number. (It is a hexadecimal number, which means that the letters AF are the numbers 10-15). To make mining difficult, there is something calledtarget difficulty.
To create a valid block, a miner must find a hash that is below the target difficulty. For example, if the difficulty is:
Because the target is a bulky number with many digits, a simpler number is usually used to express the current target. This number is called the mining difficulty.Mining difficulty is scaled to the first block created. Which means that a difficulty of 70,000 means 70,000 times more computing power than it took Satoshi Nakamoto to generate the first block, when he was the only miner and only using the CPU of a computer.
When mining a block, miners include a timestamp in the block. Since 2016, this ” timestamp ” allows the network to adjust to the passage of time by calculating the median time spent (MTP), that is to say the median of the timestamps of the last 11 blocks. To be valid, a timestamp cannot be more than two hours in the future relative to the node’s subjective time.
The difficulty changes every 2016 block. The network adjusts the difficulty so that the generation time of these 2016 blocks is 14 days, regardless of the computing power deployed.
Therefore, the difficulty follows the power of the network. The adjustment algorithm is as follows: if the time measured in the period of 2016 blocks is less than 20,160 minutes (expected time), then the difficulty increases to comply with the assumed computing power; if it is higher, then the difficulty decreases. Retargeting is limited to a factor of 4 (multiplication as division) to avoid instabilities.
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Bitcoin transactions are secured. To this end, miners perform mathematical calculations for the Bitcoin network with their computer equipment.
As a reward for their services, they collect the newly minted bitcoins along with the fees from the transactions they confirm. It is halved approximately every four years. On May 11, 2020, this reward increased to 6.25 bitcoins per block.
Miners (or miners’ cooperatives ) are in competition and their income is proportional to the computing power deployed.
“To describe mining, one could use the example of a gigantic sudoku contest where participants start a new grid as soon as someone finds a solution, and whose difficulty adjusts so that on average a grid is resolved every ten minutes. Imagine a giant sudoku grid, with several thousand rows and columns. It would be quite easy to verify that a completed grid is well filled. But […] it will take a lot of work to finish it! The difficulty of the grids can be adjusted by changing their sizes […], but they can still be checked easily even if they are very large. The puzzles to be solved in the bitcoin network are based on cryptographic hashes and have the same characteristics as these sudoku grids: they are very difficult to solve but it is very easy to verify that a solution is correct, and their difficulty can be adjusted. –Andreas M. Antonopoulos.
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Developed from 2008, blockchain is, first and foremost, a technology for storing and transmitting information. This technology offers high standards of transparency and security because it works without a central control body. More concretely, the blockchain allows its networked users to share data without an intermediary.
In practice, a blockchain is a database that contains the history of all exchanges made between its users since its creation. Its main characteristics are:
The identification of each part is carried out by a cryptographic process
The transaction is sent to a network (or storage “node”) of computers located around the world.
Each “node” hosts a copy of the database in which the history of the transactions carried out is recorded. All stakeholders can access it simultaneously
The security system is based on a consensus mechanism of all the “nodes” each time information is added. Data is encrypted and authenticated by “data centers” or “miners”. The transaction thus validated is added to the database in the form of a block of encrypted data (this is the “block” in blockchain)
Decentralized security management prevents transaction tampering. Each new block added to the blockchain is linked to the previous one and a copy is transmitted to all the “nodes” of the network. The integration is chronological, indelible, and tamper-proof.
The blockchain represents a major innovation that is used in particular in the banking sector. Indeed, historically, blockchain technology was developed to support transactions carried out via cryptocurrencies/crypto-assets (including bitcoins which are the most well-known form) and which have the main characteristic of not depending on an organization centralizer (like a central bank) and to be international.
But its use is not limited to cryptocurrencies. Many fields and sectors of activity, commercial or non-commercial, public or private, already use the blockchain or plan to do so in the years to come. The uses of blockchains and other technologies include:
In the banking sector, technology opens up the possibility of validating transactions without the intermediary of a clearing house, which should make it possible to certify transactions in much shorter timeframes. The blockchain can also promote the sharing of information between competing players in a financial centre while respecting the secrecy of their commercial data and, in doing so, facilitate the management of common structures or instruments by reducing contact costs and administration fees.
In the insurance sector, the contribution of the blockchain is due, for example, to the automation of reimbursement procedures and the alleviation of certain formalities at the expense of companies and their customers, provided that the assumptions and conditions of compensation and damage are clearly established.
In the logistics sector, the blockchain has two interests:
ensure product traceability, as well as the memory of the various interventions on a production and distribution chain.
reduce formalities and create the conditions for cooperation between actors in a sector, particularly in terms of information exchange. This use could also find an application in the agri-food sector for food traceability, particularly interesting in the event of a health crisis.
In the energy sector, by authorizing the exchange of services and values outside a central management body, the blockchain potentially creates the conditions for implementation on a more or less large scale depending on the technical capacities of local networks. production, exchange and resale of energy to balance supply and demand at all times, which is a major constraint for electricity networks in particular.
But many sectors are potentially affected by the use of blockchain technology: health, real estate, luxury, aeronautics, etc.
Using blockchain has many benefits, including:
The speed oftransactions thanks to the fact that the validation of a block takes only a few seconds to a few minutes.
Security of the system, which is ensured by the fact that the validation is carried out by a set of different users, who do not know each other. This protects against the risk of malicious intent or hijacking, since the nodes monitor the system and check each other
The productivity and efficiency gains generated by the fact that the blockchain entrusts the organization of exchanges to a computer protocol. This mechanically reduces the transaction or centralization costs existing in traditional systems (financial costs, control or certification, use of intermediaries who are remunerated for their service; automation of certain services, etc.).
WEB 3.0 AND THE METAVERSE
As conversations began to shift from Bitcoin (BTC) to other largercrypto projects such as Ethereum network upgrades and central bank digital currencies, or CBDCs, media coverage would suggest that widespread adoption of crypto is already well advanced. But it is clear that the majority of people do not know what it is.
The Metaverse (in English) or Métavers (in French) is a generic term for technologies that make it possible to create an entire (virtual) digital universe like our real universe. This universe can be extremely detailed and include a wide variety of different worlds, often also called virtual environments. People can join this Metaverse using different technologies and interact with each other. However, instead of being present in person, the user creates an avatar which is their representation in the Metaverse.
However, the Metaverse doesn’t just want to be a massively multiplayer open-world gaming platform (RPG MMO). It is already beginning to be a virtual space where people work, earn money (by spending it), meet people, and invest in real estate. In short, where you can live another life.
Technologies like Augmented Reality (AR) and Virtual Reality (VR) are important levers for the Metaverse, as they will help create an incredible sense of immersion in another’s skin and in another universe. However, there is one project that may well facilitate mainstream adoption of crypto: Web3.
To better understand the evolution of these two technologies, an illustration between Web2 and Web3 as support for the Metaverse.
NFT are the three initials of Non-Fungible Token, which translates to non-fungible token. That doesn’t necessarily make things any clearer. Therefore we must detail the notion of “non-fungible”.
For example, bitcoins or €100 bills are fungible. Even though each note is unique, it will have exactly the same value as another €100 note. The first mined bitcoin, no matter what platform it is on or who owns it, is the same value as a recently mined bitcoin stored in another wallet.
Conversely, works of art or concert tickets are non-fungible.Something that is not fungible cannot be replaced or divided. It’s unique. They are objects of the same nature, but which have their own characteristics and their own usefulness.
We talk about “tokens” when they are digital units, which are exchanged with blockchain technology: 3D visuals, objects in a video game, or even a piece of land in a fictional universe.
The NFT can therefore be defined as follows: it is the digital title of ownership of a non-fungible token. NFTs can be classified into different categories according to their nature and usefulness:
collectibles: a collection of digital objects, or a work of art for example.
metaverses: virtual worlds.
online gaming tokens.
utilities: they provide a service to their owner.
Some NTFs may belong to more than one category. They are traded on online marketplaces dedicated to NFTs, connected to the blockchain.
The value criteria of an NFT: This young technology has a future ahead of it, but it could lead to some abuses. Many investors seek to speculate on this trend which, although it is a resounding success, is still very volatile and full of scams. The vast majority of sold works and NFT projects will never have value, simply because no one wants them.
Some NFTs have artistic value: They are works valued independently of the fact that they are digital, in the same way as a painting in a museum. The blockchain does not have a preponderant role in the evaluation of their price, it is simply the art market. Overall, price is defined by what an artist’s fan is willing to invest.
The value of an NFT can also depend on its usefulness: Becoming a member of a club, meeting other holders or the artist himself, being more powerful in a video game, acquiring and showing a certain social status, etc. .
BIBLIOGRAPHY
My name is Joel Nzoda Consultant in Digital Marketing, Junior Blockchain Developer, Junior cyber Security Consultant and Expert in blockchain technologies. I hope I have been able to bring value to each other, I remain attentive. Discover my activities on social networks.
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With all the ongoing debate about the inherent value of NFT, for myself, as the founder of Digital Arts For Social Impact (DASI) , I believe that NFT can be an effective channel for positive social impact.
NFT started in the year of 2012, backed by the basis of bitcoin then, since Etherium hadn’t started before then – and since that point, there have been many ongoing conversations as well as trades that have happened on the digital space.
Some see it as an opportunity to get rich quick, given the number of rug pulls that has happened due to insider traders making a quick run after a successful fund raise, while others see it as an opportunity to express their art – and letting keen buyers own an original authentic piece of their work without any potential risk of inauthentic duplication.
For myself, my exposure to NFT, blockchain as well as Web 3.0 definitely changed the way he viewed work as well as the digital space, and it definitely pivoted me from being a typical salaryman to someone who can also create positive social impact with the help of NFTs.
Afterall, the basis behind the creation of an NFT can be condensed into 7 simple steps:
1) Create/pick your artwork/ unique creation
2) Choose your choice of blockchain tech
3) Setting up your digital wallet for transaction
4) Shortlist & Select your NFT marketplace.
5) Upload your NFTs
6) Develop a robust sales & marketing plan for your NFTS
7) Fund-raising and channeling it to an effective cause.
In fact, it was with this knowledge that I have also invested heavily into ethereum as well as developed a robust team made up of industry veterans as well as artists across the globe, to serve the impoverished community around the world – one of which being Cambodia.
For DASI’s very 1st upcoming project, Darren & his team made up of industry veterans as well as artists across the globe, they have ambitiously set their sights to help impoverished Cambodian kids to fund raise for their very own school – with hopes that this will be a beacon for future NFT projects that will lead to support more social causes.
