Baruch College students and professors gathered to discuss the cryptocurrency bitcoin and blockchain technology with student speaker Tristan Thoma at Hacks for Baruch, a club dedicated to spreading knowledge about technology and entrepreneurship to the Baruch student population. Thoma gave an informative presentation describing the fundamentals of blockchain and bitcoin.
After handing out a useful vocabulary guide for the audience to follow along, Thoma began his presentation using a carefully organized slideshow, which answered basic questions about blockchain software, the technology behind bitcoin.
He incorporated examples and images to explain the unique permanence and speed of blockchain transactions.
To break the process down, Thoma focused in on how the chain of blocks form from secure hash algorithms, which are like signatures for a text or data file. Hash measures the amount of power that goes into mining bitcoins; it plays out as a lottery between computers competing to solve a mathematical equation without the use of logic.
Sometimes, pools — where a bunch of mining computers are used — are formed to increase the chances of solving the equation correctly. As more energy is put into hash, the mined bitcoin value increases.
In the case that multiple miners solve the equation at once, blockchain uses a fork to duplicate and split the record while keeping all previous transactions intact. Forks are useful for solving such conflicts in a decentralized environment, Thoma explained.
In the presentation slides, a block storing multiple lines of code is moved onto a chain and before the next block is set down, a proof-of-work system makes sure each transaction line is correct.
Once the next block is placed, the previous block is no longer able to be corrected. Blocks can only be added after the record storing software ensures that all previous transactions are accurate. Thoma calls this a system of “trust by computation.”
Thoma tells the audience that he considers bitcoin to be an asset rather than another cryptocurrency. He argues that the underlying technology behind bitcoin separates it from other cryptocurrencies.
In addition, he highlights that bitcoin has not faced a single hack in its lifetime. The only problems with security have been made through human error rather than actual cracks in the blockchain code.
For example, if a user loses their password, or it ends up in the hands of someone else, then the user is to blame for any issues that occur. While most initial coin offerings gain their value by being introduced in particular sectors, bitcoin benefits from a universal appeal. It is a quick, easy and anonymous way of carrying out transactions without disclosing personal information.
The easiest way that Thoma says people can obtain bitcoin is by buying it through websites like Coinpay. However, he notes that bitcoin production will eventually stop when the 21 million bitcoin mark is reached. Each bitcoin can also be divided up to eight decimal places while still being handled in transactions.
A hundred-millionth of a bitcoin is called a Satoshi, named after the original bitcoin creator, and is currently the smallest possible bitcoin measurement.
Digital wallets are used to hold the cryptocurrency, secured with both a public and a private key. The private key allows the user to send their digital wallet content to others, while the public key is similar to a bank account number, which is given to those who wish to send it.
In concluding his lecture, Thoma indicated some of the drawbacks of bitcoin. He admits being biased toward the cryptocurrency and understands that there are major flaws in its system.
For example, the mining process, which bitcoin derives its value from, is extremely time consuming. The cryptocurrency itself can also be exploited by criminals in money laundering and tax evasion schemes.
However, Thoma ended on a positive note by talking about the many benefits bitcoin will convey to its users in the future. For example, bitcoin’s technology would benefit supply chain managers by enabling them to use less banks. It could also aid in storing individual healthcare records and improve the U.S. voting system.
Thoma’s overall lecture gave a well-rounded look into bitcoin and blockchain technology, which served as both a reference tool for beginners interested in cryptocurrencies, and as a review for experienced cryptocurrency investors.
The audience was left with a deeper understanding of bitcoin’s recent success. Some who attended the talk may now consider cryptocurrency as a future potential investment.
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