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Blockchain Basics

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A blockchain, originally block chain, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, a blockchain is inherently resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability or voting.

The first blockchain was conceptualized in 2008 by a person or group known as Satoshi Nakamoto and implemented in 2009 as a core component of bitcoin where it serves as the public ledger for all transactions. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem without the need of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.

The first blockchain was conceptualised by a person or group known as Satoshi Nakamoto in 2008. It was implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions on the network. By using a blockchain, bitcoin became the first digital currency to solve the double spending problem without requiring a trusted administrator and has been the inspiration for many additional applications.

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20GB (gigabytes). In January 2015, the size had grown to almost 30GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50GB to 100GB in size. The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016.

The term blockchain 2.0 refers to new applications of the distributed blockchain database, first emerging in 2014. The Economist described one implementation of this second-generation programmable blockchain as coming with “a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level”. Blockchain 2.0 technologies go beyond transactions and enable “exchange of value without powerful intermediaries acting as arbiters of money and information”. They are expected to enable excluded people to enter the global economy, protect the privacy of participants, allow people to “monetize their own information”, and provide the capability to ensure creators are compensated for their intellectual property. Second-generation blockchain technology makes it possible to store an individual’s “persistent digital ID and persona” and are providing an avenue to help solve the problem of social inequality by “potentially changing the way wealth is distributed”. As of 2016, blockchain 2.0 implementations continue to require an off-chain oracle to access any “external data or events based on time or market conditions [that need] to interact with the blockchain”.

In 2016, the central securities depository of the Russian Federation (NSD) announced a pilot project, based on the Nxt blockchain 2.0 platform, that would explore the use of blockchain-based automated voting systems. IBM opened a blockchain innovation research center in Singapore in July 2016. A working group for the World Economic Forum met in November 2016 to discuss the development of governance models related to blockchain. According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase. Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

Structure

A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. This allows the participants to verify and audit transactions inexpensively. A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests. The result is a robust workflow where participants’ uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value-exchange protocol. This blockchain-based exchange of value can be completed more quickly, more safely and more cheaply than with traditional systems. A blockchain can assign title rights because it provides a record that compels offer and acceptance.

Blocks

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. Each block includes the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain. This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks. Peers supporting the database have different versions of the history from time to time. They only keep the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down exponentially as more blocks are built on top of it, eventually becoming very low. For example, in a blockchain using the proof-of-work system, the chain with the most cumulative proof-of-work is always considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.

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Blockchain News

MoneyGram’s New Time Remittance Technology backed by Visa not Ripple

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A new service introduced by remittance giant (MoneyGram) which allows users to send and receive money in real-time has been credited to visa and not the work of its blockchain-based partner (Ripple) in an announcement by representatives of the company.

The recently launched Fastsend, a new service which allows clients to send money in real-time to a phone number through a mobile application or dedicated website. While responding to enquiries from news sources about the latest concept, it was revealed to much surprise that MoneyGram did not make use of the technology of Ripple to achieve the latest product.

Do we need blockchain for real-time settlements?

MoneyGram Chief Operating Officer, Kamila Chytil informed news sources that FastSend makes use of Visa’s Direct Original Credit Transaction to send funds to bank accounts making use of Debit card deposit which is clearly not blockchain-backed or related.

Without the need for DLT, the dedicated website and app make use of an open-source cloud-based microservices. Chytil further stated that although Ripple is not involved in the new product, the firm still makes use of Ripple’s blockchain in other fields of the company.

Also, Chytil made mention of MoneyGram’s continuous effort on how to utilize blockchain in areas where it could assist to solve data privacy and regulatory obligations via distributed ledger technology. In her remarks, she spoke highly of DLT technology and cryptocurrencies, stating that the firm believes blockchain to be the future of global cross border payments and transfer of money.

As MoneyGram continues to research on the multiple use cases in order to tap into Ripple’s tools while integrating with the recent version of Ripple’s service suit to introduce cash-out service to all network members.

It is worth noting that Ripple is gaining increased support and approval among financial institutions to provide them with its DLT services in Africa with the National Bank of Egypt joining its network, this has been seen as a welcome development as it would do well for the inward remittance within the region the Ripple Network.

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Finance

Nigeria Calls For an Extension of the Time Set for the Eco Currency Launch for West Africa

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Nigeria, the country with the largest economy in Africa calls for a delay in the progression of Eco Currency.

Nigeria on Monday has expressed her view on the issues of the progress made so far in the creation and official use of the Eco currency for the West  African region.

According to the Presidential Tweet on twitter;

“Nigeria’s position on the Eco is that the convergence criteria (between states) have not been met by the majority of countries” which will adopt this common currency”

“There, therefore, has to be an extension of time on the take-off of the single currency,”

Nigeria has its own currency, the Naira.

See Also; CryptoTVPlus partners with Kubitx to Spread Crypto Awareness using Local Languages.

The Eco single currency has been a controversial issue since the idea was initiated. It was after more than 25 meetings on the subject, that the 15 member countries of the Community of West African States (ECOWAS), finalized that it would be launched in 2020.

There is currently eight out of the 15 ECOWAS countries using the CFA franc, but were looking to cut financial ties from France, their former colonial power.

The height of the controversy followed after President Ouattara of Ivory Coast all of a sudden denounced CFA for the francophone countries for the Eco currency following Emmanuel Macron’s visit to the country.

Nigeria, a member of ECOWAS, and some other Anglophone West African countries denounced the agreement. This is because the monetary policies governing the issue of Eco currency doesn’t align with the requirements adopted in the region to set up the single currency.

Written By Ogbuowelu Anthony Uchechukwu

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Finance

Yahoo Finance Adds Cryptocurrency Market Data on its Website

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US based financial news firm, Yahoo Finance has partnered with Coinmarketcap to add cryptocurrency market data on its website amongst other financial reporting data.

The data which is supplied by the popular cryptocurrency market data aggregator Coinmarketcap now allow visitors on the website to track the prices of cryptocurrencies daily.

Currently available on the website are 118 cryptocurrencies ranked in the order of their market capitalization. The price data on the website are denomination in USD.

The website has a feature which it calls Heatmap View. It allows visitors to see the price actions on each crypto assets. A red signal shows the asset has dipped while a green signal reveals a gain in the asset.

Registered users can add any cryptocurrency to their portfolios.

Just like coinmarketcap reports, the Yahoo Finance website also reports detailed information on each cryptocurrency it has listed in its website.

The website reports on each website various market data such as current price, changes in percentage and amount, market capitalization, volume and circulating supply.

Yahoo finance also have individual pages for each cryptocurrency listed on the website. Yahoo Finance was quoted saying “We are thrilled about this partnership which comes timely as we continue to level up our game with the new liquidity-based metrics for ranking market-pairs and an improved pricing algorithm coming soon.”

Other than data from Coinmarketcap, Yahoo Finance also have two indices Crypto 200 (including Bitcoin) and Crypto 200 EX (i.e. excluding Bitcoin)

The data on the website incorporates pricing from over 200 exchanges, according to the Finance reporting organization, the indices provide exposure to the broader cryptocurrency market by including the cryptocurrencies that represent more than 90% of global market capitalization as of the index launch date.

Its daily newsletter and blog content will also be integrated into the news stream on finance site’s cryptocurrency screener landing page as well as the individual cryptocurrency pages.

The firm said in the future, it will plan to produce more educational video features, which it hopes will further add to the educational content on the website.

Image: Yahoo Finance

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Facebook to launch Facebook Pay to Provide Users With Secure and Convenient Payment Experience

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Is Facebook Pay an alternative to Libra?

Facebook has announced it will be launching the Facebook Pay service to provide people with a convenient, secure and consistent payment experience across its platform.

According to Facebook, people already use payments across its platform to shop, donate to causes and send money to each other. The Facebook pay will make these economic events easier while continuing to ensure user transaction information is secure and protected.

In order to use the service, users are to add their preferred payment method once and then use the service where it is available to make payments and purchases on the facebook’s platform apps. This will ensure users are not inconvenience as they wouldn’t be required to enter their payment information again.

The Facebook Pay will be available on Facebook and Messenger this week for US customers for fundraising, in-game payments, and event tickets, person-to-person payments on Messenger and purchases from select pages and businesses on Facebook marketplace.

According to Facebook, over time, the service will become available to more people and places including on its Instagram and WhatsApp platforms.

Security

Facebook iterates its desire to continue investment in security of its platform.

Facebook said “We designed Facebook Pay to securely store and encrypt your card and bank account numbers, perform anti-fraud monitoring on our systems to detect unauthorized activity and provide notifications for account activity”.

Facebook Pay allows users to add Pin or use their device biometrics for extra security when sending money or making payments. Facebook argues it will not receive or store users device biometric information based on its privacy policy.

To the Future

The Facebook Pay is part of our ongoing work to make commerce more convenient, Facebook said and this also will make it accessible and secure for people on its app.

And it will continue to develop Facebook Pay and look for ways to make it even more valuable for people on our apps.

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