This comprehensive guide covers everything you need to know about the blockchain, the innovative technology that powers Bitcoin, Litecoin, and other cryptocurrencies.
The blockchain is powerful technology that enables Bitcoin, Litecoin, Dogecoin, and other virtual currencies to be open, anonymous, and secure.
The code also empowers countless innovations beyond cryptocurrency. The blockchain is a database of details about every Bitcoin transaction. Often referred to as a "public ledger," the log contains metadata about when and how each transaction occurred.
The ledger is publicly accessible through APIs and torrent sites. To prevent tampering with current and past transactions, the database is cryptographically secured. Encryption allows developers to trust the transaction history and build applications from and around transaction information.
Because the blockchain can be confusing, TechRepublic has compiled this guide to help business technology professionals get up to speed quickly. Blockchain innovation iterates rapidly, so our "living" guide will be continuously updated to help provide the most contemporary information about the technology.
Executive summary
What it is: The blockchain is a cryptographically secure index of every Bitcoin transaction. Blockchain technology is also used to enable a number of public and private virtual currencies, such as Litecoin and Ethereum.
Why it matters: Over time, cryptocurrencies like Bitcoin may fade in and out of fashion. The blockchain is intended to provide a tamper-proof record of transaction metadata, regardless of transaction type.
Who it affects: Everyone who spends money. Bitcoin evangelists argue that because blockchain-based currencies are based on code, not governments, the code is more reliable and fair than traditional monetary systems.
When it's happening: The blockchain and Bitcoin were coded and released to the public in a white paper by mysterious developer Satoshi Nakamoto in 2008. The currency hit the mainstream in 2012 and peaked in value in 2013.
How to access the blockchain: The blockchain API is available atblockchain.info, and can be downloaded using Bittorrent (a similarly named but unrelated technology) on most major torrent sites.
The blockchain is a record of every Bitcoin transaction. The name comes from the method by which Bitcoin is unlocked and available to be mined by the public. The code releases nodes in 1 MB chunks, or "blocks," approximately every 10 minutes. Every coin, and every transaction related to each coin, is logged. Because the blockchain is available to anyone and contains metadata similar to a bank statement, the code is often referred to as a "public ledger."
The database is cryptographically secure and the chain is reliable and can be used to develop applications and protocols that require transparency and complete security. The primary advantage of money—like dollars, euros, and Bitcoin—is that the currency is understood by everyone, yet can be controlled by individuals or institutions. The blockchain, and Bitcoin, offers the additional benefit of transparency. Code, rather than a government, dictates the supply of Bitcoin. In the summary for his white paper Nakamoto explained:
[Bitcoin is] an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers.
Image: Satoshi Nakamoto
Why it matters
Virtual currencies offer an alternative to government-issued money. These currencies are exchanged like cash for goods and services. They can also be converted easily by a number of services for traditional currency like dollars, pounds, and euros. Because transaction information is obfuscated, cryptocurrency enables legal, extralegal, and illegal behavior. Using Bitcoin, it's easy to buy pizza, train tickets, stolen data, drugs, and weapons.
The blockchain is, in theory, future-proof and can be used by private companies and individuals to build private financial networks. This means that a large enterprise could build a financial system internally for use by employees or external vendors. Though most countries require tax to be collected from income, taxing company-to-company virtual currency transactions is tricky.
The blockchain can also be used as an identity system. Onename andKeybase use the blockchain to generate verifiable identification, like a national ID or driver's license.
Well-funded startups also use the blockchain. Because the blockchain is data-rich, secure, and offers unprecedented transparency the code can be used as the building block (pun intended) for numerous modern, and future, technologies and startup companies. Etherium, for example, is a blockchain startup that helps enterprise companies develop private chains and private currencies. Mycelium builds physical point-of-sale systems and debit cards for cryptocurrency.
Corporations, small businesses, and individuals all need to be aware of the blockchain. Because the blockchain allows financial transactions to occur anonymously, the technology has empowered the growth of questionable, sometimes illegal, behavior. In recent years ransomware has become a popular method of extorting consumers.
Black markets have exploded in popularity. These markets exist on the Dark Web and allow hackers to buy and sell stolen data, zero-day exploits, drugs, weapons, and humans. The United Nations, the FBI, and other law enforcement agencies attempt to track illicit Dark Web transactions, but Bitcoin-based markets continue to flourish.
The blockchain has been available since 2008 and is employed now by millions of users. The great irony of the blockchain is that while Bitcoin transactions can be anonymous, every transaction is logged and can be viewed in a simple web browser. Blockchain.info streams real-time transaction information and contains copious information about personal coin exchanges, Dark Web uses, real-estate firms, and even music streaming services that rely on the blockchain to verify media ownership rights.
The most common method of accessing the blockchain is by using the API, located at https://blockchain.info/api. The API defines several types of calls, including transaction details, wallet creation, storage methods, and current Bitcoin market and trading data.
The chain is a multi-gigabyte (and growing) file and can be downloaded locally, using BitTorrent. It's updated daily and can be downloaded as a torrent or magnet file.
Agribusiness is being digitised by IoT sensors and the cloud
Moo-ve over, runners and joggers – you're not the only ones who are wearing aFitbit, Jawbone or the Vivofit. Fujitsu has come up with its 'Akisai' cloud for agribusiness, of which the centrepiece is undoubtedly the connected cow.
When cows are in heat, they walk more, so by attaching pedometers to them farmers can identify which ones are ready for breeding. This cloud-based Akisai platform – Fujitsu's attempt at Software as a Service (SaaS) to increase efficiency and modernise agriculture – could replace farmers with data scientists.
Precision farming
They're calling it 'precision farming'. Just as in industry, business and wider society, the food industry is quickly embracing the very latest Internet of Things devices and big data innovations. By collecting more and more data on their livestock, crops and on growing conditions, yields can not only be controlled, but predicted.
The seed-bed is becoming a test-bed for some of the latest tech, with autonomous planters, artificial intelligence and cloud computing all helping an increasingly digital agribusiness to plough a new furrow in FarmTech. The end goal? An Internet of Food where everything is produced at the most efficient level possible, tracked, and traced to its destination
Crop sensors
As well as cows, Akisai deals in rice production and vegetables. On its Aizu-Wakamatsu Akisai Plant Factory in Fukushima Prefecture, Japan, technicians have created a self-contained, fully controlled greenhouse inside an old semi-conductor plant.
"Data is collected from sensors that provide information on things like soil temperature, humidity, light levels and rainfall," says Richard Marquardt, spokesperson at Fujitsu Japan in Tokyo. "This data enables farmers to access accurate information on growing conditions so they can implement changes to increase yields." However, it's what happens to that data that's the magic ingredient.
Cloud farms
"We're performing big data analytics on the data gathered from the sensors, and using Microsoft's Azure cloud for the IoT system analytics," says Takao Mizutani, Director of the IoT Business Division, Network Services Business Unit at Fujitsu in Tokyo. Calculations in the cloud precisely control the atmosphere – and, crucially, predict the exact yield of the crop – by regulating temperature, moisture levels, and even the active ingredients included in very specific amounts of liquid fertilisers.
"Akisai also uses machine learning to get new insights from the past growing data," adds Mizutani, with data on previous yields automatically informing how the next crop is handled. Akisai has also been used to reduce the amount of pesticides used in tomato growing.
Remote sensing
As well as reducing pesticide use, new tech is being used to save water. Hahn Wines in California's drought-hit Santa Lucia Highlands has turned to unmanned aerial vehicles (UAV) – remote-sensing drones – to monitor air quality and take images of vine density. Combine that with similar sensors found in Akisai – such as temperature, humidity and soil moisture – and the farmer knows exactly how much water the vines need.
"The drone is a flying computer and has the artificial intelligence to make the best possible decisions in-flight to collect consistent and accurate data every time," says Patrick Lohman, VP of Partnerships at PrecisionHawk, which provides Hahn Wines with its PrecisionHawk Lancaster UAV. In an almost completely automated system, the drone sends images and readings back to a drone data mapping and cloud analytics platform called DataMapper for calculations and data analysis.
Autonomous planters
Monitoring how crops are doing, and what they need, is one thing, but what about the actual planting? That's also being streamlined as farms get networked. Using GPS, John Deere already sells automated planters that can run at 10mph and autonomously plant 24 rows of seeds to a depth of exactly 1.5-inches, and plant them 3-inches apart. All the farmer does is use the SeedStar app on aniPad, where real-time readouts of the planters' progress are viewable.
Productivity priorities
With planters able to take measurements and transmit data, the key ingredient in smart farming becomes the SaaS platform. Business application software company SAP has developed SAP Vehicle Insights, which collates all the data collected on the farm and introduces unstructured data, such as weather information and imaging from satellites.
"It makes big data into smart data," says Matthias Aurin, SAP software development architect at SAP SE (smart farms). "It integrates all the data available – from sensors and connected machines, external weather information, satellite images, information from drones, and past growing information – and transforms it into valuable business data to help the farmer prioritise."
Resource billing
For instance, the system can identify which fields need irrigation, but if there's rain predicted, it informs the farmer. "Farmers can measure the profitability of fields, and see why some fields are more profitable than others," says Aurin. "You can reduce the amount of fertiliser according to exactly what's needed."
The SAP system can also show the availability of a farmer's favoured sub-contractors, but the fleet management part of the system helps them, too. Since it collects telematics data from connected vehicles – on speed, fuel consumption, and exactly what they're doing – a contractor can see precisely how much fertiliser and fuel is being used, enabling resource-related billing.
An Internet of Food?
Most of this tech is aimed at producing greater amounts of food more cheaply. "Increased yields at the farm level through other Internet of Things applications – such as soil moisture monitoring, weather pattern analytics, and the use of drones – should also increase the supply of food," says Isabel Chapman, Principal Analyst at Machina Research.
But Internet of Things applications are also being used to streamline the 'cold chain' in an effort to make imported, globally-traded foodstuffs – such as prawns, and vegetables that spoil quickly – more reliable. By fitting a SIM card to a refrigerated container, the owner can view its location and see a digital audit trail of any delays or breakdowns. It's much like a black box recorder on a plane.
"IoT applications provide real-time audit trails, notifications, and monitoring of shipments from producer to retailer," says Chapman. "Each partner in the chain can have access to all information as the shipment is in transit."
From networked farms and climate sensors to activity trackers and drones, the IoT, big data and the cloud is quickly finding fertile ground.
I’d like to talk about something we rarely celebrate: failure. And why we are counting on you to fail. Now bear with me, and you’ll see where I’m going.
Last year I was given the opportunity of a lifetime -- to give the commencement speech at the program where I both trained and was a faculty member.
Fail Harder Now, Succeed Easier Later
After the speech a few things happened that I never expected that really impacted me. The first was to being able to watch a close friend for over a decade receive their Ph.D. on the same stage. Second was being able to interact with students and their family afterwards. If there is one thing that will make you hopeful for our future, it's listening to their hopes, dreams, and challenges.
The raw enthusiasm for life and hunger for improving the world will turn the biggest doubter into a believer. The biggest thing that I didn't expect has been the notes and stories of people who took the message to heart and changed their career path to focus on what they love. I don't think there are words that can express how that made me feel.
Unfortunately, no recording of the talk made it unscathed, but here's the transcript of my 2012 commencement speech -- Failure is our only option.
Failure is our only option
Have you ever been in one of those moments where you realized that gee, what’s the harm if I take the quick shortcut, who’s going to notice? (of course none of you did anything like that while here at Maryland) Well, I decided to take the opportunity to give myself an edge. As a Silicon Valley tech guy, I decided to use technology and the world to help me prepare for this commencement address. So, I asked people on LinkedIn, Facebook, Twitter, and Quora to figure out what wise words you should be imparted with and also what they remember from their graduation speakers. You know what most people remember? Nothing! Zilch! Nada!
So knowing this, I realized, I can say anything I want! Although, I’m sure someone will post this on YouTube. But seriously, as I got feedback from around the world and wracked my brain about what to say, one theme began to emerge.
On your day of such great accomplishment, I’d like to talk about something we rarely celebrate: failure. And why we are counting on you to fail. Now bear with me, and you’ll see where I’m going.
We’re all products of failure. You don’t remember it, but your parents definitely do. From the first time you rolled over, to your first steps. These successes were a culmination of failures. Need further proof? Make sure to ask them over dinner to recount your potty training.
The funny thing is you can read all about me in the bio or my LinkedIn profile and you’ll see that I received my Ph.D in Applied Math from here 11 years ago. I’ve worked for the Department of Defense and been to Kazakhstan. But you won’t see all the failures that made up the journey. What you can’t see from my Facebook or LinkedIn page are what’s behind the most important moments of success all the failures.
While growing up in California, to simply say I was bad at Math would have been an understatement. My freshman year of high school, I was kicked out of my algebra class and had to spend the summer retaking it. This (unfortunately) would become my regular paradigm for the next few years. By the time high school graduation came around, two things happened to me.
First, I almost didn’t graduate. For the record, I did actually graduate, but it was only because a very kind administrator took pity on me and changed my failing grade in chemistry to a passing one.
Second, I got a girlfriend. Since I didn’t get into any of the colleges I liked, I opted to go to the local Junior College with her. Do you remember that moment when you first got here and tried to figure out what classes you’re supposed to take? Well, I had a winning strategy. I enrolled in all the same classes my she was taking.
One problem, the first class was Calculus. Wow, did I get my ass kicked that first day. It was then I realized that I wasn’t just stupid; I was really stupid.
As I looked around at everyone else nodding along with the instructor (including my girlfriend), it dawned on me, I hadn’t failed because of the teachers or the material. No, I failed because I didn’t try. I didn’t even put my self in a position to fail.
I was fundamentally afraid of being uncomfortable and having to address the failure that comes with it.
To me it was like when you get to the top of the high dive, walk out the edge, looking down that the clear blue water (you can even see the dark lines at the bottom of the pool) everyone telling you to jump, and then running back down the steps. I couldn’t commit.
So what did I do about my Calculus class? I committed. Instead of dropping out (my usual method), I went straight to the local library and checked out all the high school math books I could find. I then spent the next week going through them. And it was awesome. Suddenly I was failing at a problem, figuring out what I did wrong, and then course correcting. This feeling of being able to iterate was very new to me.
Now, five weeks later that same girlfriend asked me one afternoon why I was spending so much time on my math homework. It was then that I uttered the fateful words that I will never forget:
“I don’t know – It’s not like I’m going to become a math major or something”
Much to my great surprise, I ended up becoming a Math major. (Actually, I think my parents are still surprised). Then the same thing happened when I got here to the University of Maryland for my graduate work. I got my ass kicked by everyone, again. I failed my first graduate class and even got the 2 lowest score on my first Ph.D. qualifying exam. (The lowest score was actually by a guy who didn’t even show up.) I really, really wanted to quit, but that wouldn’t be the uncomfortable path.
So I stayed in the game by failing, getting back up, and continuing to push forward. It was probably one of the toughest and loneliest years of my life. The next time the qualifiers came around, however, I had the highest scores.
The big take away I have from this is that tenacity and failure go hand in hand. Without both, you can’t move forward.
Now it’s easy to say go forth and fail! But that’s not really that useful. What’s most important is how you fail. The best method is to fail fast. To help explain it, I want to tell you about one of my most recent experiences at a company called LinkedIn. Some of you may have gotten a few emails from us…
LinkedIn wasn’t the first social network in a very competitive space nor did we know exactly where we were going. It was an extremely tough fight. What allowed us to succeed was our mantra of failing fast in order to survive. We would build products quickly, test them out, many of them failing, then learning about went wrong, and then trying again. In fact, if you looked at all the projects, code, design, and people’s time that was invested into building the company most people would be shocked by how much didn’t work.
As my good friend Reid Hoffman, one of the founders of LinkedIn, says: Entrepreneurship is jumping off a cliff and assembling a plane on the way down.
I think that’s a great analogy. First because it’s a statement that you have to fully commit by throwing yourself at the problem. Second, to build that plane in time, you have to be comfortable failing, learning and repeating the cycle until you accomplish your goal.
If there is one thing that you take away today, remember this – fail quickly, don’t fail slow. I know it can sound a bit contrarian or even conflicting, but your goal is to move from a path of eventual failure to a path of success through iteration.
For the cliché, but very necessary sports analogy – you are aiming for a home-run by taking as many chances at bat as you can.
It’s essential you take risks, just make sure you have put yourself in a position to fail quickly. Failing slow is painful for you and painful for your loved ones to watch. It’s like watching your best friend being in a relationship that is clearly doomed, but they just won’t listen.
So what’s the world’s advice (remember I cheated) on how to achieve success though failure?
First and foremost, find your passion and work on what you love. There is a good chance many of you don’t know what your passion is yet. (That’s okay, after all, it too me over a decade to find out math is my passion). In fact, if you analyze LinkedIn’s data, the trends show that your generation will change jobs more times than any previous generation. That’s great in my opinion! You should try lots of things out. Why? Once you find your passion, you’ll never give up, take no for an answer, or have the patience for those that stand in your way. You’ll become an entrepreneur in your own right, by making your passion a reality.
Now before we go on, we need to clear up something on entrepreneurship. Some people think entrepreneurship means going off and doing a startup. I think those are people who have either watched The Social Network one too many times or are following Facebook’s stock price a little too closely.
My definition of entrepreneurship is “finding what you believe in, and creating something meaningful by failing at it over and over again until you eventually figure out how to make it a reality.”
When a few of us had the idea to build the first digital library in Iraq, it wasn’t because we wanted to profit at it or to have an IPO, it was because there was a need. People were 30 years out of date (to put that in context, 30 years is just when the computer mouse was becoming a reality). And to figure out how to make it work, we had to try a massive number of things (most that didn’t work). But it became our passion and we refused to accept defeat. Today that digital library is one of the cornerstones of the Iraqi education system.
Secondly, surround yourself with people you value and those who value you. Just like your body responds poorly to junk food (ok maybe in 10 years when it responds poorly to junk food), your mind and energy levels also respond to the company you keep. Keep the company of those that inspire you to do better, the people that aren’t afraid to tell you the unvarnished truth. It will hurt to hear, but it will allow you to iterate faster. Embrace those that will pick you up when you are down, because they will become your greatest allies in life.
Thirdly, experience other people’s lives and continue to share your own. You’ve already done this. I remember many late nights cutting across the Chapel on the way to Wawa being in deep conversations with people who would become my closest friends and trusted advisors. You all know what I’m talking about. As you went through this journey, you opened up to each other. You shared your dreams, passions, heartaches and failures with those around you. Don’t let that go away. That’s where you learned about the human condition and what it means to have true relationships. The virtual ones will keep you in contact, but they don’t mean anything unless you have a common foundation of shared experiences.
Lastly, strive to regularly put yourself in uncomfortable situations.
The world is changing as we speak. Right now there are two people in a garage with a dog (don’t ask me why there is a dog, but there always seems to be one) creating the next iPhone, Facebook, Google. Those of you that are graduating today with your undergraduate degrees, you are the first generation to go through your entire social years (puberty onwards) with Facebook. During your entire educational experience you’ve had access to Google, mobile phones, and the Internet. And yet already during your time in college you have seen the introduction of the tablet. The notion of using a desktop or a laptop is already outdated to any preschooler. Given this rapid pace of change, the only advice that I can give you to stay on top of the curve is to keeplearning. This means putting yourself in uncomfortable situations where you fail and subsequently teaching yourself new skills as a result.
Why is this so important?
Class of 2012, you are all about to embark on your next great journey. While many of you will travel far and wide, we are all counting on you to fail fast. While our society is moving forward faster than ever before, we are also facing a world with massive challenges.
- Our health care system is going through a great debate.
- Clean water is rapidly becoming a luxury.
- We know the importance of education, but the majority of the world is restricted from it.
- The capital and human costs associated with keeping our nation safe continues to rise
- And, we have a disparity in the rights, both moral and physical, for all humans both here and abroad.
The solutions to these problems won’t come from just having debates, relying on technology, or even worse, pushing the inevitable on to the next generation. The resolutions to our challenges will come through the process of trying, failing quickly, and then trying again with increased resolve.
Finally, a graduation speech wouldn’t be complete without this most critical advice. Wear sunscreen. Yes, it’s the advice that is given over and over, but there is truth in it. If you’re stuck in bed with a cold, or a bad back, the world won’t stop and wait for you. In fact, many of the best leaders I know, take religious care of their bodies. The race is long and your body has to last for it.
There you have it – my advice to you. We love to say things like “Failure is not an option”. But believe me, the most important thing the University of Maryland taught me is, “Failure, is our only option.”
So if you can only remember one thing from this speech; remember: Every failure is an opportunity to succeed. Fail fast, don’t fail slow.
Class of 2012 – this shared experience at college will always bind you together, and on this fantastic day remember that your success will be determined by how rapidly you learn from you failures.
Congratulations class of 2012, I wish you a future of fast failures! May you go forth and fail so that we can all succeed!
