Can blockchain exist without cryptocurrency

Bitcoin has been controversial since its beginning in , as have the subsequent cryptocurrencies that followed in its wake. While widely criticised for its volatility, its use in nefarious transactions and for the exorbitant use of electricity to mine it, Bitcoin is being seen by some, particularly in the developing world, as a safe harbour during economic storms. But as more people turn to cryptos as either an investment or a lifeline, these issues have manifested in an array of restrictions on their usage. The legal status of Bitcoin and other altcoins alternative coins to Bitcoin varies substantially from country to country, while in some, the relationship remains to be properly defined or is constantly changing.

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Content:

• What's the difference between blockchain and Bitcoin?
• History of blockchain
• How Bitcoin's vast energy use could burst its bubble
• Webinar: High-Performance Digitizer Basics
• Can NFTs happen in a crypto-less China? Amazingly, yes.
• Smart Indulgence
• View: A digital rupee and cryptocurrencies can (and should) co-exist
• Who Controls the Blockchain?

WATCH RELATED VIDEO: Does cryptocurrency have an intrinsic value? Can blockchain exist without cryptocurrency?

What's the difference between blockchain and Bitcoin?

IEEE websites place cookies on your device to give you the best user experience. By using our websites, you agree to the placement of these cookies. To learn more, read our Privacy Policy. To most of the world, Joseph Lubin is a leading thinker in the ever-expanding realm of digital currencies.

To me, he was the counterparty in my first Bitcoin exchange and a man with a knack for saying the biggest things in the most level and unassuming of tones. It was winter of when he beckoned me to a Bitcoin conference in Miami to tell me about a new project, named Ethereum , that he and a group of like-minded Canadians had begun working on just a few months earlier. Then the list kept growing.

Online movie distribution houses like Netflix and Hulu. Gaming platforms like Xbox and Sega Genesis. Messaging services like Twitter. Add to that retirement plans, currency exchanges, voting, intellectual-property managers, and trust-fund disbursers. According to Lubin, everything—really everything—we do on the Internet or via any kind of digital channel is about to undergo a radical change.

The idea he described to me is one that has since gotten a lot of attention from digital-currency enthusiasts. It is the theory that the same technology that secures transactions on the Bitcoin network—and thereby renders them transparent, nearly instantaneous, censorship-resistant, and free of the need to trust anybody—can be used to process other, more complex financial negotiations and to securely store any kind of digital information on the Internet.

Over the past year, this theory has been playing out in a very splintered, disorganized fashion. Among the applications that already exist are a distributed domain-name registry, a digital notary that requires no third-party verification, and services that manage financial contracts through decentralized escrow accounts. Some of these experiments are taking place on the Bitcoin network.

Other projects, like Ethereum, have started as entirely new networks or are now piggybacking on some of the so-called altcoins —clones and the near kin of Bitcoin. Many of the ventures are now backed by substantial investments. At meet-ups and more formal gatherings, there is a palpable feeling that the possibilities are endless and that money is only the first, and perhaps the most boring, application enabled by Bitcoin technology. That is to say, all of the data we create online and all of the operations we execute are handled for us by centralized servers, most of which sit in massive data centers operated by corporations and government institutions.

We depend on these servers for everything. They store our e-mail for us. They send our e-mail for us. They verify our identities for websites and smartphone apps. They track our shopping carts and process our payments. Nick Szabo —whose theories on digital contracts and smart property have earned him so much respect among digital-currency devotees that he is routinely accused of having created Bitcoin—sums up the problem in a blog post :.

Practically all of these machines have architectures that were designed to be controlled by a single person or a hierarchy of people who know and trust each other For a long time, it has felt like this is just the way it has to be.

If our digital world can be reduced to a bunch of records that we update and move from place to place, then, of course, protecting those records from corruption is of vital importance. The traditional solution, in both the physical and digital worlds, is to restrict access to a group of people whom you trust. In most cases, we trust Internet services because we assume that they possess the same priorities as we do or that we have the ability to hold them accountable for their transgressions.

More and more, it seems, the priorities of these institutions do not align with those of the people they serve.

Remember when Facebook toggled the digital levers in its social network to run massive psychology experiments on its users? Because, really, the only thing sillier than trusting some central authority with our most precious digital records would be trusting a bunch of strangers with them. And yet, this is precisely what Bitcoin achieves: a public database that everyone can see, anyone can add to, and no one can destroy.

Why trust Bitcoin, or more specifically, why trust the technology that makes Bitcoin possible? To understand how, you need to unpack what Bitcoin really is. A digital signature is a kind of cryptographic puzzle that only you can solve, because only you hold the corresponding half. When you want to spend your bitcoins, you make a request to have a new record added to the blockchain.

When that owner wants to spend them, he repeats the process. So the blockchain is nothing more than a long string of transactions, each of which refers to an earlier record in the chain. But Bitcoin users do not directly make the updates to the blockchain. In order to transfer coins to someone else, you have to create a request and broadcast it over the Bitcoin peer-to-peer network. They scoop up the requests and do a few checks to make sure that the signature is correct and that there are enough bitcoins to make the transaction; then they bundle the new records into a block and add it to the end of the blockchain.

Illustration: Mark Montgomery. All miners work independently on their own version of the blockchain. When they finish a new block, they broadcast it to the rest of their peers, who check it, accept it, add it to the end of the chain, and pick up their work from this new starting point.

The arrangement will work only if the miners agree on what the most recent version of the blockchain should look like. In other words, they all have to agree on a consensus version of it.

However, he says, these systems were successful only when the participants shared a common allegiance. Bitcoin replaces that allegiance with mathematical confidence. Given the cryptographic proof required to commit a transaction, we can already be confident that only people who own bitcoins can spend them. But a bitcoin miner can also be confident that the other miners are not changing entries on the blockchain, because in Bitcoin there is no going backward.

Anyone who participates is required to devote large quantities of computing power—and therefore, electricity—toward running the new data through a set of calculations called hash functions.

Only once this work is completed can the block be appended to the chain in a way that satisfies other miners on the network. And you agree to something else and put another thousand bricks on top of it.

And that makes it very, very, very difficult for someone to change a brick way down at the bottom of the wall. Meanwhile, the whole community of miners is already trying to solve block In order to get my change accepted by the network, I would have to serve up my own alternate version of the complete blockchain.

I would have to revert back to block , tamper with the entry I cared about, and perform the necessary calculations on it. Because all subsequent hashes are dependent on the data that I changed, I would also have to repeat the work on every following block, through to block But I am only a single miner with a fraction of the computing power wielded by the network as a whole, so I can never catch up.

The hash rate of all the computers hooked into the Bitcoin network doubled between August and March ,and the numbers continue to climb. Some of these mining rigs are enormous beasts consuming kilowatts and requiring cooling with new ly engineered fluids. A Nakamoto blockchain, then, becomes more secure as more people participate in the network. But why would they? Every time a block gets solved, a virgin transaction is created with a handful of newly minted bitcoins signed over to the first miner who completed the work.

In old security models, you tried to lock out all of the greedy, dishonest people. Bitcoin, on the other hand, welcomes everyone, fully expecting them to act in their own self-interest, and then it uses their greed to secure the network. The incentive system leads a lot of people to contribute resources toward the welfare of the system. When a Nakamoto blockchain is used to store a record of value, we know what we get. And when Nakamoto first put Bitcoin online in , the blockchain was nothing more than a string of transactions.

Last year, after much debate in the community, the developers who steward the Bitcoin protocol which is open source added a new feature that allows users to tack 40 bytes of metadata onto every transaction.

The Bitcoin blockchain is now littered with all kinds of nonfinancial messages. All of these live in the blockchain, embedded into transactions. Once metadata gets incorporated into a Nakamoto blockchain, it enjoys all the benefits of the peer-to-peer network that curates it. The entries are accessible to anyone on earth who has a computer and an Internet connection. In order to destroy them, you would have to access every computer on the network and someday, perhaps, even a constellation of satellites.

They are impossible to change, and thus impossible to censor. And they carry with them both a time stamp and cryptographic proof of who created them. So what can you do with a Nakamoto blockchain? The most simple applications, the ones we are likely to see in the near future, will make use of them as basic storage systems that take advantage of the unique properties of the network.

People who are interested in transparency and access are looking at the blockchain as a possible place to organize government records and to include the public in the legislative process, by giving people a forum for publishing, debating, and voting on new proposals.

Because the blockchain gives each entry a rough time stamp, it can also be used as a decentralized notary. Imagine, for example, taking a picture of a dent in your rental car and loading it into a Bitcoin transaction. By looking at what block the transaction went into, you could later prove that the dent existed before you left the parking lot. Because Bitcoin transactions are secured by strong cryptography, the blockchain can also replace our standard user name—and—password strategy for identity verification.

In such a system, a Bitcoin address could be tagged with a user name, while the private key would stand in as a password. Anyone could then ask you to prove your identity by using your private key to solve the same cryptographic puzzle that you would normally solve when making a Bitcoin transaction. Nakamoto blockchains also solve the problem of censorship. Once inserted into the chain, metadata cannot be removed. Developers have used this crucial feature to build a new censorship-resistant version of Twitter called Twister , and a decentralized domain-name registry Namecoin.

An insurance company is just a big stack of records. An economy is basically just a big stack of records. So far, these are all examples of ways that a Nakamoto blockchain could be used to change how we store data on the Internet. But storage is the very tip of the iceberg.

After all, Bitcoin is not just a transaction ledger. It also brings with it a global army of miners who together function as a distributed virtual machine.

History of blockchain

Home » Guides » Blockchain Nick Darlington. Or one where you store money in an online wallet not tied to a bank, meaning you are your own bank and have complete control over your money. This is not a world of the future; it is a world that an avid but growing number of early adopters live in right now.

How Bitcoin's vast energy use could burst its bubble

These are the core obsessions that drive our newsroom—defining topics of seismic importance to the global economy. Our emails are made to shine in your inbox, with something fresh every morning, afternoon, and weekend. Cryptocurrency is a notorious climate culprit. In terms of greenhouse gas emissions, according to a Mar. So a small but growing number of companies are looking at ways to clean the Bitcoin market up. The latest stab at green Bitcoin comes from Norway. On Mar. The plan, in other words, is to situate Bitcoin mining centers in places where renewable energy farms overproduce electricity during times of low demand, and soak up that excess power for mining. The mine gets low-cost, zero-carbon power; the wind or solar farm gets a reliable big customer. This approach has a fatal flaw, said Alex de Vries, a digital currency economist who authored the Joule article.

Webinar: High-Performance Digitizer Basics

I recently attended an industry seminar where the concept of the Blockchain was explained. At the end of the session, walking out of the lecture room I heard one of the attendees say to a colleague "I'm still not sure what exactly Blockchain is Many of us know that Blockchain is a topic that is hot at the moment. It's a topic that is disruptive. It's a topic that is accelerating.

Can NFTs happen in a crypto-less China? Amazingly, yes.

Blockchain is the technology that underpins the cryptocurrency Bitcoin, but Bitcoin is not the only version of a blockchain distributed ledger system in the market. There are several other cryptocurrencies with their own blockchain and distributed ledger architectures. Meanwhile, the decentralisation of the technology has also led to several schisms or forks within the Bitcoin network, creating offshoots of the ledger where some miners use a blockchain with one set of rules, and others use a blockchain with another set of rules. With smaller networks, these cryptocurrency blockchains are more vulnerable to hacking attacks , one of which befell Bitcoin Gold in Understand how Facebook leveraged specific aspects of blockchain technology to launch a new cyrptocurrency called Libra, and its potential impact on the banking and finance sector.

Smart Indulgence

Dit artikel is ook beschikbaar in het Nederlands. May 11, , by Wim Boonstra. In recent months the price of Bitcoin has risen sharply on balance, despite some fluctuations. Pressing questions are coming up. Is Bitcoin money or not? Why is Bitcoin valuable? And what does the future hold?

View: A digital rupee and cryptocurrencies can (and should) co-exist

Because it enables peer-to-peer payments without a third party like a bank, it has set off a tidal wave of other cryptocurrencies and digital assets making use of blockchain technology. Blockchain is a digital public ledger where information on each transaction receives a unique "hash" or identity and is added to the end of the ledger. Bitcoin's success has put blockchain on the map and put its potential to decentralize and improve the digital economy on a path to disrupting the status quo. First things first: know the difference between a coin and a token.

Who Controls the Blockchain?

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We are at a unique moment in history: our society is in transition from an industrial economy to one defined by a new set of technologies, ranging from digitalization to nanotechnology. Among the latest waves of digitalization is blockchain—a technology that many say promises to redefine trust, transparency and inclusion across the world. Blockchain, however, is a relatively immature technology and can create as many problems as it solves. What it has offered so far is a series of key insights into emerging technologies and how we can approach them in a rapidly changing world. We are now in a liminal period for digital technologies.

A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin , for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party. One key difference between a typical database and a blockchain is how the data is structured.

Read time: 5 mins. However, the technology has become far more widespread in recent years, and is now impacting a vast range of industries. Increasingly, business leaders and other professionals are incorporating the technology and its applications into their strategies. Blockchain technology can be viewed as a collection of components or layers.