Blockchain and Cryptocurrency
It is a common belief that the bankruptcy filed by Lehman Brothers, a Wall Street banking giant, on September 15, 2008, triggered the global financial crisis in 2008-2009. Excessive risk exposure to the subprime mortgage and financial derivative markets by large banks almost brought down the global financial system. The crisis was the ultimate consequence of a fundamental breakdown of trust in the relationship between customers and the financial institutions that should have been serving them.
Shortly after that, Satoshi Nakamoto, a mysterious and anonymous entity, published a whitepaper on October 31, 2008, called Bitcoin: A Peer-to-Peer Electronic Cash System, which is considered the origin of Bitcoin and all cryptocurrencies. Satoshi proposed a completely decentralized approach for Peer-to-Peer (P2P) payment without central banks or intermediaries. He outlined the principles and functions of what would be developed and introduced as Bitcoin in the following year.
The central technology behind his invention is referred to as blockchain and has since evolved well beyond Bitcoin and digital payment. It is now a suite of technologies, forming the foundation of distributed ledgers and cryptocurrency. No one knows who or where Satoshi is, whether it is one individual or a group, but the whitepaper has profoundly changed money, digital and cryptocurrencies, business, and the world. You can learn more about the Bitcoin whitepaper authorship debate at https://www.judiciary.uk/wp-content/uploads/2022/08/Wright-v-McCormack-Judgment.pdf.
The purpose of this book is to help you to understand blockchain technologies, introduce you to the tools and technologies of the Ethereum ecosystem, and get you started with developing smart contracts and end-to-end decentralized applications.
In this chapter, we will start with basic concepts in Bitcoin, Ethereum, cryptocurrency, and blockchain.
In this chapter, we will cover the following topics:
- Introducing blockchain technology
- Rehashing cryptography
- Anatomizing the blockchain consensus mechanism
- Understanding Bitcoin and cryptocurrency
- Overview blockchain use cases in the industry and government
- Ushering in the world of Ethereum