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Bitcoin

BigSon and I went to recent Hackathon at the University of Bedfordshire. It was a well organised event to showcase the new IBM LinuxOne which is a blockchain computational platform. We came away from that event enthused about the idea of blockchains and the most famous application to date, Bitcoin. Below is his write up on the cryptocurrency after reading Mastering Bitcoin by .

What is Bitcoin

Bitcoin is a digital currency that is decentralised (no governing body) that is built upon the blockchain and uses a proof of work system called mining. Bitcoin can be used to buy anything from anyone that has a Bitcoin wallet and address. There is a set number of Bitcoins that will ever be in circulation (about 21 million) that is embedded in the software so it can never be exceeded.

History of Bitcoin

The idea for Bitcoin came from an unknown person by the name of Satoshi Nakamoto (not real name). He posted the idea on a popular digital currency blog. It was launched in 2009 and became very popular partly thanks to the bank crisis. The largest Bitcoin transaction ever was worth 150 million dollars.

Getting Started

To get a Bitcoin wallet you must download an application from the Bitcoin website and install it. There are different Bitcoin wallets, the main ones are phone and desktop wallet. Phone wallets are for small transactions and do not contain the full blockchain and for purchases using small amounts of money. Desktop wallets usually contain the full blockchain and can process small and large payments. They are safer to use. To get your first Bitcoin you can get some from a friend or buy some from a Bitcoin coin seller.

Bitcoin Transactions

Bitcoin transactions are made through the internet on a peer-to-peer system, which means that there are no middle men. The payment is made to the address of the receiver. After the payment is made it is put in unconfirmed transaction pool. The privacy of both participants is kept by encrypting their address and keys. The smallest possible payment is 1 Satoshi (1 millionth of a Bitcoin). It is impossible to get a smaller transaction because it is the smallest Bitcoin unit.

Bitcoin Mining

Bitcoin mining is an essential part of Bitcoin; it is a way of verifying transactions by putting them in blocks and then into the blockchain. To mine Bitcoin you need a powerful mining computing device like ASICS. The device first groups all the transactions possible into the new candidate block. The first transaction it puts in is the miner’s reward which is about 12.5 Bitcoin in 2016. It will then put in the most important transactions determined by how old and how much is the transaction. After it has made the candidate block it must find a hash that is lower than the target, the set of numbers that identifies the block. If it finds the right hash it will post the block to the network and all the nodes (wallets) will verify it and it will become a valid block. After it is verified the nodes will add it to their blockchain, if it is invalid it will be rejected and the network will wait for a valid block to arrive.

Bitcoin Blocks

Bitcoin blocks contain a list of transactions that were processed through the network. Once the transaction has been made the money is sent to the receiver but it is not confirmed. It is confirmed when the transaction is put in a block that is then verified. For large transactions, it is advised to wait for at least 6 blocks to be confirmed before considering your transaction valid. For very large transactions you should wait at least a day before considering it valid.

Blockchain

The blockchain is a public ledger in Bitcoin that keeps all the transactions ever made. The transactions are kept in blocks that are kept in chronological order. The blockchain goes back all the way to the first ever Bitcoin transaction, the Genesis block created by Satoshi Nakamoto. Inside the Genesis block there are no transactions but an encrypted message from Satoshi Nakamoto “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. Satoshi Nakamoto put this text in the place of the transactions that usually contains the miners reward. Blockchain is not unique to Bitcoin, it is used in other currencies and applications.

Bitcoin security

Security in Bitcoin is kept by encrypting the user keys and addresses. Security is also kept because there is no central bank or government at the centre keeping all the users’ money.  A government or bank is a point of failure because all the money is in one place which makes it easy to steal. With Bitcoin, the user’s Bitcoins are kept in their wallet with a public ledger of all the transactions ever made. This makes it harder for hackers to steal the money, because they would need to hack individual accounts which is not always fruitful. The way a user keeps the keys to their account is by keeping them in cold storage (see below) or online hardware wallets, data files. Hardware wallets are tamper proof and are a relatively safe way of keeping your Bitcoins and keys. Data files are not the best way to keep Bitcoin keys because they can be lost in computer crashes and full reboots and never be recovered. Cold storage is keeping your encrypted Bitcoin keys on pieces of paper in a safe or hidden place. Cold storage is one of the safest ways of keeping your Bitcoin keys.

There are two different types of Bitcoin keys: private keys and public keys. Private keys are kept in cold storage and are only kept by the wallet owner. Private keys are usually encrypted for safety and then put on cold storage. Public keys are derived from the encrypted versions of private keys. The public key is generated by encrypting the encrypted private key again. The public key is what is visible to all users of Bitcoin and is what the money is sent to.

Because we are newbies to this technologies and are willing to learn as much as we can about it, we are happy to take comments on what is written above. We welcome corrections and also questions which will guide our learning.

Thanks for reading and again, feel free to comment.

The Craftsman’s Dinner

This is a beautiful series of five short films based on the crafts surrounding food.

Don’t know which is my favourite, they are all so good.

The farm with the free range animals and what the owners are trying to achieve is admirable. The knife maker is just amazing. The potter makes us want to go to London to find that shop. The salmon smoker had us going to his site to  place an order. The winery gave us another choice for an accompaniment for dinner.

Hope you enjoy.

The Mito Principle

In my early years I was a car guy. I subscribed to Road and Track and every month I will get the magazine with the news and views of the latest cars. That publication had terrific writers and besides the cars to ogle at, the reading was always a delight.IMG_7688
At that time, like most, I dreamt of owning the latest cars and my dreams will be updated each and every month. My favourites back then were the Cizeta Moroder, Ferrari Testarossa and the Porsche 959. All stratospherically priced vehicles. If wishes were horses, I would have ridden.
As the years passed, my philosophy on owning things started to change. It became less of idealising objects and more of a sense of enjoying the beauty and utility of them. I expect if I can easily afford something, I am happy to own it, if possible. Still now I check the number of things I acquire because I am losing patience with being surrounded by stuff.
A couple years ago, at my first job away from home, I was prompted to get a second car to avoid having the family running up and down the motorway to drop me off on weekends. A buddy at work wanted to trade in a Saab Aero for a Land Rover so I ended up with a two litre turbo that ran like a thief. I enjoyed the long commute home on the big roads, swiping through the long bends and feeling the taught suspension balancing the car through the curves.
I changed jobs and then worked on the other side of London, the busy side, close to Heathrow Airport. There the quick acceleration worked against me on one particular evening when I got two speeding tickets from the Variable Speed cameras. I was nothing short of furious.
Those cameras have been hell in driving along that road, you have to keep your eye on the speed notices all the time toIMG_7693 avoid a loud PAX! That evening I lapsed and while under no danger, I was ticketed, twice
The Saab was already ten years old and starting to demand expensive repairs so I decided to get rid of it and set a new criteria for a replacement.
The new car must be under the tax band, slow to accelerate and cheap to run. With my parameters set, I started my search. I got a good price for the Saab and that served as a downpayment for the next car.
I found an Alfa Romeo Mito for sale that matched all that I wanted in a car. It was less than a litre in engine size and had many modern comforts that the Saab lacked. I got it for a song because the owner was pressed to migrate and to my surprise the car drove beautifully. It is a joy in the lanes! I took it through the Chilterns one weekend soon after I got it and it was one of the best country drives I ever had. The car is nimble and enjoys being thrown into corners where it just sticks to the line you carve from the steering wheel. Fun, fun, fun!
There is no doubt it is slow. You do get a quick take off from a standing start and that is exciting at traffic lights but by the time you hit 30mph, you are chugging along. It is very hard to break a speed limit in this car. Just what I wanted.IMG_7694
Recently the notice came for me to renew the road tax. I immediately got online and the process was one of clicking three buttons in quick succession without any exchange of money. Super!
Then there was the renewal of the insurance; which at £300 for the year makes me feel like the cat that got the cream.
I am somewhat smug about this entire episode but in standing aside, I will like to take from it some principles that might help me in other areas.
First was, I made a list of what attributes I was looking for. At that point it did not matter what make or model, just what qualities were important to me.
I then looked for a vehicle that was the closest match to that list. When the ad for the car came up, I already knew it was the one I wanted. I was able to move swiftly, without much hesitation and acquire it.
Those two points seem to form an approach I can expend in other circumstances. First decide on the qualities you want to work with and secondly when you find them, move promptly and confidently.