The future will be increasingly distributed. As the publicity surrounding Bitcoin and blockchain has shown, distributed technology and business models are gaining popularity. Yet the disruptive potential of this technology is often obscured by hype and misconception. This detailed guide distills the complex, fast moving ideas behind blockchain into an easily digestible reference manual, showing what's really going on under the hood.
Finance and technology pros will learn how a blockchain works as they explore the evolution and current state of the technology, including the functions of cryptocurrencies and smart contracts. This book is for anyone evaluating whether to invest time in the cryptocurrency and blockchain industry. Go beyond buzzwords and see what the technology really has to offer.
• Learn why Bitcoin was fundamentally important in blockchain's birth
• Learn how Ethereum has created a fertile ground for new innovations like Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs) and Flash Loans
• Discover the secrets behind cryptocurrency prices and different forces that affect the highly volatile cryptocurrency markets
• Learn how cryptocurrencies are used by criminals to carry out nefarious activities
• Discover how enterprise and governments are leveraging the blockchain including Facebook
• Understand the challenges of scaling and forking a blockchain
• Learn how different blockchains work
• Learn the language of blockchain as industry terms are explained
Author(s): Lorne Lantz, Daniel Cawrey
Edition: 1
Publisher: O'Reilly Media
Year: 2020
Language: English
Commentary: Vector PDF
Pages: 284
City: Sebastopol, CA
Tags: Security; Law; Blockchain; Transactions; Consensus; Finance; Cryptocurrency; Ethereum; Smart Contracts; Distributed Applications; Bitcoin; Hashing; Stakeholders; Banking; Money Laundering
Cover
Copyright
Table of Contents
Preface
Conventions Used in This Book
Using Code Examples
O’Reilly Online Learning
How to Contact Us
Acknowledgments
Chapter 1. Origins of Blockchain Technology
Electronic Systems and Trust
Distributed Versus Centralized Versus Decentralized
Bitcoin Predecessors
DigiCash
E-Gold
Hashcash
B-Money
Bit Gold
The Bitcoin Experiment
The 2008 Financial Crisis
The Whitepaper
Introducing the Timestamp Server
Storing Data in a Chain of Blocks
Bringing Bitcoin to Life
Compelling Components
Achieving Consensus
An Early Vulnerability
Adoption
Summary
Chapter 2. Cryptocurrency Fundamentals
Public and Private Keys in Cryptocurrency Systems
The UTXO Model
Transactions
The Merkle Root
Signing and Validating Transactions
The Coinbase Transaction
Bitcoin Transaction Security
Hashes
Block Hashes
Custody: Who Holds the Keys
Wallet Types: Custodial Versus Noncustodial
Wallet Type Variations
Security Fundamentals
Recovery Seed
Mining
Mining Is About Incentives
Block Generation
Consensus
Proof-of-Work
Proof-of-Stake
Other Concepts for Consensus
Stakeholders
Brokerages
Exchanges
Custody
Analytics
Information
Summary
Chapter 3. Forks and Altchains
Bitcoin Improvement Proposals
Understanding Forks
Contentious Hard Forks
The Bitcoin Cash Fork
Altcoins
Litecoin
More Altcoin Experiments
“2.0” Chains
NXT
Counterparty
Privacy-Focused Cryptocurrencies
Dash
Monero
Zcash
Ripple and Stellar
Ripple
Stellar
Scaling Blockchains
SegWit
Lightning
Other Altchain Solutions
The Ethereum Classic Fork
Summary
Chapter 4. The Evolution to Ethereum
Improving Bitcoin’s Limited Functionality
Colored Coins and Tokens
Mastercoin and Smart Contracts
Understanding Omni Layer
Ethereum: Taking Mastercoin to the Next Level
Ether and Gas
Use Cases: ICOs
Decentralized Autonomous Organizations
Key Organizations in the Ethereum Ecosystem
Decentralized Applications (Dapps)
Use Cases
Challenges in Developing Dapps
Deploying and Executing Smart Contracts in Ethereum
The Ethereum Virtual Machine
Gas and Pricing
Interacting with Code
Summary
Chapter 5. Tokenize Everything
Tokens on the Ethereum Platform
Fungible and Nonfungible Tokens
Is a Token Necessary?
Airdrops
Different Token Types
Understanding Ethereum Requests for Comment
ERC-20
ERC-721
ERC-777
ERC-1155
Multisignature Contracts
Decentralized Exchange Contracts
Summary
Chapter 6. Market Infrastructure
Evolution of the Price of Bitcoin
The Role of Exchanges
Order Books
Slippage
Depth Charts
Jurisdiction
Wash Trading
Whales
Derivatives
Cryptocurrency Market Structure
Arbitrage
Counterparty Risk
Market Data
Analysis
Fundamental Cryptocurrency Analysis
Technical Cryptocurrency Analysis
Arbitrage Trading
Timing and Managing Float
Float Configuration 1
Float Configuration 2
Float Configuration 3
Regulatory Challenges
Banking Risk
Exchange Risk
Basic Mistakes
Exchange APIs and Trading Bots
Open Source Trading Tech
Rate Limiting
REST Versus WebSocket
Testing in a Sandbox
Market Aggregators
Summary
Chapter 7. Decentralizing Finance and the Web
Redistribution of Trust
Identity and the Dangers of Hacking
Wallets
Private Keys
Naming Services
Decentralizing Finance
Important Definitions
Stablecoins
DeFi Services
Lending
Savings
Derivatives
Decentralized Exchanges
Decentralized Versus Centralized Exchanges
Flash Loans
Creating a Flash Loan Contract
Deploying the Contract
Executing a Flash Loan
Flash Loans for Arbitrage
The Fulcrum Exploit
Privacy
Zero-Knowledge Proof
Zcash
Ring Signatures
Web 3.0
Summary
Chapter 8. Catch Me If You Can
The Evolution of Crypto Laundering
FinCEN Guidance and the Beginning of Regulation
The FATF and the Travel Rule
Skirting the Laws
Avoiding Scrutiny: Regulatory Arbitrage
Malta
Singapore
Hong Kong
Bahamas
Crypto-Based Stablecoins
NuBits
Digix
Basis
Tether
Initial Coin Offerings
Founder Intentions
Token Economics
Whitepaper
Exchange Hacks
Mt. Gox
Bitfinex
Coincheck
NiceHash
Other Hacks
Bloomberg TV BTC Stolen
EtherDelta Redirection
CryptoLocker and Ransomware
SIM Swapping
Summary
Chapter 9. Other Blockchains
What Are Blockchains Good For?
Databases and Ledgers
Decentralization Versus Centralization
Participants
Key Properties of Distributed Verifiable Ledgers
Ethereum-Based Privacy Implementations
Nightfall
Quorum
Enterprise Implementations
Hyperledger
Corda
DAML
Blockchain as a Service
Banking
The Royal Mint
Banque de France
China
US Federal Reserve
JPMorgan
Permissioned Ledger Uses
IT
Banking
Central Bank Digital Currencies
Legal
Gaming
Health Care
Internet of Things
Payments
Libra
The Libra Association
Borrowing from Existing Blockchains
Novi
How the Libra Protocol Works
Summary
Chapter 10. The Future of Blockchain
The More Things Change
Blockchains to Watch
How Monero Works
Mimblewimble, Beam, and Grin
The Scaling Problem
Sidechains
Sharding
STARKs
DAGs
Avalanche
Liquid
Lightning
Ethereum Scaling
Privacy
Interoperability
Tokenize Everything
Summary
Index
About the Authors
Colophon
