Bitcoin Explained for beginners.

Bitcoin, Explained for Beginners

A shady form of payment, a speculative bubble or the future of finance? Here’s how to make sense of the news around Bitcoin.

The value of Bitcoin broke all records in March 2021.

The spot price to buy a bitcoin — the world’s first and most popular digital currency — briefly rose above $60,000 on March 13, 2021. (For context, the cryptocurrency's all-time low is from 2013, when it was priced at $67.81.) With such a meteoric rise, many are wondering: What, exactly, is Bitcoin, and where does it get its value? Years from now, will we talk about the Bitcoin boom and bust periods as we do about the Gold Rush? Or, will it become a staple in a diversified investment portfolio and a common way to buy a pizza?

For the most part, the jury’s still out. But the past 10 years have given us a better indication of the role Bitcoin might play in the portfolios of retail investors and large institutions alike.

Definition: What is Bitcoin?

Bitcoin was launched in 2009 and is regarded as the first cryptocurrency. It’s a decentralized form of digital cash that eliminates the need for traditional intermediaries like banks and governments to make financial transactions. Still feeling a little confused? Don’t worry, that’s normal.

Fiat money (like the U.S. dollars in your bank account) is backed and regulated by the government that issues it. Bitcoin, on the other hand, is powered through a combination of peer-to-peer technology — a network of individuals, much like the volunteer editors who create Wikipedia — and software-driven cryptography, the science of passing secret information that can only be read by the sender and receiver. This creates a currency backed by code rather than items of physical value, like gold or silver, or by trust in central authorities like the U.S. dollar or Japanese yen.

“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party,” wrote Satoshi Nakamoto — the pseudonym of the mysterious Bitcoin creator, who remains unknown — in a white paper introducing the open-source technology. It’s come a long way since then, now accepted as payment by AT&T, the Dallas Mavericks and Wikipedia, among others.

How does Bitcoin work?

Each bitcoin (trading symbol “BTC,” though “XBT” is also used) is a computer file stored in a digital wallet on a computer or smartphone. To understand how the cryptocurrency works, it helps to understand these terms and a little context:

Blockchain: Bitcoin is powered by open-source code known as blockchain, which creates a shared public ledger. Each transaction is a “block” that is “chained” to the code, creating a permanent record of each transaction. Blockchain technology is at the heart of more than 6,000 cryptocurrencies that have followed in Bitcoin’s wake.

Private and public keys: A bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.

Bitcoin miners: Miners — or members of the peer-to-peer platform — then independently confirm the transaction using high-speed computers, typically within 10 to 20 minutes. Miners are paid in bitcoin for their efforts.

How does Bitcoin make money?

Bitcoin value follows the law of supply and demand — and because demand waxes and wanes, there’s a lot of volatility in the cryptocurrency’s price.

Besides mining bitcoin, which requires technical expertise and an investment in high-performance computers, most people purchase bitcoins as a form of currency speculation — betting that the U.S. dollar value of one bitcoin will be higher in the future than it is today. But that's difficult to predict.

Storing your bitcoins: Hot wallets vs. cold wallets

Bitcoins can be stored in two kinds of digital wallets:

Hot wallet: Digital currency is stored in the cloud on a trusted exchange or provider, and accessed through a computer browser, desktop or smartphone app.

Cold wallet: An encrypted portable device much like a thumb drive that allows you to download and carry your bitcoins.

Basically, a hot wallet is connected to the internet; a cold wallet is not. But you need a hot wallet to download bitcoins into a portable cold wallet.

Buying Bitcoin: The pros and cons

With a speculative asset class like bitcoin, it’s better to start with why you should be wary:

Bitcoin: The cons

Price volatility. The 2017 spike in Bitcoin’s price was driven by speculators rushing into the bitcoin market, as NerdWallet staff writers discussed at the time. The recent gains are good news if you bought Bitcoin in December 2018; those who bought in 2017 when Bitcoin’s price was racing toward $20,000 had to wait until December 2020 to recover their losses.

Hacking concerns. While backers say the blockchain technology behind bitcoin is even more secure than traditional electronic money transfers, bitcoin hot wallets have been an attractive target for hackers. There have been a number of high-profile hacks, such as the news in May 2019 that more than $40 million in bitcoin was stolen from several high-net-worth accounts on cryptocurrency exchange Binance (the company covered the losses).

Limited (but growing) use. In May 2019, telecommunications giant AT&T joined companies such as Overstock.com, Microsoft and Dish Network in accepting bitcoin payments. But these companies are the exception, not the rule.

Not protected by SIPC. The Securities Investor Protection Corporation insures investors up to $500,000 if a brokerage fails or funds are stolen, but that insurance doesn’t cover cryptocurrency.

Bitcoin: The pros

Private, secure transactions anytime — with fewer potential fees. Once you own bitcoins, you can transfer them anytime, anywhere, reducing the time and potential expense of any transaction. Transactions don’t contain personal information like a name or credit card number, which eliminates the risk of consumer information being stolen for fraudulent purchases or identity theft. (Keep in mind, though, that to purchase bitcoins on an exchange, generally you'll first need to link your bank account.)

The potential for big growth. Some investors who buy and hold the currency are betting that once Bitcoin matures, greater trust and more widespread use will follow, and therefore Bitcoin’s value will grow.

The ability to avoid traditional banks or government intermediaries. After the financial crisis and the Great Recession, some investors are eager to embrace an alternative, decentralized currency — one that is essentially outside the control of regular banks, governing authorities or other third parties. (However, to buy Bitcoin on an exchange with U.S. dollars, you'll likely need to link your bank account.)

Where can I buy Bitcoin?

There are four ways to get bitcoins:

Cryptocurrency exchanges. There are a number of exchanges in the U.S. and abroad. Coinbase is the largest cryptocurrency exchange in the U.S., trading more than 30 cryptocurrencies.

Investment brokerages. Robinhood was the first mainstream investment broker to offer Bitcoin and other cryptocurrencies (Robinhood Crypto is available in most, but not all, U.S. states). Tradestation, eToro and Sofi Active Investing also offering cryptocurrency trading in most U.S. states.

Bitcoin ATMs. There are more than 7,000 bitcoin ATMs in the U.S. (search Coin ATM Radar to find one near you).

Peer-to-peer purchases. True to its original spirit, you can buy bitcoins directly from other bitcoin owners through peer-to-peer tools like Bisq, Bitquick and LocalBitcoins.com.

Bitcoin mining. You can earn bitcoins through mining, but the technical expertise required and computer cost puts this option out of reach for most.

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A blockchain in 200 lines of code

The basic concept of blockchain is quite simple: a distributed database that maintains a continuously growing list of ordered records. However, it is easy to get mixed up as usually when we talk about blockchains we also talk about the problems we are trying to solve with them. This is the case in the popular blockchain-based projects such as Bitcoin and Ethereum . The term “blockchain” is usually strongly tied to concepts like transactions, smart contracts or cryptocurrencies.

This makes understanding blockchains a necessarily harder task, than it must be. Especially source-code-wisely. Here I will go through a super-simple blockchain I implemented in 200 lines of Javascript called NaiveChain.

Block structure

The first logical step is to decide the block structure. To keep things as simple as possible we include only the most necessary: index, timestamp, data, hash and previous hash.



class Block {
    constructor(index, previousHash, timestamp, data, hash) {
        this.index = index;
        this.previousHash = previousHash.toString();
        this.timestamp = timestamp;
        this.data = data;
        this.hash = hash.toString();
    }
}




Block hash

The block needs to be hashed to keep the integrity of the data. A SHA-256 is taken over the content of the block. It should be noted that this hash has nothing to do with “mining”, since there is no Proof Of Work problem to solve.


var calculateHash = (index, previousHash, timestamp, data) => {
    return CryptoJS.SHA256(index + previousHash + timestamp + data).toString();
};







Generating a block

To generate a block we must know the hash of the previous block and create the rest of the required content (= index, hash, data and timestamp). Block data is something that is provided by the end-user.






var generateNextBlock = (blockData) => {
    var previousBlock = getLatestBlock();
    var nextIndex = previousBlock.index + 1;
    var nextTimestamp = new Date().getTime() / 1000;
    var nextHash = calculateHash(nextIndex, previousBlock.hash, nextTimestamp, blockData);
    return new Block(nextIndex, previousBlock.hash, nextTimestamp, blockData, nextHash);
};


Storing the blocks

A in-memory Javascript array is used to store the blockchain. The first block of the blockchain is always a so-called “genesis-block”, which is hard coded.







var getGenesisBlock = () => {
    return new Block(0, "0", 1465154705, "my genesis block!!", "816534932c2b7154836da6afc367695e6337db8a921823784c14378abed4f7d7");
};

var blockchain = [getGenesisBlock()];


Validating the integrity of blocks

At any given time we must be able to validate if a block or a chain of blocks are valid in terms of integrity. This is true especially when we receive new blocks from other nodes and must decide whether to accept them or not.





var isValidNewBlock = (newBlock, previousBlock) => {
    if (previousBlock.index + 1 !== newBlock.index) {
        console.log('invalid index');
        return false;
    } else if (previousBlock.hash !== newBlock.previousHash) {
        console.log('invalid previoushash');
        return false;
    } else if (calculateHashForBlock(newBlock) !== newBlock.hash) {
        console.log('invalid hash: ' + calculateHashForBlock(newBlock) + ' ' + newBlock.hash);
        return false;
    }
    return true;
};


Choosing the longest chain

There should always be only one explicit set of blocks in the chain at a given time. In case of conflicts (e.g. two nodes both generate block number 72) we choose the chain that has the longest number of blocks.







var replaceChain = (newBlocks) => {
    if (isValidChain(newBlocks) && newBlocks.length > blockchain.length) {
        console.log('Received blockchain is valid. Replacing current blockchain with received blockchain');
        blockchain = newBlocks;
        broadcast(responseLatestMsg());
    } else {
        console.log('Received blockchain invalid');
    }
};


Communicating with other nodes

An essential part of a node is to share and sync the blockchain with other nodes. The following rules are used to keep the network in sync.

When a node generates a new block, it broadcasts it to the network
When a node connects to a new peer it querys for the latest block
When a node encounters a block that has an index larger than the current known block, it either adds the block the its current chain or querys for the full blockchain.





No automatic peer discovery is used. The location (=URLs) of peers must be manually added.

Controlling the node

The user must be able to control the node in some way. This is done by setting up a HTTP server.



var initHttpServer = () => {
    var app = express();
    app.use(bodyParser.json());

    app.get('/blocks', (req, res) => res.send(JSON.stringify(blockchain)));
    app.post('/mineBlock', (req, res) => {
        var newBlock = generateNextBlock(req.body.data);
        addBlock(newBlock);
        broadcast(responseLatestMsg());
        console.log('block added: ' + JSON.stringify(newBlock));
        res.send();
    });
    app.get('/peers', (req, res) => {
        res.send(sockets.map(s => s._socket.remoteAddress + ':' + s._socket.remotePort));
    });
    app.post('/addPeer', (req, res) => {
        connectToPeers([req.body.peer]);
        res.send();
    });
    app.listen(http_port, () => console.log('Listening http on port: ' + http_port));
};


As seen, the user is able to interact with the node in the following ways:

List all blocks
Create a new block with a content given by the user
List or add peers


The most straightforward way to control the node is e.g. with Curl:
#get all blocks from the node
curl http://localhost:3001/blocks



Architecture

It should be noted that the node actually exposes two web servers: One for the user to control the node (HTTP server) and one for the peer-to-peer communication between the nodes.(Websocket HTTP server)








Conlusions

The NaiveChain was created for demonstration and learning purposes. Since it does not have a “mining” algorithm (PoS of PoW) it cannot used in a public network. It nonetheless implements the basic features for a functioning blockchain.

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Why Blockchain is Hard

The hype around blockchain is massive. To hear the blockchain hype train tell it, blockchain will now:

1. Solve income inequality
2. Make all data secure forever
3. Make everything much more efficient and trustless
4. Save dying babies

What the heck is a blockchain, anyway? And can it really do all these things? Can blockchain bring something amazing to industries as diverse as health care, finance, supply chain management and music rights?

And doesn’t being for Bitcoin mean that you’re pro-blockchain? How can you be for Bitcoin but say anything bad about the technology behind it?

In this article, I seek to answer a lot of these questions by looking at what a blockchain is and more importantly, what it’s not.

What is a blockchain?

To examine some of these claims, we have to define what a blockchain is and herein lies a lot of the confusion. Many companies use the word “blockchain” to mean some sort of magical device by which all their data will never be wrong. Such a device, of course, does not exist, at least when the real world is involved.

So what is a blockchain? Technically speaking, a blockchain is a linked list of blocks and a block is a group of ordered transactions. If you didn’t understand the last sentence, you can think of a blockchain as a subset of a database, with a few additional properties.

The main thing distinguishing a blockchain from a normal database is that there are specific rules about how to put data into the database. That is, it cannot conflict with some other data that’s already in the database (consistent), it’s append-only (immutable), and the data itself is locked to an owner (ownable), it’s replicable and available. Finally, everyone agrees on what the state of the things in the database are (canonical) without a central party (decentralized).

It is this last point that really is the holy grail of blockchain. Decentralization is very attractive because it implies there is no single point of failure. That is, no single authority will be able to take away your asset or change “history” to suit their needs. This immutable audit trail where you don’t have to trust anyone is the benefit that everyone that’s playing with this technology is looking for. This benefit, however, come at a great cost.

The Cost of Blockchains

The immutable audit trail uncontrolled by any single party is certainly useful, but there are many costs to create such a system. Let’s examine some of the issues.

Development is stricter and slower

Creating a provably consistent system is not an easy task. A small bug could corrupt the entire database or cause some databases to be different than other ones. Of course, a corrupted or split database no longer has any consistency guarantees. Furthermore, all such systems have to be designed from the outset to be consistent. There is no “move fast and break things” in a blockchain. If you break things, you lose consistency and the blockchain becomes corrupted and worthless.

You may be thinking, why can’t you just fix the database or start over and move on? That would be easy enough to do in a centralized system, but this is very difficult in a decentralized one. You need consensus, or the agreement of all players in the system, in order to change the database. The blockchain has to be a public resource that’s not under the control of a single entity (decentralized, remember?), or the entire effort is a very expensive way to create a slow, centralized database.

Incentive structures are difficult to design

Adding the right incentive structures and making sure that all actors in the system cannot abuse or corrupt the database is likewise a large consideration. A blockchain may be consistent, but that’s not very useful if it’s got a lot of frivolous, useless data in it because the costs of putting data into it are very low. Neither is a consistent blockchain useful if it has almost no data because the costs of putting data into it are very high.

What gives the data finality? How can you ensure that the rewards are aligned with the network goals? Why do nodes keep or update the data and what makes them choose one piece of data over another when they are in conflict? These are all incentive questions that need good answers and they need to be aligned not just at the beginning but at all points in the future as technology and companies change, otherwise the blockchain is not useful.

Again, you may be wondering why you can’t “fix” some broken incentive. Once again, this is easy in a centralized system, but in a decentralized one, you simply cannot change anything without consensus. There’s no “fixing” anything unless there’s agreement from everyone.

Maintenance is very costly

A traditional centralized database only needs to be written to once. A blockchain needs to be written to thousands of times. A traditional centralized database needs to only checks the data once. A blockchain needs to check the data thousands of times. A traditional centralized database needs to transmit the data for storage only once. A blockchain needs to transmit the data thousands of times.

The costs of maintaining a blockchain are orders of magnitude higher and the cost needs to be justified by utility. Most applications looking for some of the properties stated earlier like consistency and reliability can get such things for a whole lot cheaper utilizing integrity checks, receipts and backups.

Users are sovereign

This can be really good as companies don’t like the liability of having user data in the first place. This can be bad, however, if the user is “misbehaving”. There’s no way to kick out the user that’s spamming your blockchain with frivolous data or has figured out a way to profit in some fashion that causes other users lots of inconvenience. This is related to the above observation that incentive structures have to be designed really, really well in that a user that figures out an exploit is not likely to give that up, especially if there’s profit for the user.

You may be thinking that you can simply refuse service to malicious users, which would be very easy to do in a centralized service. However, unlike a centralized service, refusing service is difficult because no single entity has the authority to kick anyone out. The blockchain has to be impartial and enforce the rules defined by the software. If the rules are insufficient to deter bad behavior, you’re out of luck. There is no “spirit” of the law here. You simply have to deal with malicious or misbehaving actors, possibly for a very long time.

All upgrades are voluntary

A forced upgrade is not an option. The other players on the network have no obligation to change to your software. If they did, such a system would be much easier, faster and cheaper to build as a centralized system. The point of a blockchain is that it’s not under the control of a single entity and this is violated with a forced upgrade.

Instead, all upgrades have to be backwards-compatible. This is obviously quite difficult, especially if you want to add new features and even harder when thinking from a testing perspective. Each version of the software adds a lot to the test matrix and lengthens the time to release.

Again, if this were a centralized system, this would be very easy to correct by no longer servicing older systems. You cannot do this, however in a decentralized system as you cannot force anyone to do anything.

Scaling is really hard

Finally, scaling is at least several orders of magnitude harder than in a traditional centralized system. The reason is obvious. The same data has to live in hundreds or thousands of places than in a single place. The overhead of transmission, verification and storage is enormous as every single copy of the database must pay them instead of those costs being paid just once in a traditional, centralized database.

You can, of course, reduce the burden by reducing the number of nodes. But then at that point, why do you need a decentralized system at all? Why not just make a centralized database if scaling costs are the main concern?

Centralization is a lot easier

If you notice a theme, it’s that decentralized systems are very difficult to work with, expensive to maintain, hard to upgrade and a pain to scale. A centralized database is much faster, less expensive, easier to maintain and easier to upgrade than a blockchain. So why do people keep using the word blockchain as if it’s some panacea for all their problems?

First, a lot of these industries that are being sold on blockchain are really overdue for IT infrastructure upgrades. Health care has notoriously terrible software. Financial settlement is still running on software from the 70’s. Supply chain management software is both difficult to use and hard to install. Most companies in these industries resist upgrading because of the risk involved. There are lots of infrastructure upgrades that cost hundreds of millions and end up being rolled back anyway. Blockchain is a way to sell these IT infrastructure upgrades and make them a bit more appetizing.

Second, blockchain is a way to look like you’re on the leading edge of technology. Like it or not, the word “blockchain” has taken on a life of its own. Very few people actually understand what it is, but want to appear hip so use these words as a way to sound more intelligent. Just like “cloud” means someone else’s computer and “AI” means a tweaked algorithm, “blockchain” in this context means a slow, expensive database.

Third, people really don’t like government control of certain industries and want a different adjudication mechanism than the legal framework which is often slow and expensive. To them, “blockchain” is really just a way to get rid of the heavy apparatus of government regulation. This is overselling what blockchain can do. Blockchain doesn’t magically take away human conflict.

The result is a lot of people that are hyped up on the promises without actually understanding the abilities or costs. What’s worse, the actual technical details and costs are abstracted away from a lot of VCs and executives in such a way as to obscure what a blockchain can and can’t do. Everyone under them become afraid to say that the emperor has no clothes and we have the situation that we have now.

So what is blockchain good for?

We’ve already established that a blockchain is very expensive relative to centralized databases. So the only reason you should be using a blockchain is to decentralize. That is, remove the single point of failure or control.

This naturally means that the software or database must not change things around often, if at all. There should be little upside to upgrading and much downside to screwing up or changing the rules.

Most industries are not like this. Most industries require new features or upgrades and the freedom to change and expand as necessary. Given that blockchains are hard to upgrade, hard to change and hard to scale, most industries don’t have much use for a blockchain.

The one exception we’ve found is money. Unlike most industrial use cases, money is better if it doesn’t change. Immutability and difficulty in changing the rules is a positive for money and not a detriment. This is why blockchain is the right tool for the job when it comes to Bitcoin.

What’s clear is that a lot of companies looking to use the blockchain are not really wanting a blockchain at all, but rather IT upgrades to their particular industry. This is all well and good, but using the word “blockchain” to get there is dishonest and overselling its capability.

Conclusion

Blockchain is a popular term these days and unfortunately, this “blockchain not Bitcoin” meme won’t die. If you are a centralized service, a blockchain doesn’t get you anything that you can’t do a thousand times cheaper with a centralized database. If you are a decentralized service, then you’re probably fooling yourself and not thinking about the single points of failure that exist in your system. There wouldn’t be a “you” at all in a truly decentralized service.

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Why Ethereum is the Future of Blockchain

The blockchain platform with the most utility, developers and the dApp framework that is the most scalable, will win and take over the mantle from Bitcoin, as the heir apparent of blockchain innovation.

It would be hard to argue that in 2018, that’s not Ethereum. Its spawned countless ICOs, and has the most developers by far globally working on it. As of October 2017, according to CNBC it had at least 35,000 developers. In 2018, some believe that number is closer now to 200,000. That is according to Kevin Rooke, a cryptocurrency researcher and YouTuber.

Ethereum: the Handmaid of Decentralization

Few blockchain projects embody the spirit of decentralization as soundly as Ethereum and Vitalik Buterin. Ethereum is built on a newer generation of blockchain technology and is optimized for software engineers. With advances in sharding and plasma it has a decent chance of overcoming its scalability issues sooner rather than later.

A reported 94 out of the top 100 blockchain projects have launched on top of the Ethereum network. Ethereum as of mid 2018 has a market cap of $52.3 billion USD, but that doesn’t properly show its ubiquity as the leading dApp platform for developers and blockchain startups.

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. — Satoshi Nakamoto

Ethereum: the Blockchain Platform Devs Want to Work On

Ethereum’s commitment to a scaling strategy and decentralization, likely most resonates with developers as the first-mover dApp platform of choice. While Bitcoin over the last decade evolved into a digital store of value, it didn’t scale in terms of a payments option for various reasons.

However Ethereum has increasingly established itself as the leading decentralized application platform. A landscape of competitors has emerged but without posing any immediate threats to changing this, which include among others: EOS, NEO, Cardano, Stellar, Qtum, ICON and now likely Tron have gained significant market valuation and presence in the global market, with their focus set on decentralized applications.

Who will blockchain startups and developers trust?

The list of those who are on Ethereum is too long to list, however even the most pragmatic solutions such as $2 billion China-based IoT blockchain network VeChain, exist on the Ethereum network. Tron is migrating to build a competitor to NEO, often referred to as the “Ethereum of China”. It’s uncertain if Cardano or EOS will have the technical superiority they claim to threaten Ethereum in the immediate future, or the next few years.

You will notice also Ethereum has substantial partnerships with enterprise level companies, including Amazon (AWS) in the cloud.

Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly. - Vitalik Buterin

As blockchain evolves, how it intersects with the Cloud, and how smart contracts become implicated in services, accessibility, the sharing economy and decentralization of utilities is collectively relevant. A Swiss town will pilot voting on the blockchain using Ethereum-based IDs. All the applications of blockchain on our lives isn’t even fundamentally clear yet, but adoption has accelerated and is accelerating.

With it, the interest of software engineers, developers and coders is also at an all-time high. If hacks and BTC manipulation probes devalues Bitcoin’s price, Ethereum is free from being such a pioneer, it can be a first-mover at the intersection of enterprise and decentralization and blockchain startups. While ICO regulatory pressure has decreased their total funding in 2018, if we discount EOS and Telegram which are basically anomalies, Ethereum is pivoting to more practical use-cases.

Blockchain may not be the future of business quite like artificial intelligence and the cloud are, but it’s certainly becoming an important protocol with added ROI and obvious benefits.

In the concepts of open-source projects and decentralization, developers are attracted to the dynamic innovation of the space. Even Wall Street is seeing an exodus of financial talent teaming up with software engineering to start new exciting projects. It’s not because of crypto, it’s largely because of Ethereum.

If ICOs fueled crypto hype in 2017, enterprise adoption of blockchain is changing how we collectively see blockchain tech in 2018. Blockchain is now ahead of quantum computing and super-computing in how this nascent tech is impacting innovation and the variety of new blockchain startups is astounding.

The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime. — Satoshi Nakaomoto

While Bitcoin remains somewhat of a relic and a symbol, Ethereum is dynamic and must evolve to meet the demands of the times and as the dApp platform that’s the current leader.

Ideology and Trust Matters to Developers

Vitalik Buterin is also a respected figure whose clear idealism contrats much of the profiteering vibe of other crypto projects and altcoins. Ethereum doesn’t feel like a Microsoft of a Facebook, because of Vitalik’s youth and vision.

If we look at Google trends, and eliminate the big three of San Francisco, Seattle and New York, in what U.S. cities do you suppose searches for Ethereum are taking place in the last year?

• Austin
• L.A
• San Diego
• Boston
• Denver
• Miami
• Washington
• Chicago

So basically a who is where of where young developers are at. That some of the most talented developers and entrepreneurs are attracted to the blockchain space is exciting. However globally, China by far rules the number of Ethereum searches. You must therefore conclude that a lot of important work of blockchain startups is actually occuring in China.

In a world of increasing complexity, the blockchain’s biggest unique value proposition may be how to handle and solve the problem of trust, accountability and security at the intersection of myriad industries and their sub-verticals. Let’s be realistic, these issues are intensifying and have a nearly universal application across value chains.

As society becomes more and more complex, cheating will in many ways become progressively easier and easier to do and harder to police or even understand. — Vitalik Buterin

Young people and consumers and citizens require another level of trust in the system, in apps, in services, in government, in politics, in corporate sustainability. Greater decentralization can manifest on the blockchain. Ethereum can be a vehicle for that.

Wealthy societies around the world are facing a growing crisis of confidence in established authorities. Stagnating economies, mounting inequality, political corruption and the increasing monopolization of technology for the benefit of elites have provoked a populist backlash. — Vitalik Buterin.

The biggest company with a crisis of trust Facebook, has even announced that it will integrate blockchain into its business model. Coinbase is scrambling to secure the popularity of its app and to secure its future viability. Stronger Asian led blockchain and crypto solutions are also inevitable. TRON is exceedingly ambitious, and NEO claims many advantages over Ethereum. China can accelerate blockchain projects and will likely do so immensely in the 2020s. However can they attract developers away from Ethereum’s platform?

If Bitcoin is shrouded in controversy, Ethereum is bathed in possibility. In a way they are the Yin and Yang of cryptocurrencies. On a Web 3.0 running smart contracts with 5G, what will be possible? In an IoT of everything, what kinds of blockchain systems will be in place? We are about to find out.

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