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A cryptocurrencies primer
With Bitcoin passing $11,000 recently (October 2017) I had a few friends reach out and ask about Bitcoin. As many of you know, I completed a Masters in Digital Currency from the University of Nicosia in the spring of 2018. This post serves as an introductory primer to cryptocurrencies for non-technical folks. I will attempt to stay at a high level and will talk about cryptocurrencies as a whole rather than Bitcoin individually. There are many areas that I skim over (such as mining and proof-of-stake) which will be a separate blog post after this one.
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Bitcoin Is Money
The following are two essays that I wrote for a Banking and Finance class for my Masters in Digital Currency. The assignment was two short essays, one on why bitcoin is money and another on why bitcoin is not money. Both have been edited slightly.
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Certificate of Accomplishment, DFIN-511 Introduction to Digital Currencies
The University of Nicosia uses the Bitcoin blockchain to verify the authenticity of certificates that have been awarded.
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What is the average amount of time between blocks mined?
I am taking an online class through the University of Nicosia in digital currencies and covers Bitcoin and the Blockchain. It is a free MOOC and can also be used as credit towards their Masters in Computer Science.
During the Live Q&A section on October 3rd, 2016, there was a question about the timing between blocks being mined. It was suggested that we look at the previous 2016 blocks to see what the average time between blocks mined.
The Bitcoin protocol is set to average the time to be 10 minutes between blocks. Every 2016 blocks the network readjusts the difficulty so the average time blocks are mined is 10 minutes. If the average time is longer than 10 minutes then the difficulty decreases, if the average time is shorter than 10 minutes the difficulty increases.
I wrote a small JavaScript script to parse Blocktrail’s API to get the previous set of 2016 blocks and convert it to a CSV. I opened that file in Excel and created the chart and the results below.
The blocks started at 429408 and finished at 431423. The difficulty was set at 225,832,872,179.46.
Results
The average time to mine a block was 563 seconds or 9:23. The longest time was 1:17:36 and the shortest was less than a second.
Because the average time to mine was less than 10 minutes, the difficulty was increased starting at block 431424 to 241,227,200,229.99
The Code
I posted the code up on GitHub if you are interested in contributing.