Certified Blockchain Professional - Module 02: Crypto Assets

As previously discussed, I'm doing the Certified Blockchain Professional course. It is self-directed learning, so I'm going through it at my own pace. In order to consolidate my learning, and help organise my thoughts, I'm blogging about my reflections on each module.

These are mostly notes to myself - but I hope if you find something interesting (or incorrect) that you'll leave a comment.

Part of the problem with this book is that it is so credulous. It takes almost everything at face value and rarely presents a downside to the technology. It makes it very hard to treat it as an objective learning experience. It's also very sloppy when it comes to defining terms - so I spent a bunch of time looking up what it was talking about.

Onto the notes:

Tokenization is the process of converting rights to an asset into a digital token on a blockchain. Real-life examples such as gold, real estate, and stocks can be represented on blockchain using tokens.

OK, but all this is really doing is storing a certificate of ownership on a public ledger. Useful for things like land (already mostly public). Handy to see when items have been traded. Could also be bad - do you want everyone knowing your bank balance or what cars you own?

“verifiable digital scarcity”. … Non-Fungible Token protocol is defined in ERC-721 http://erc721.org Standard is defined here: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-721.md

The first website has a broken certificate. There's a better explanation at https://fulldecent.blogspot.com/2018/06/nontechnical-what-is-erc-721.html

ERC-721 is a "smart contract" rather than a standard. It implements ownership and transference of tokens. All tokens have an ID which is a uint256 - that is 2^256-1 Handy because UUIDs and SHA3 hashes are directly convertible to uint256.

In 2013 and 2014, the alternative coins (altcoin) market grew exponentially, and many different types of alternative coin projects were started. A few of those became a success, whereas many were unpopular due to less interest and as a result, they did not succeed. A few were pump and dump scams that surfaced for some time but soon disappeared.

That's a rather charitable reading of the situation! Would benefit from some hard numbers behind it. Also, why did these altcoins come into being? What was their purpose? Can a decentralised currency really fail? Doesn't the chain live on forever?

Some altcoins set out to address Bitcoin limitations such as privacy. Some others offer different types of mining, changes in block times, and distribution schemes.

This is interesting from an economics point of view. Obviously, Bitcoin isn't perfect (nothing is) but it is now so "mature" and widespread that it is impossible to improve it without consensus. So forks need to be created.

Good - but simple - discussion of pump-and-dump scams. Don't want to allocate coins to initial miners.

Proof of burn seems ridiculous. Why would destroying value elsewhere result in more value on an unrelated system?

zkSNARKS - again, very little technical discussion. This book feels like a glossary at times.

Litecoin allows for faster transactions as compared to bitcoin due to its faster block generation time of 2.5 minutes.

At which point, you have to ask if these people are living in the real world? I can do millisecond transactions in the UK using traditional banks. Now, this is not reconciled transactions at an interbank level, but these systems need to be at least an order of magnitude faster.

Scrypt is interesting. Use of memory rather than computation. Makes it harder to develop dedicated hardware (ASIC) to run it faster. Incidentally, there's no definition of ASIC - I think this book has been cobbled together by people who expect too much of the intended reader.

ICO - Initial Coin Offering - starts out by explicitly saying they're unregulated and the some jurisdictions treat ICOs in a similar way to IPOs. KYC and AML important.

Assignment

Learn how to perform mining using dogecoin client. As mining Bitcoin has become impossible using commodity hardware such as CPUs or even early ASICs (e.g USB ASICs), this example is introduced here which allows you to experience mining using CPUs. This example will get you familiarized with how mining works and you can mine some Dogecoin to get a feel of how mining works and what’s involved. This will utilize only CPU for mining.

This feels like an odd assignment. There's a Dogecoin wallet available - but it doesn't include a miner. Indeed, it isn't really possible (let alone profitable) to mine a block on a laptop. I didn't bother with this. I don't see what I can learn from installing dodgy software and configuring it.

Perhaps future modules will discuss personal security, how to protect a wallet, and avoid phishing? And, just as importantly, how to pay taxes on what you've mined!