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Crypto Guides

Different Facets Of The Blockchain Technology

Introduction

We have seen many topics related to blockchain explaining different facets of the technology. This article is an attempt to put together the main aspects of the technology and how it has shaped up so far from the invention of bitcoin as the first application of blockchain technology.

🔗 Cryptocurrencies

The blockchain journey starts with cryptocurrencies. The blockchain technology journey started with the bitcoin platform. The coin is the first cryptocurrency ever, and it changed the course of the finance industry for good. Cryptocurrencies include the properties of cryptography, which result in the property of immutability.

Peer-to-peer networks lead to decentralization, which has become the need of the hour with ever-growing frauds. The cryptocurrency platforms use different consensus algorithms like Proof of Work, Proof of Stake, Delegated Proof of Stake, Proof of Burn, etc., which overcome Byzantine Fault Tolerance issues. People who maintain the network and confirm the transactions are incentivized using the local currency of the platform.

🔗 Cryptocurrencies with enhanced privacy features

Blockchains being transparent, it is easy to find the transactions done by different users in the platform. Hence a few platforms have enhanced privacy features so that the transactions made are not traceable. Coins from the Cryptonote family are a good example. Monero is an excellent example from cryptonote, which uses ring signatures, which obscures the sender and receiver’s address. The amount is also restricted by default.

🔗 Different types of Blockchains

While cryptocurrency platforms have a protocol that they should be open and permissible, it is not a hard and fast rule for blockchain technology. We have permissioned ledgers, which are also called private blockchains. An excellent example of private blockchains is enterprise blockchains like hyperledger platforms.

We also have permissionless ledgers, which are public blockchains. Good examples of permissionless are cryptocurrency platforms. We have hybrid platforms as well, which are a mix of public and private, leveraging the properties of both the platforms wherever required.

🔗 Applications of blockchain other than cryptocurrency

Blockchain technology has made its way to almost all the fields. Healthcare, supply chain, agriculture, energy trading, valuable goods/diamond digitization, shipping industry, trade finance, music, publications, art, gaming, etc. Blockchain being a niche technology, the adoption is still low, but the recent surveys across the industries only prove that they have started implementing the technology or looking to implement at the moment.

🔗 Non-crypto applications on top of cryptocurrency platforms

Ethereum has many DAPPs developed and operating on its platform, but we cannot say that these applications run on cryptocurrency applications. Ethereum is a broad platform with a multitude of smart contracts operating on them serving different purposes. There are applications on the top of the bitcoin platform which convey messages. Protocols like Counterparty, Factum, Colored Coins allows the creation of tokens to denote something with a fraction of bitcoin value.

🔗 Projects to tackle scalability issues

The main drawback of blockchain platforms is scalability, and many projects have been developed to address the same. Segwit, segregation of witness aims to remove the signature from the main block and store it somewhere else to increase the block’s space for more transactions.

We have sidechains that intend to transfer some of the workloads to an adjacent chain, called sidechain, which may or may not run on the same consensus algorithm but are equally secured. The hacking of the main chain doesn’t affect the side chain and vice versa. The sidechains are used to test innovations and implement smart contracts if they are not feasible to run on the leading network.

Conclusion

These are some of the facets to show how blockchain as a technology has grown to address the drawbacks from one stage to another. Many have speculated that the technology is not very much useful and is overhyped. But with all the developments since its inception and all the money being poured into the technology, we can only say that it is here to stay and improve a lot and prove itself for time and again.

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Crypto Guides

How to Audit a Smart Contract?

Introduction

Smart contracts are a self-executing piece of code, executable when certain predefined conditions are met. Ethereum enabled the birth of smart contracts. Since these contracts are based on blockchain technology, they cannot be changed once implemented.

Hence it is crucial to test them before deploying them accurately, and timely audits ensure the bug is fixed. In our previous articles, we have seen the DAO attack on the Ethereum platform due to which millions of dollars were lost. The Ethereum platform had to be hard forked to mitigate the loss henceforth.

Generally, audits are conducted to check for bug fixes. The audit is targeted in such a way to check for already known targets based on the experience of previous audits. Hence let us see below what kind of smart contract attacks there are.

Smart contract attacks

Race Conditions

Race conditions are a case where events don’t occur in an intended order. It is often required to call external contracts in smart contracts, and thus the possibility of race conditions is very high.

Reentrancy

This is a kind of race condition where one function is repeatedly called before the first function’s invocation is completed. This means making the first function recursive, the exact thing which happened in the DAO attack.

Transaction Ordering Dependence

This is yet another type of race condition where the manipulations can be done in terms of transaction orders. The transactions order can be manipulated and cheated at the expense of other users.

These are some of the types of smart contracts attacks. Let us see below the detailed step by step process of auditing a smart contract.

Steps to audit a smart contract

1️⃣ As in any audit process, the auditing company/group should clarify who they are and their authority to conduct the audit and procedures to be followed, if possible, from a legal perspective.

2️⃣ Audits are conducted on a deployed smart contract or a smart contract ready to be deployed in a blockchain. It is essential that a smart contract without any bugs is to be implemented.

3️⃣ A legal disclaimer, as such, the audit doesn’t provide any legal guarantee but fosters the discussion about the smart contracts bugs, if any, to fix them.

4️⃣ Attacks will be conducted as detailed above and see if they can be successfully implemented on the smart contract being audited.

5️⃣ Report the vulnerabilities and bugs if found any. Some may not seem like a potential threat right now, but they may turn out to be a serious flaw later; they have to be recognized and taken care of.

6️⃣ Contract complexity should be checked. Often complexity leads to mistakes, and the complex code should be thoroughly checked for any potential bugs.

7️⃣ Check how the contract responds to a bug or vulnerability. Contracts behavior in such times is essential to check if there will be any money loss, or the contract execution will stop showing potential issues is to be noted down.

8️⃣ All the security patches should be thoroughly updated so that all the libraries are up to date. The update should act like preventive maintenance.

The steps outlined above are very general in purpose in auditing a smart contract. Depending on the language we use for a smart contract, various steps can be followed. In any language used, these are the necessary steps one can follow before moving further with the in-depth analysis.

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Crypto Daily Topic

What Does It Take to become a Blockchain Developer? [Updated]

In the crypto world, blockchain technology is essentially a ledger system on which cryptocurrency transaction data is recorded. Every entry is permanent and immutable, meaning it can’t be altered in any way. The data is then verified through consensus by multiple nodes, which are basically computers, making the technology secure and reliable. 

Given its benefits, virtually all industries, from banking, real estate, health-care, music, to logistics, are working towards integrating blockchain technology into their framework. As technology permeates across industries, there is a rising demand for skilled blockchain developers to help optimize the protocol to suit the needs of a specific industry. 

Considering that the technology is still in its budding stage, starting a career as a blockchain developer places you at the front seat to drive its growth. For those working in the tech field, chances are, they have the necessary foundation required to start a career as a blockchain developer. However, if you have no tech skills whatsoever, it’s still possible to become a blockchain developer, but it’ll take a bit more work and dedication to learn the basics. A good place to start is first understanding the most common programming languages used in most cryptocurrency projects. These languages include; Java, Python, JavaScript, Swift, and Solidity. 

Regardless of your skills level here’s are the essential skills required to kick-start your career as a Bitcoin developer: 

Understand the Principles of Blockchain 

Since most of the developer’s work involves interacting with blockchain technology, it makes sense to have a good grasp of how the entire protocol works. You also need to understand the foundational concepts of blockchain architecture such as; cryptographic hash functions, consensus, and distributed ledger technology. 

To understand these concepts, it’s advised to read through the Bitcoin Whitepaper. However, you’ll need a little bit of guidance to direct your learning curve, which is signing up for short-term certification courses on the same will be helpful. 

Data Structures Proficiency 

Data structures are an integral part of development. In the case of blockchain development, it becomes even more important since blockchain relies on data structures to build scalable and tamper-proof records. 

Besides, as a blockchain developer, you’ll spend most of your time working with data structures such as Merkle trees and petricia trees, among others, as you try to configure the network to meet specific needs. 

Smart Contract Development 

Smart contracts are one of the key components of blockchain technology, especially in a business-focused environment. The concept came into the spotlight after Ethereum used it in its protocol. Since then, almost all upcoming blockchain projects are striving to incorporate smart contracts in their functionality. Solidity, Viper, and Chaincode; are among the top programming languages used to develop smart contracts. So, it pays to invest time in learning these languages. 

Cryptography 

In a blockchain network, cryptography and data structures complement each other, to establish the integrity of the network. Asymmetric cryptography, in particular, is used in blockchain to generate digital signatures for verifying transactions. Also, cryptography algorithms help secure data on the blockchain. 

Web Development 

The majority of blockchain developers end up working in designing decentralized applications. Additionally, blockchain technology uses a huge variety of web-based services and APIs. As a blockchain developer, this demands that you understand both front-end and back-end development, which involves creating an intuitive user interface, request handling for the decentralized apps, and API handling. 

Once you have a good understanding of the concepts above, you need to know that there are two main types of blockchain developers. These are core blockchain developers and blockchain software, developers. Let’s look at what each one of them entails: 

i) Core Blockchain Developers

Core blockchain developers focus on developing the blockchain technology itself, including designing the consensus protocols. They can also advise companies on how to structure their Initial Coin Offerings (ICOs) as well as supervise and plan blockchain projects. 

ii) Blockchain Software Developers

Blockchain software developers use the blockchain protocol to build or design decentralized apps. As such, they can work together with the core developers to come up with unique software based on the protocol developed by the core developers. It is also the role of a blockchain software developer to design smart contracts and the other web development roles, as mentioned earlier.

Currently, most job opportunities lie in decentralized app development, as various industries and businesses strive to incorporate blockchain into their processes. 

Self-taught or Formal Education for Blockchain Developers 

Deciding to become a blockchain developer is one thing, choosing a mode of learning is a whole different thing. 

For starters, taking the self-taught route is appealing to those who already have a career in the tech industry. There are numerous online courses to guide you, so you only learn the required content. You can sign up for Coursera or Udemy courses or checkout GitHub repositories for guided content. Online learning platforms on the same, can also help sharpen your self-taught skills as you interact with other blockchain developers. 

If you are completely new to the tech world and possess no skills, formal education focused on basic concepts such as programming and software development is your best bet if you want to start a career as a blockchain developer. Some colleges these days even offer blockchain development courses as certification programs. So, once you enroll in such a college, you’ll not only learn the basic tech skills but also become a blockchain developer at the end of your program.

Nonetheless, you can as well learn the basic tech skills from online courses and other dedicated pages. Once you have mastered the concepts, including those mentioned above, you can then transition to become a blockchain developer by taking up courses on the same. 

Whether you sign up for online courses or enroll for formal education, remember the only way to perfect your skills and boost your resume is by getting hands-on experience. So, try working on solo projects or collaborating with like-minded developers. There are various online open-source projects you can contribute to sharpen your skills and get the much-needed experience. 

Conclusion

Blockchain is considered the next wave of tech innovation. This explains why well-established tech companies such as IBM, Microsoft, and Samsung are showing interest in this revolutionary technology, as they look to be at the forefront of the growing innovation. Moreover, as the technology is maturing and finding its roots across various industries, this is the best time to start your career as a blockchain developer. 

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Crypto Guides

Distributed Ledger Technology (DLT) – The Back-end Of Decentralized Systems

Introduction

A distributed ledger or DLT is simply a database that exists across several locations or among various participants. But, in the case of centralized databases, it lives in a fixed location. A distributed ledger eliminates the need for a central authority or intermediary to validate or authenticate transactions. This property makes DLT a trending technology.

Technically speaking, DLT is a digital system for keeping track of transactions in which the transactions and its details are recorded in multiple places at the same time. Here, there is neither a central data storage system nor an administrating functionality. Each node in the distributed ledger processes and verifies each item and creates consensus on each item’s veracity. Also, transaction information is securely stored using cryptography that can be accessed using keys and cryptographic signatures.

Blockchain and DLT: Are they the same?

The most popular application of the distributed ledger is the Blockchain. However, blockchain and distributed ledgers are not the same. Blockchain is just a type of distributed ledger. Blockchain is basically a sequence of blocks, which is in a chain. But, distributed ledgers don’t really require a chain. Therefore, Blockchain is a bit different from the typically distributed ledger. So, note that all blockchains are distributed ledgers, but all distributed ledgers are not blockchains.

Benefits of Distributed ledger

  • The primary feature of DLT is itself a great advantage. A distributed ledger gives full control to the information and transaction to the users. This promotes absolute transparency.
  • Distributed ledgers such as Blockchain find great applications in financial transactions. They cut down operational inefficiencies, which ultimately reduces cost on transactions. Moreover, it provides greater security due to its decentralized nature.
  • DLT offers means to securely and efficiently create a tamper-proof log of activities. Be it international fund transfer or shareholders records, its security and efficiency are unmatchable.

Types of Distributed ledgers

Blockchain hit the headlines when Bitcoin, the first cryptocurrency, surged in the market. Several interesting developments were made in the past decade. However, due to systematic inefficiencies and scaling issues, developers were in search of new solutions outside the blockchain. This search led to the development of Holochain, Hashgraph, and Directed Acyclic Graph.

With the arrival of these solutions, which significantly differ from the blockchain technology, has brought discussions regarding which is the best. Below is a brief comparison of these different types of DLTs.

The use cases of DLT are tremendous. Here, we shall take into account the use cases across the industrial, financial, and consumer sectors.

  • Using Smart Contracts to streamline Industrial processes
  • Immutable ledgers enable more secure financial transactions
  • Blockchain Authentication for identity theft prevention

While the distributed ledger has great advantages, which can considerably affect the present technology, it is in a growing stage and is still being explored to bring the best out of it. However, the decentralized future has at least begun for real.

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Cryptocurrencies

Understanding Ethereum – A Step-by-Step Guide

When we thought we had heard it all about blockchain, and what it does, Ethereum sprang up. To many, it was seen as just another Bitcoin, but what most people didn’t know was that the project presented a timely idea, and a life-changing one whose implementation was bound to lead the world to new paths.

I know you’ve probably heard about Ethereum, but you’ve probably dismissed it as just another crypto. But what is it in the first place? Could it be just another crypto? Is it the same thing as ether? And what is it used for? Well, in this article, I’ll be expounding it in detail to answer these and to show you why Ethereum is not just another crypto.

What is Ethereum?

For starters, Ethereum is a software platform that allows developers to generate and deploy decentralized applications that are accessible globally. If you want to create a decentralized application, that not even you can control, then the Ethereum platform is the place to go. All you need to do is understand Ethereum’s programming language – solidity – and begin coding.

In simple words, Ethereum is the infrastructure that lets you run decentralized apps worldwide.

You will find some people using the words Ethereum and ether interchangeably. So is Ethereum and Ether one and the same thing? Well, let’s find out.

Ethereum and Ether – Are they any different?

The concept of Ethereum and Ether can be a little confusing. When we hear Ethereum, we are quick to associate it with other cryptocurrencies like bitcoin. To make it clearer, Ethereum is a platform built on blockchain where developers can build and deploy thousands of applications using smart contracts.

Ether, on the other hand, is the fuel that powers the Ethereum network, and the programmable money sold on cryptocurrency exchanges. 

The same way you’ll need gas for your car, ether is necessary for you to deploy and run applications on the platform. Ether is the power behind smart contracts and running DApps, token generation during ICOs, making payments, and facilitating transactions on the ETH blockchain.

In summary:

Ethereum is the platform; ether is what powers the platform

Ether can be bought and sold, Ethereum cannot

Ethereum has multiple applications; ether has a single application, enabling operations on the parent blockchain.

So, are Ethereum and Bitcoin similar?

Well, the two are similar in that they are both blockchain networks, but there are some significant technical disparities between the two. There is a very substantial difference between Bitcoin and Ethereum in both purpose and capability. While the former track’s ownership of digital currency, the latter’s primary focus is to support decentralized applications. 

In short, we can say that Bitcoin is a peer-to-peer currency that can be transferred instantly between transacting parties securely. Ethereum, on the other hand, supports smart contracts. And if you are wondering to yourself what a smart contract is, then you will be pleased to know that at the core of these Decentralized applications is a smart contract. So, what exactly is a smart contract?

What is a Smart contract in Ethereum?

A smart contract is simply a phrase coined to describe best “a computer code that can veto the exchange of property, money, content, shares, or anything valuable.” In blockchain language, a smart contract is a self-executing computer program that completes whenever certain conditions are met. It is a programmed code that runs without the possibility of third-party influence, fraud, downtime, or censorship.

All blockchains can process code, but most of them are limited. With Ethereum, it becomes different. Instead of allowing for limited operations, Ethereum lets developers create as many applications as they can, something never experienced before.

What are the uses of Ethereum?

The main use of Ethereum is to enable developers to create and deploy decentralized apps where these decentralized apps, also known as DApps, serve particular functions to users. By virtue of being built on a blockchain, decentralized apps are not controllable by any person or central system.

Ethereum can be used to decentralize any centralized service. From the existing intermediary services across a myriad of industries such as bank loans to other seemingly less interesting systems like voting and title registries, Ethereum can be used to get them all decentralized.

Another objective use of Ethereum is in the building of Decentralized Autonomous Organizations (DAO). This is an organization with no apparent leadership, run exclusively by programming code on a variety of smart contracts recorded on the Ethereum blockchain. The code takes the position of organization rules and structures, totally eliminating the need for a centralized control like in a traditional organization. Anyone who purchases tokens becomes a part-owner of a DAO, but instead of converting tokens to equity shares, tokens give people voting rights.

Ethereum is currently being accessed as a reliable platform for launching other cryptocurrencies. Following the ERC20 token standard laid down by the Ethereum Foundation, interested developers can also start their own versions and raise funds through an ICO. Through this strategy, token issuers set the amount of money they intend to raise before offering it in a crowd-sale in exchange for Ether. The last two years alone have witnessed ICOs raising Billions of dollars on the Ethereum platform.

Conclusion

For all the talk of decentralizing the system, Ethereum appears to be the ultimate solution. Its rise is suggestive of a market ready to embrace positive changes, and a platform for development in an area previously shadowed with uncertainties. It presents a bold claim for a futuristic technology unreliant on third-party forces, including social and political interferences.