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What do central banks want with blockchain?
You may have heard rumblings of central banks wanting to issue their own digital currency. It’s true. China is rolling one out, the IMF just held a summit on it, and the EU is taking it seriously, Canada, UK, Russia, etc. Why is that? When money was issued 100 years...
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How Smart Contracts Democratize Finance
Leviathan is the name of a book by Thomas Hobbes. It is supposed to represent a creature that is made up of many smaller creatures, symbolizing how individuals come together to create a society. In many ways this is the perfect metaphor for one of the main benefits of smart...
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Money Legos
Last issue I discussed the power of permissionless building. Building on a platform with no gatekeeper. No company in control to deny you access to their users. No company to change the rules on you and jeopardize your business. But there’s another massive benefit that comes with an open system:...
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The power of open systems
If there’s anything I hope you take away from these posts it’s that the true power of blockchain is in its openness. It’s open to use. It’s open to participate in validating transactions. It’s open to be audited. It’s open to build on. People usually focus on blockchains being open...
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Why protocols > companies. An overview of Uniswap
A protocol on a blockchain is a set of smart contracts that define the rules for interacting with a system. A good example is Uniswap, an exchange protocol whose growth has been astronomical. By exchange protocol I mean you send asset A to the protocol and it sends you asset...
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What is a protocol?
In the last issue, we talked about smart contracts. If a blockchain is something where you transfer value by sending money from A to B, a smart contract allows you to customize that transaction. A smart contract is a fixed piece of computer code that controls money. That code could...
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The magic of smart contracts
There’s a whole lot more you can do with blockchains than simply transferring money from person to person. When you think about it, a transfer is just a simple computer program. If Alice authorizes $5 to Bob, send Bob $5. There is nothing about the way blockchains work that limits...
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Why smart contracts are a superpower for blockchains
A blockchain is a big database that keeps track of things, like bitcoins. They have a clever way of allowing people to transfer balances but without having anyone in control. A global, open system to keep track of balances is a powerful thing. It’s like a bank without the bank....
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Bitcoin vs Ethereum - What's the difference?
Blockchain technology was invented when Bitcoin was released in 2009. Since then there have been many different blockchains that have been created. Blockchains are all about being on the same page as others. That’s what makes them so efficient. It’s powerful to have everyone in the world using the same...
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Bitcoin, Ethereum, and everything else
Blockchain is really confusing. That’s why I write this newsletter. You hear so many things. Sometimes people say ‘blockchain technology’, other times it’s a blockchain or the blockchain. ‘Blockchain technology’ is like saying ‘computer technology’. It describes the general tech, but not a particular example. Just like Macbook and Thinkpad...
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Why USD on the blockchain is a gamechanger
Cryptocurrencies like Bitcoin are great, and in some ways they make great money, but the fact is very few people around the world use them. The US dollar on the other hand is used by almost everybody. When it comes to money, network effects are very important, and the USD...
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Why Ethereum is better than AWS
Often when you’re talking about blockchain, people throw around the word ‘decentralization’. Decentralization is a very nebulous term and while it’s important, it’s not always clear why. Part of why it’s confusing is when applied to blockchains, it means a few different things. Digital signatures, the topic of my last...
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What makes a blockchain account secure?
A blockchain is a set of records that is updated by anonymous maintainers. They do this work because they are compensated in the blockchain’s cryptocurrency. Blockchains get their name because new transactions are added in batches, called blocks. These blocks are added to the end of an existing chain of...
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Why blockchain is boring
When it comes down to it, a blockchain is a network of computers using incentives and fancy math to create a system that transfers value. To a lot of people, that sounds boring. It’s extremely interesting if you’re into that sort of thing, but most aren’t and that’s fine. Everything...
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Why hasn't Bitcoin gone mainstream?
Bitcoin came into the world quietly but has since generated a lot of hype. A promise of a global digital currency, not controlled by any bank or government. That’s still true, but for some reason, it hasn’t gotten the traction that was initially hyped when launched over 10 years ago....
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Why do people invest in cryptocurrencies?
The short answer is they believe it will go up in price. But why would a cryptocurrency go up in price? For the same reason anything goes up in price. Supply and demand. Why would a cryptocurrency be in demand? It might help to think about it in the context...
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Why do people go crazy for Bitcoin?
I’m sure you’ve noticed it. An almost cult-like following for cryptocurrencies that I’m sure is perplexing. An e-currency that isn’t backed by anything? Weird It largely has to do with the properties of money. We think of dollars as money and that’s it, but history is littered with many different...
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Technology As A Tool For Freedom
I was taking a break from writing these because with everything going on, it honestly seems so unimportant. I’m a guy who thinks blockchain is incredibly valuable but it’s nothing compared to the tragedy of people being unjustly taken before their time. The amount of suffering Black and Indigenous people...
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Cryptocurrency vs blockchain - what's the difference?
A cryptocurrency is money that is kept track of on a blockchain. A blockchain is a system that keeps track of cryptocurrency. “What makes them so special”? The real innovation of blockchain is it’s a computer system that pays strangers to maintain it. Cryptocurrencies are what blockchains use to pay...
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Why are blockchains more efficient?
Let’s say you want to send some money to India. Sending it on TransferWise costs $6.83 for next day delivery. Sending it on Ethereum (a blockchain) costs $0.06 and takes 1 minute. Why is that? With TransferWise, you transfer money into their Canadian bank account and they transfer it out...
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One Minute Block Time
Do you remember the feeling when you got your first paycheck? That feeling of having your money. The feeling of freedom. The freedom to buy whatever you want. It’s a similar feeling to spending a $20 bill. There’s no one to stop you from spending it. Cash is great but...