Cryptocurrency All-in-One For Dummies. Peter Kent

without trust.

      These same types of frameworks can be used for more than just exchanging value over the network. Here’s an example to help illustrate their potential.

      If you go to a bar, a man at the door stops you and asks to see your ID. You reach into your wallet and hand him your driver’s license. Your license has a lot of information on it that the bouncer doesn’t need, nor should he have access to (like your address). All he needs from the ID is that you’re over the age of 21. He doesn’t even need to know how old you are, just that you meet the regulation requirements.

      In the future, blockchain ID systems will let you choose what information you expose to what person and at what level. The more anonymous data it has, the safer it will be. Blockchain systems will help curb the theft of identity and data by not sharing information with those who don’t need it or have permission to see it.

      Another aspect of blockchain technology is that it will shift fraud from where it happened (past tense) to where it is currently happening in real time. Within our current system, audits are fractional postmortems of what has happened. A group of outside auditors comes in, pulls a few random files, and sees if everything is in place. Doing anything beyond this is too costly and time-consuming.

Record systems that have blockchain technology integrated within them will be able to audit a file as it’s created, and flag incomplete or unusual files as they’re created. This will give managers the tools they need to proactively correct files before they become a problem.

      Another feature of blockchain systems will be their ability to share data with third parties transparently. In the future, sharing data will be as easy as emailing a Zip file, except the receiver will then have access to the original copy, not a copy of the file sent via email. When someone sends a file, they now have a version on their computer and the receiver has a version. With blockchain technology, the two people will be sharing only one version.

      Blockchains act as a third party that witnesses the age and creation of files. They can tell at a granular level each person who interacted with a file across systems, internally and externally. They can show what is missing from a file, not just the data that is contained in it now. Blockchain files can also be shared in a redacted fashion that does not compromise the validity of documents.

      What this means is that you’ll be able to see the age of a file, the complete history of a file, and what it looked like over time as it evolved. More interestingly, you’ll also be able to see if anything is missing from a file. This concept is called proving the negative. Most file systems at this point can only tell you what they have within them. But you’ll be able to tell what a file doesn’t have.

      Auditing will be less expensive and more complete. Audit rules could be updated in a more centralized way. When regulatory nodes within a blockchain network have a shared and transparent view into asset transactions, the reporting of these transactions can be done through the regulator’s location, without mandating 100 or more other institutions to adhere to the same rule set.

      Blockchain-based systems that are fully integrated across an organization will be able to know where every penny was spent. The last mile of how money is spent is the most difficult to account for across organizations and governments. Because it’s so difficult to account for, those wishing to steal funds have the opening they need.

      The last mile could become a company’s greatest opportunity to save wasted resources and identify corrupt individuals. Nonprofits that have strict guidelines on accounting for how they spend their money could benefit from this type of system the most. They could meet their needs for auditing and accountability to their donors without being impeded in their greater missions for good.

      One system that has been explored would integrate directly into the workflow of aid workers. This system was originally designed to track medical records but could also track back all the supplies that are used with each medical patient. The benefits of this system would be monumental, given that so much fraud and theft occur within the NGO world.

Book 3

      Bitcoin

Contents at a Glance

      1  Chapter 1: Bitcoin Tech Explained Understanding That There Is No Bitcoin! Discovering the Bitcoin Ledger Looking at the Bitcoin Distributed, Peer-to-Peer Network Using the Bitcoin Blockchain’s Blocks of Business Finding Out How the Ledger Functions

      2  Chapter 2: Buying, Using, and Selling Bitcoin Finding the Price of Bitcoin Your Options for Acquiring Bitcoin “Bitcoin Back” on Credit and Debit Cards Earning Your Bitcoin Mining Bitcoin Finding Bitcoin Everywhere Selling Your Bitcoin

      3  Chapter 3: Taking Control of Your Wallet (and Hodling Your Bitcoin) What Is a Wallet? Exploring Wallet Hardware Finding a Wallet Setting Up a Bitcoin Wallet Using the Lightning Network

      4  Chapter 4: Keeping Your Bitcoin Safe Understanding How You Can Lose Control of Your Bitcoin Grasping the Goal: Private Key and Seed Protection Making a Choice: Custodial or Private Wallet? Devising Your Cryptocurrency Safety Plan Exploring More Ways to Protect Your Bitcoin (and Everything Else) Knowing What Happens When You Kick the Bucket