What is Bitcoin
Think of a Bitcoin as a dollar and Satoshis as pennies.
Bitcoin is basically digital money that anyone, anywhere, can use, without the need of banks or third parties. Its value and price is derived by supply and demand, just like anything else in this world. Bitcoin scares governments, banks, and big institutions, as they don’t control it and, if people use Bitcoin over, say, the dollar, it could take power from these institutions.
Bitcoin was created by a person or group of people named Satoshi Nakamoto in 2008 and launched for the world to use in 2009. No one knows who Satoshi is. What we do suspect is that Bitcoin was created to combat or disrupt the global financial powers and networks we are all accus-tomed to using.
Bitcoin is a peer-to-peer digital currency that the user controls. The user can act as their own bank by holding this digital currency in an electronic wallet on their phone. The user can hold, spend, or receive Bitcoin anywhere in the world from their phone to pay for goods and services without the need of a bank or financial company. Banks or services that hold your money or give you access to it via our traditional financial system can freeze your money or take excessive fees for giving you access to it. This is not the case with Bitcoin and some other cryptocurrencies. You act as your own bank; you control your funds.
Think of it as sending credits to people from one smart-phone app to another without anyone in between the sender and receiver.
Many people, however, don’t spend Bitcoin. They simply hold on to it, as they think it will appreciate in price due to its scarcity.
Bitcoin is scarce. There will only be a total of 21 million Bitcoins ever and 5 to 6 million may have been lost for-ever. This means there is not enough Bitcoin for everyone. However, Bitcoins are made up of 100,000,000 Satoshis. Think of Satoshis as pennies and Bitcoins as dollars. Satoshis give people a way to spend their Bitcoin without having to spend an entire Bitcoin. And even though there are not enough Bitcoin to go around, there are enough Satoshis.
Bitcoin has gone from being worth pennies to twenty thousand dollars in value, then down to three thousand, then back up to ten thousand dollars. It’s very volatile and the prices swing greatly due to many external factors. But it’s also seen one of the highest returns on investment the world has ever seen in any asset class. Thus many simply hold on to it versus using it for goods and services.
All of the transactions used on the Bitcoin blockchain are transparent for the world to see and immutable, as no one can reverse or change these transactions. Bitcoin uses a decentralized blockchain to operate. This is where it gets confusing for many. What does centralized mean? What’s decentralized? What is blockchain? And is decentralized really decentralized if people can change things? I’ll dis-cuss each of these topics in the most digestible format I can by using stories and leaving the science and intrica-cies out.
“First, [Bitcoin] is the most secure transaction settlement layer in the world, so it’s got to be worth something […] it’s the best performing asset class over the past ten years — it’s out-performed S&P, DOW, NASDAQ, etc. during the longest bull run. It experienced two 85 percent drops during that time, but [it’s] still up over 400 percent in the last two years.”
— Anthony Pornpliano
What is Blockchain
Think of blockchain as being the network, and crypto being the “stuff” that’s sent on or through the network
Here is a very easy way to visualize how the Bitcoin block-chain works in its most simple instance. This leaves out some of the complexities, but those aren’t important to people trying to get a basic understanding.
Picture those old school rail carts with the open tops that workers would throw rock or coal in. Imagine it’s on a rail-way, and the carts can only go forward. Can’t visualize it? Think of the scene from Indiana Jones and The Temple of Doom where they are racing down the rails in one of those open-top carts with crazy people trying to kill them and overthrow their cart.
Each of these rail carts is a block, and there are miners on the side of the railway throwing confirmed transaction data from various users — what was transacted, who it was sent to, and when it was sent — in each of these carts. When one cart is full, a new cart is created and attached to the previous cart. The miners continue throwing the newest transaction data in that cart. Each miner is rushing to throw as much true user transaction data as possible in each of these carts, always trying to be the miner that throws the most true data into the carts. The carts are al-ways going forward, never backward, and, once approved, the miners can’t change what they had previously thrown in one of the blocks or carts.
Everyone in the world can see what’s in these carts or blocks, as they are transparent with an open top. We can see what’s what and who did what in each of the carts/ blocks. The majority of miners agree to what’s been thrown in each of these carts and agree to the rules of the railway and how the whole system works.
Sometimes, though, the miners disagree with each other on how much data they can throw in a cart/block or how fast they want the carts to go, so they fork the railway. They basically copy the existing cart and rail system and Put it on a new track all of their own. Some miners stay with the old track, and some miners move over to the new track system. Sometimes the majority of miners have a problem with a current cart and rail system and decide to upgrade it by making a copy of it, adding the upgrades and new features, and then putting it on a new railway. These types of changes are called forks. A fork can occur anytime miners want something different or where they want to fix or upgrade the old system. We see this time and time again. For example, with Bitcoin, some miners wanted bigger carts, so they forked the railway-blockchain and made Bitcoin Cash. Some miners stayed with the old cart system called Bitcoin while the other miners moved to a new rail system called Bitcoin Cash.
Bitcoin Cash added bigger carts so miners could add more data to each cart, making it faster and cheaper to get the carts and data out for the customers.
Remember that I said I would try to make this simple. I’ve left out things like validators and core programmers and haven’t explained in great detail why these things happen. I’ve left out information on the huge computation power the miners use and the huge amounts of electricity it takes for the system to operate properly. For people who really want the nuts and bolts of how this works, look into what is called “Proof Of Work.” This is the operating system, so to speak, that Bitcoin uses. “As much as 73% of Chinese enterprises believe that blockchain is a top-five strategic priority, according to a rePort by Big Four audit and consulting firm Deloitte re-leased on June 27.”
What is Cryptocurrency
Think of cryptocurrency as different types of digital currency or credits.
Cryptocurrency is basically a digital currency that uses cryptography (the conversion of data into a format that unauthorized users can’t read) to help with its digital security. The word “crypto” comes from the underlying cryptography technology. Explaining this in detail would take a book unto itself. For further explanation on how cryptography is used in cryptocurrency, check out YouTube videos on the subject or read Andreas M. AntonoRoulos’s books Mastering Bitcoin and The Internet of Money.
The blockchain allows people to send cryptos to other people without the need of a bank, as previously mentioned, anci this appeals to a lot of people. Just like you can pass a dollar bill to your friend, you can pass a digital dollar to your friend’s phone.
Sometimes these digital currencies become worthless. as people stop working on the blockchain or the public loses interest in the blockchain or crypt° itself. But sometimes these cryptocurrencies become very valuable and the people holding them see a profit.
There are many use cases (situations a Product or ser vice could potentially be used for) for crypt° outside speculation.
Let’s start with stable tokens or stable coins. These crypt° currencies are typically backed by one dollar of real money or real assets.
Next. imagine you are a Bitcoin Holder, and you think the price is going to go up. Would „Root to spend something like Bitcoin on a three-dollar cup of coffee? Would you spend Apple stock on coffee? Whatif Bitcoin ends up being worth 100 times what it’s worth now? That could be a $300 cup of coffee. You know you, be at least a little sad. Now imagine you used three dollars of stable tokens for the coffee. You could rest easy knowing that today, tomorrow, and the next day, it’s still going to be worth close to three dollars.
There are also what are called security tokens, which peo-ple can “back” with a percentage of an asset like a stock, house, or artwork. Each token could be worth a percentage of the stock or house it represents. Think of these as digi-tal tokens that have ownership in the underlying business or asset, much like a stock in traditional markets.
Utility tokens are tokens that are supposed to be used within a blockchain network to operate the system. They are designed like the Starbucks points you use to buy or get price breaks on Starbucks drinks. You wouldn’t expect these to go up in value but many do, as Bitcoin itself has been classified as a utility coin and has seen over 400% gains this year alone.
Per the data collected from global statistics portals, the Bitcoin network posted $1.3 trillion worth of transactional volume in 2018. Within the same timeframe, PayPal recorded $578.65 billion worth of payment transactions. It was the second time in a row Bitcoin outran PayPal, In 2017, the digital currency network had posted 543.52 billion more transactional volume than the global firm
What is NULS
NULS is a blockchain with a modular based architecture enabling customizable modules and cross-chain operability. Its two-part design is the micro-service and the functional modules. They have been built with the goal to maintain the well-known programming practice of high cohesion and low coupling. They also adopt the hotpluggable principle allowing modules to be added or removed during operation. The decentralized nature of NULS allows for a business model that bridges the gap of trust in using the technology as well allowing users to customize their side-chain to fit with their requirements. The simplicity of implementation comes from the architectural design of NULS where complex concepts such as cryptography,
consensus mechanisms and storage methods are abstracted away from the
developer, so they need only to be concerned with what they want to build that is within their skillset.
The simple base of the main-chain will provide a set of modular components that can be customized to the users’ needs. Users will be free to choose their preferred consensus mechanism, network, account, ledger, block management, chain management, transaction management, event bus as well as other permissions to designate to their chains. Chains are not limited to being public chains but can also be designed as private or consortium chains.
Why was NULS Created?
Blockchain uses the chain structure which is limited in performance due to the size of the database, and difficulty lies in synchronization and the complex task of performing technical updates on a decentralized network. A blockchain was needed that not only solves real world problems but also makes the developer’s work easier. The ability to customize modules to suit the developer’s needs promotes their individual innovation and does not constrain the possibilities of what can potentially be built. To solve these problems and promote the commercial use of blockchain technology, NULS was designed.
After conducting market research and analysis, we found that there are various problems that hinder the growth and development of blockchain. Talented individuals in the IT sector are already hard to come by and developers who are additionally experienced in blockchain is a rarity. This creates a higher cost for development as these individuals can charge a premium in exchange for their services due to the simple economic function of demand exceeding supply. This issue Make the Blockchain Simpler 5 / 15 cannot be solved in the short term and will only be solved over time as more developers learn and understand the technology. Existing blockchains are limited in performance and cross-chain communication is still being explored. Organizations and businesses will not be interested in using a consortium or private chain that isn’t completely trustworthy. NULS can provide a reliable solution to these problems.
Nuls Whitepaper — You can find it at nuls.io