Patrick has spent most of his adult life working on cryptocurrencies and his time was split across academic research and industry.
Basics of digital signatures
A commitment scheme can protect the integrity of transmitted data, but it does not attest to its authenticity. Put another way, we need a mechanism to allow the sender to endorse the transferred data and for the receiver to verify this is indeed the case. The solution is to use digital signatures.Brief recap on digital signaturesAs mentioned in our previous article, digital signatures rely on public key cryptography and every user is responsible for generating their own key pair:Public key PP...
Basics of digital signatures
A commitment scheme can protect the integrity of transmitted data, but it does not attest to its authenticity. Put another way, we need a mechanism to allow the sender to endorse the transferred data and for the receiver to verify this is indeed the case. The solution is to use digital signatures.Brief recap on digital signaturesAs mentioned in our previous article, digital signatures rely on public key cryptography and every user is responsible for generating their own key pair:Public key PP...
Basics of hash function and their usage in cryptocurrencies
In a cryptographic commitment scheme, the sender can commit to a chosen value (or chosen statement) while keeping the value hidden from others. At some point in the future, the sender can reveal the value and the recipient can test whether it matches their commitment. This is useful as the sender can prove they know something long before it is publicly revealed. If we think of a commitment scheme from an engineering perspective, it empowers a receiver to independently test whether they have r...
Basics of hash function and their usage in cryptocurrencies
In a cryptographic commitment scheme, the sender can commit to a chosen value (or chosen statement) while keeping the value hidden from others. At some point in the future, the sender can reveal the value and the recipient can test whether it matches their commitment. This is useful as the sender can prove they know something long before it is publicly revealed. If we think of a commitment scheme from an engineering perspective, it empowers a receiver to independently test whether they have r...
Mental models for L1 and L2
Cryptocurrencies are leading a paradigm shift in database technologyThe cornerstone of a cryptocurrency is the database. It records the account balances of all users, smart contract code and state. Any action performed by the user is eventually reflected by executing a transaction and updating the database. The problem with “Web2” database technology is all the trust that makes it work. It relies upon a trusted third party to maintain and protect the database. If they go offline, then all acc...
Mental models for L1 and L2
Cryptocurrencies are leading a paradigm shift in database technologyThe cornerstone of a cryptocurrency is the database. It records the account balances of all users, smart contract code and state. Any action performed by the user is eventually reflected by executing a transaction and updating the database. The problem with “Web2” database technology is all the trust that makes it work. It relies upon a trusted third party to maintain and protect the database. If they go offline, then all acc...
Who are the block producers?
At heart, all early e-cash protocols had to find and appoint a broker to support the issuance (and redemption) of coins. However, the search for an appropriate broker plagued and hindered the adoption of e-cash. There are many reasons for financial institutions to avoid taking on the role including:Regulatory red tape,Financial and reputation risk,Lack of understanding or appeal (“why not credit cards?”).Satoshi Nakamoto’s core innovation was to replace an appointed broker with an open-member...
Who are the block producers?
At heart, all early e-cash protocols had to find and appoint a broker to support the issuance (and redemption) of coins. However, the search for an appropriate broker plagued and hindered the adoption of e-cash. There are many reasons for financial institutions to avoid taking on the role including:Regulatory red tape,Financial and reputation risk,Lack of understanding or appeal (“why not credit cards?”).Satoshi Nakamoto’s core innovation was to replace an appointed broker with an open-member...
What is a smart contract?
In 1997, Nick Szabo published a blog about the idea of smart contracts to embed contractual clauses in software. He envisioned a future where all sorts of valuable property will be controlled by digital means:"Smart contracts reference that property in a dynamic, proactively enforced form, and provide much better observation and verification where proactive measures must fall short. And where the vending machine, like electronic mail, implements an asynchronous protocol between the vending co...
What is a smart contract?
In 1997, Nick Szabo published a blog about the idea of smart contracts to embed contractual clauses in software. He envisioned a future where all sorts of valuable property will be controlled by digital means:"Smart contracts reference that property in a dynamic, proactively enforced form, and provide much better observation and verification where proactive measures must fall short. And where the vending machine, like electronic mail, implements an asynchronous protocol between the vending co...
