From f521a46225b4dffee12e1782f9222767ce2d2145 Mon Sep 17 00:00:00 2001 From: Michalis Kargakis Date: Wed, 20 Aug 2014 02:54:20 +0300 Subject: [PATCH] Add more missing commas --- ch09.asciidoc | 14 +++++++------- 1 file changed, 7 insertions(+), 7 deletions(-) diff --git a/ch09.asciidoc b/ch09.asciidoc index 45b3da9c..efc37147 100644 --- a/ch09.asciidoc +++ b/ch09.asciidoc @@ -1,9 +1,9 @@ [[ch9]] -== Alternative chains, currencies and applications +== Alternative chains, currencies, and applications Bitcoin was neither the beginning nor the end of the digital currency evolution. It came from twenty years of research in distributed systems and currencies and brought a revolutionary new technology into the space: the de-centralized consensus mechanism based on Proof-of-Work. The invention at the heart of bitcoin has ushered a wave of innovation in currencies, financial services, economics, distributed systems, voting systems, corporate governance, and contracts. -In this chapter we'll examine the many offshoots of the bitcoin and blockchain inventions, the alternative chains, currencies and applications built since the introduction of this technology in 2009. +In this chapter we'll examine the many offshoots of the bitcoin and blockchain inventions, the alternative chains, currencies, and applications built since the introduction of this technology in 2009. For every alt-coin mentioned in this chapter, 50 or more will go unmentioned, eliciting howls of anger from their creators and fans. The purpose of this chapter is not to evaluate or qualify alt-coins, or to mention the most "significant" ones based on some subjective assessment. Instead, we will highlight a few examples that show the breadth and variety of the ecosystem, noting the first-of-a-kind for each innovation or significant differentiation. Some of the most interesting examples of alt-coins are in fact complete failures from a monetary perspective. That perhaps makes them even more interesting for study and highlights the fact that this chapter is not to be used as an investment guide. @@ -13,11 +13,11 @@ With new coins introduced every day, it would be impossible not to miss some imp Bitcoin is an open source project and its code has been used as the basis for many other software projects. The most common form of software spawned from bitcoin's source code are alternative de-centralized currencies, or _alt-coins_, which use the same basic building blocks to implement digital currencies. -There are a number of protocol layers implemented on top of bitcoin's blockchain. These _meta-coins_, _meta-chains_, or _blockchain apps_ use the blockchain as an application platform or extend the bitcoin protocol by adding protocol layers. Examples include Colored Coins, Mastercoin and Counterparty. +There are a number of protocol layers implemented on top of bitcoin's blockchain. These _meta-coins_, _meta-chains_, or _blockchain apps_ use the blockchain as an application platform or extend the bitcoin protocol by adding protocol layers. Examples include Colored Coins, Mastercoin, and Counterparty. In the next section we will examine a few notable alt-coins, such as Litecoin, Dogecoin, Freicoin, Primecoin, Peercoin, Darkcoin, and Zerocoin. These alt-coins are notable for historical reasons or because they are good examples for a specific type of alt-coin innovation, not because they are the most valuable or "best" alt-coins. -In addition to the alt-coins, there are also a number of alternative blockchain implementations that are not really "coins", which I call _alt-chains_. These alt-chains implement a consensus algorithm and distributed ledger as a platform for contracts, name registration or other applications. Alt-chains use the same basic building blocks and sometimes also use a currency or token as a payment mechanism, but their primary purpose is not currency. We will look at Namecoin, Ethereum and NXT as examples of alt-chains. +In addition to the alt-coins, there are also a number of alternative blockchain implementations that are not really "coins", which I call _alt-chains_. These alt-chains implement a consensus algorithm and distributed ledger as a platform for contracts, name registration, or other applications. Alt-chains use the same basic building blocks and sometimes also use a currency or token as a payment mechanism, but their primary purpose is not currency. We will look at Namecoin, Ethereum, and NXT as examples of alt-chains. In addition to the Proof-of-Work consensus mechanism used in bitcoin, alternatives include experimental protocols based on Proof-of-Resource and Proof-of-Publishing. We will examine Maidsafe and Twister as examples of these consensus mechanisms. @@ -31,7 +31,7 @@ Meta-coins and meta-chains are software layers implemented on top of bitcoin, ei Colored Coins is a meta-protocol that overlays information on small amounts of bitcoin. A "colored" coin is an amount of bitcoin repurposed to express another asset. Imagine for example taking a $1 USD note and putting a stamp on it that said "This is a 1 share certificate of Acme Inc.". Now the $1 serves two purposes: it is a currency note and also a share certificate. Because it is more valuable as a share, you would not want to use it to buy candy, so effectively it is no longer useful as currency. Colored coins work in a same way by converting a specific, very small, amount of bitcoin into a traded certificate that represents another asset. The term "color" refers to the idea of giving special meaning through the addition of an attribute such as a color - it is a metaphor not an actual color association. There are no colors in colored coins. -Colored coins are managed by specialized "wallets" that record and interpret the metadata attached to the "colored" bitcoins. Using such a wallet, the user will convert an amount of bitcoins from uncolored currency, into colored coins, by adding a label that has a special meaning. For example, a label could represent stock certificates, coupons, real property, commodities, collectible tokens etc. It is entirely up to the users of colored coins to assign and interpret the meaning of the "color" associated with specific coins. To color the coins, the user defines the associated metadata, such as the type of issuance, whether it can be subdivided into smaller units, a symbol and description and other related information. Once colored, these coins can be bought and sold, subdivided, aggregated and receive dividend payments. The colored coins can also be "uncolored" to remove the special association and redeem them for their face-value in bitcoin. +Colored coins are managed by specialized "wallets" that record and interpret the metadata attached to the "colored" bitcoins. Using such a wallet, the user will convert an amount of bitcoins from uncolored currency, into colored coins, by adding a label that has a special meaning. For example, a label could represent stock certificates, coupons, real property, commodities, collectible tokens, etc. It is entirely up to the users of colored coins to assign and interpret the meaning of the "color" associated with specific coins. To color the coins, the user defines the associated metadata, such as the type of issuance, whether it can be subdivided into smaller units, a symbol and description, and other related information. Once colored, these coins can be bought and sold, subdivided, aggregated and receive dividend payments. The colored coins can also be "uncolored" to remove the special association and redeem them for their face-value in bitcoin. To demonstrate the use of colored coins, we have created a set of 20 colored coins with symbol "MasterBTC" that represent coupons for a free copy of this book. Each unit of MasterBTC is represented by these colored coins can now be sold or given to any bitcoin user with a colored-coin-capable wallet, who can then transfer them to others or redeem them with the issuer for a free copy of the book. This example of colored coins can be seen here: https://cpr.sm/FoykwrH6UY @@ -61,13 +61,13 @@ To demonstrate the use of colored coins, we have created a set of 20 colored coi ==== Mastercoin -Mastercoin is a protocol layer on top of bitcoin that supports a platform for various applications extending the bitcoin system. Mastercoin uses the currency MST as a token for conducting Mastercoin transactions but it is not primarily a currency. Rather it is a platform for building other things, such as user currencies, smart property tokens, de-centralized asset exchanges, contracts etc. Think of Mastercoin as an application-layer protocol on top of bitcoin's financial transaction transport-layer, just like HTTP runs on top of TCP. +Mastercoin is a protocol layer on top of bitcoin that supports a platform for various applications extending the bitcoin system. Mastercoin uses the currency MST as a token for conducting Mastercoin transactions but it is not primarily a currency. Rather it is a platform for building other things, such as user currencies, smart property tokens, de-centralized asset exchanges, contracts, etc. Think of Mastercoin as an application-layer protocol on top of bitcoin's financial transaction transport-layer, just like HTTP runs on top of TCP. Mastercoin operates primarily through transactions sent to and from a special bitcoin address called the "exodus" address (+1EXoDusjGwvnjZUyKkxZ4UHEf77z6A5S4P+), just like HTTP uses a specific TCP port (port 80) to differentiate its traffic from the rest of the TCP traffic. The Mastercoin protocol is gradually transitioning from using the specialized exodus address and multi-signatures to using the OP_RETURN bitcoin operator to encode transaction metadata. ==== Counterparty -Counterparty is another protocol layer implemented on top of bitcoin. Counterparty enables user currencies, tradable tokens, financial instruments, de-centralized asset exchanges and other features. Counterparty is implemented primarily using the OP_RETURN operator in bitcoin's scripting language to record metadata enhancing bitcoin transactions with additional meaning. Counterparty uses the currency XCP as a token for conducting Counterparty transactions. +Counterparty is another protocol layer implemented on top of bitcoin. Counterparty enables user currencies, tradable tokens, financial instruments, de-centralized asset exchanges, and other features. Counterparty is implemented primarily using the OP_RETURN operator in bitcoin's scripting language to record metadata enhancing bitcoin transactions with additional meaning. Counterparty uses the currency XCP as a token for conducting Counterparty transactions. === Alt-coins