Complete Course on Blockchain and Crypto Currency

1. Course Introduction: So blockchain matter worse and cryptocurrency, these are the most emerging technology right now. Even people lead landmass. Jack Ma, all these people are supporting the blockchain technology. Blockchain is like internet in 19, right now, we are at a very early stage of blockchain. So if you're really passionate about blockchain and Web 3, then you guys can build companies like Google, Facebook, Instagram in the blockchain world. So if you wanted to learn some basic concept of cryptocurrencies and blockchain like hash function, smart contract and consensus mechanism, then there's a very high chance that you can easily get a job in a multinational company. And that's why I created this course on blockchain metaphors and cryptocurrency so that you guys can understand some very basic concept like ledger to some advanced concept like consensus mechanism. Also, I am 100 percent sure if you honestly complete this course, you can have a very good understanding about blockchain technology. 2. Why Printing Money is a Bad Idea: Hey everyone, My name is now VIP and welcome to the new course on blockchain and cryptocurrency. Now before we start understanding about blockchain and cryptocurrency, we first have to understand about evolution of money, what is inflation, and about the financial crisis. The reason we are understanding about this topic is because these topic will help us build a very strong foundation about money economy in general. And why Bitcoin and cryptocurrency exists a default, please. Let's start this video by understanding about evolution of money. Now I know all of us hate about history, so I'm gonna cover all of these topic in just one video. And after that, we will talk about Bitcoin and cryptocurrency. Now the evolution of money started back in 9 thousand BC when we use to have this part of system where if you have a livestock and I have some crops, we can exchange both of these products together. And that was the barter system that we are using back in 9 thousand BC. That in one hundred, ten hundred BC we had our first metric in China than in 880, we had our first paper money in China than in 1860. Electronic funds transfer was invented in 1950. Credit card was discovered in 1967, first ETM was established in inland. In 1999, mobile banking was discovered, and in 2009, first Bitcoin white paper was released. Now you may ask why we need Bitcoin and cryptocurrency a default, please? Well, the simple answer is inflation. If you closely have a look, almost a fifth of all US dollar were printed in 2020. That is 20% of all US dollar were printed just in one single year, that is 2020. And that was because of COVID-19, the impact that the United States had in COVID-19. Now, what's the problem with printing money? Well, the biggest problem with bringing money is inflation. Let me simplify inflation by giving you a very simple example. Let's assume the price of one apple is one US dollar in 2010. If you print more and more money, the price will increase from $1 to maybe $2 in 2020. That is because of inflation, because the time you print more money and makes everyone rich, the price of goods will increase because the supply of that specific product, it's still limited. And we can understand that with the help of this coffee example as well. If you recall back in 1970, the price of coffee back in 1970 was twenty-five cents. In 2020, the price of coffee was around $1.59. So let me oversimplify inflation for you if you're still not able to understand it. Imagine you have 1 million goods in economy. Now these 1 million goods can be anything. These can be Apple, oranges, or a normal product like a mobile phone or anything. Imagine you have 1 million goods in an economy and you have $10 million of money supply in that specific economy. If you have 1 million good and 10 million money supplier in a specific economy, the average price of code is $10. Very simple. Let's see if the government will bring more money and they will increase the supply of money from $10 million to $20 million. Now the average price of code will increase from $10 to $20. This is your inclusion because the price or the average price of goods is now increased from ten to $20. That's a 100% inflation or increase in the price of the product. This it because you have more money flowing into the economy, but you have limited supply of product, and this will cause increase in the price of goods. But what's wrong with increasing in the price of the product, while this will decrease down the value of your money. Now because you have more money in the economy, this will cause increase in the price of the product because the goods you have in the economy, it's still limited. The demand will increase, but the supply will still remain the same. But what's wrong with increase in the price of the product? Well, the time you print more money, your money will lose out on its value. Imagine you had a normal citizen and let's say you have a $100 thousand in your bank account. And because the government is printing more money, this will finally increase the price of the product. Let's say if you have an inflation of 5% every single year, that means your money is losing the value by 5% every single year. And let's say you will have done hard work and you have somehow saved $100 thousand in your bank account. If you have a 5% inflation, your money will lose out on its value by 5% every single year. If you have a $100 thousand in first year, you will have $95 thousand by the end of that year. By the end of second year, you will have $90.25 thousand. By the end of third year you will have $85 thousand. Your money is losing out on its value because of inflation. And the main reason of inflation is by this because the government is printing more money. When we talk about currency, we talked about Viet currency via can't see is your local currency that you're using in your specific country. Let's say if you're living in the United States, you might be using US dollar. In UK, you might be using euro. These are all fiat currency or local currency that you're using in your country. Now, the problem with Viet Cong see is that banks can go bankrupt anytime. So if a bank is taking bad decision over time, or let's say they are issuing money to the wrong people and those people are defaulting, then if your money is there in any private bank, your bank and go bankrupt anytime. So many countries also have political instability. So let's say if one government ended up printing more money just because of some random XYZ reason. In fact, that happened in Venezuela as well, where the government was printing more and more money and the money was losing out on its value. And that's why these government can speed up your inflation. And if you have saved so much of money over the span of decades, then you can lose out on all its, all of its value if your government ****, wrong decision on your behalf. Also, Viet conceit have so many transfer charges and the speed is very slow because you have to validate the transaction every single dime if you are just transferring money from one country to another country. And that's why it, in 20082009, first Bitcoin white paper was released by some person or so-called anonymous person with the name Satoshi Nakamoto. But the main reason why Bitcoin was there at the first place was because of the financial crisis that happened in the US in 2007. In the next video, let's understand about global meltdown or financial crisis and how it gave birth to the bitcoin. 3. 2008 Financial Crisis and birth of Bitcoin: Hey everyone. This video, we're going to talk about the global financial crisis of 2008. Now, before understanding the global financial crisis, we first have to strengthen our B6 and we will build a very strong foundation and we will understand how the global financial crisis gave birth to the Bitcoin or any cryptocurrency. Now, the global financial crisis was caused by mortgage back security, also known as your MBS. And before understanding mortgage back security, we first have to understand few concept. We will understand about mortgage first, the different types of banks we have and bonds. Once we understand these three topic, then we will understand about mortgage backed security. Let's understand this topic of global financial crisis by understanding the process of buying a house. The reason we are covering global financial crisis in the bitcoin or cryptocurrency course. Because these things will help you understand the root cause of the problem with all these government and feared currency. So let's understand about the process of buying a house. So if you wanted to purchase a house, obviously you'll reach out to a bank and you will take a loan and you have to pay them monthly payment. And that's how you will Bolchoz a house or buy a house. Normally, people who are seeking to buy a house, they have to approach a retail bank and then they have to ask for a loan. Finally, you have to fill out the application form and then you have to submit that specific application form to the bank. Now obviously, the bank will check all of your credential and the borrower short pass the minimum criteria so that the bank and issue the loan. Let's understand about mortgage, the complete process of taking a loan from the retail bank and buying a house is known as your mortgage. Mortgage is an agreement between home buyers and bank. Once the homebuyer and bank sign agreement, so-called mortgage, the home buyers will agree to pay back the money to the bank every single month, so-called monthly payment. This monthly payment will include the principal amount, which is the total amount that you are taking from the bank to purchase a house and the interest that you have to be, let's say if you're purchasing a house in a $100 thousand, you also have to pay a certain amount of texts to that specific bank as well. So the payback is your principal amount and your interest. So basically a person who has a steady job or a business, or have a good income or a good credit score, will easily get a loan at a lower interest rate. On the other side, if you're someone who did not have a stable job or high-income, or if you do not have good credit score, you will still get alone. But the bank will give you the loan at a higher interest rate. That's the normal process of purchasing a house. And this process is there from last 2030 years. Let's understand about the different types of bank now, remember, adjust, building a strong foundation to understand the global financial crisis. When we talk about bank, we basically have two different types of bank. We have retail bank. And all these bank which lend money to borrowers are the typical example of retail bank. Then we also have investment bank. Now, all those banks which basically lend money to these retail bank are the investment bank. Normally these retail bank cell all of these small loans to these investment bank. And these investment bank will then get all of the monthly payment or returns from these customer directly. Let's understand about bonds. And bonds are fixed income and risk-free investment options that will generate a very predictable written. Now the reason why bonds will generate a very predictable return is because these bonds are backed by US Treasury Department. If you asked me about the basic function of bond, let's say if a US government wanted to build a very strong infrastructure, or let's say healthcare. They will raise capital from these different investment banks are normal people in the form of bond. And in return of those points, they will pay, those people are fixed interest. But if you look at bonds back in 2007, these points had a very bad return. They were giving are written off around 3.5%, which was very less. That's why these investment bank started buying these MBS or mortgage back securities. Now let's understand how these different investment bank started involving themselves in buying these mortgages. Let's understand that with the help of an example. So traditionally we all know that if a person who wanted to purchase a house, that person have to reach out to a bank. And basically then he will take a small loan burden off that loan. He had to pay a monthly payment. Which includes a very small portion of the principal amount and a bit of interest as well. Now these investment bank started purchasing these mortgages or small loan of different buyer from the retail bank. If you look at this specific diagram, normally a home buyer will basically take a small loan from the bank in the town of this small loan, a home buyer normally *** them a monthly payment. So these investment bank started buying the mortgage agreement from the retail bank and become entitled to receive the monthly payment from the borrowers. Now the only job these retail bank is to sell the loan to these investment bank. Why do these retail bank are selling their loans to the investment bank? Because all of these retail bank will now show 0 liability in their balance sheet. And because obviously these banks are now getting cash of their asset from all of these investment bank. But the question you might be asking why these investment banks started buying all of these different mortgage agreement from these retail bank. And the reason is now these investment bank started creating a mortgage back security by combining all of these mortgage agreement. But you may have one question in mind then, how exactly these investment banks make money? Well, these investment bank will simply club all of these mortgages together to form a mortgage back security, also known as your MBS. And then these MBS then created in the secondary market, and it will look something like this. Let me take the laser pointer. So you have your investment bank who is purchasing all of these individual mortgages from the video bank. And then these individual mortgages are now clubbed together to form our MBS, or mortgage back security, which is now traded in the secondary market as a form of investment, which means anyone who wanted to purchase these mortgage backed security, they can invest in that mortgage Flexicurity and then they will get written. Or maybe there will be a price appreciation. The way we voltages normal stock or equity in the market. Now all the borrowers who are paying monthly payment earlier to the bank, now they have to pay the monthly payment to these investment bank because obviously these investment bank now on those mortgages and they have formed a mortgage backed security by combining all these different mortgages together. Because these investment bank is now getting monthly payment or return from borrower. Obviously the price of this mortgage backed security will go up in the secondary market or stock market. You have all of these investor who is owning money because the price of that mortgage back securities going up because they are generating more and more monthly payment from the borrowers. Now because these investment bank started buying all of these individual mortgages from the retail bank. These retail bank started assuming loans to even not so credit worthy borrowers with a high chance of defaulting. Defaulting was not a big issue because there was an insurance company who will cover all of these borrowers defaulting on loans. And the risk of loss was only when a borrower fails to make payment so-called loan default. Now for the MBS market, this was not a problem. You may ask why? Because the property that was used as a collateral, that property can be sold to make up for the losses. Now let's look at the bursting of this housing bubble. Because those retail bank, we're issuing the loans to all those non credit worthy individual. These borrowers started defaulting on their loans, causing a drop in the pricing in the housing market. Now because their property value started becoming smaller than the mortgage value, this led to more loan defaults, leading to the more foreclosures this father brought down the real estate prices. Eventually, big investors like Lehman Brothers have no choice but to dump it at a lower price and they have to declare themselves as bankrupt. Then Wallstreet got a $1 trillion bailout doing this financial crisis. And the way by which you will get all of these bailout is by printing more money. And if you print more money, it will increase the inflation. And all the people who have on money from last 2030 ear, they are the one who will face these consequences. Because finally, the money that you have in your bank account that will decrease over time because the money is losing out in its value because of inflation. And that's when the Bitcoin journey started. In 2008, the Bitcoin was created and in 2009, the first Bitcoin transaction is recorded. In fact, there are so many interesting events that have happened so far. In 20101 person have exchange 10 thousand Bitcoin, which is now worth $64 million just to get a couple of bids on. Now because bitcoin was open shores and every single person can see the source code of Bitcoin in 2011, in-person created light coin, which is a little faster than Bitcoin. Then in 2013, the first Bitcoin ATM was launched in Vancouver in 2014. A couple of popular exchanges started coming in than in 2015, a person named vitality filtering created Ethereum in 2016 over in Argentina, accepted Bitcoin payment. And there are so many events that have happened so far, including the participation from big tech giant to multinational companies. And we'll talk about all of these events in the course as well. In the coming videos, we'll talk about all of these concept that you need to understand if you wanted to know more about blockchain or bitcoin. So concepts like how does a block is created in a blockchain? What do you mean by consensus mechanism? What is a digital signature? How exactly mining work in a Bitcoin blockchain. And we'll talk about all of these topic in the coming videos. That's why you will see this upcoming topic at the footer of this specific slide. Then we will also talk about the create soft money. And in this specific topic, we will compare Bitcoin with gold. We will also understand about this specific topic in the coming videos. 4. Bitcoin Vs Gold: Hey everyone, My name is now deep. And in this video we are going to understand how Bitcoin is the new digital gold and the recent few years, I have seen a lot of people who prefer purchasing Bitcoin instead of purchasing physical gold. And there are so many reasons behind that. Before we start understanding about Blockchain cryptocurrency or bitcoin. We first have to understand the difference between or how bitcoin is much more efficient than buying physical gold. So when we talk about money, money can have different forms. So let's say Bitcoin is also a form of money. Gold is also a form of money and all of us via currency is also a form of money. Whenever we talk about money, Money have some specific trait that will enable it to survive and thrive. Let's talk about all of these trade-offs and money. The number one create every single form of money. Half is scarcity. That means how much supply exist in the market or maybe will exist in the future. So you have a limited supply of Bitcoin. Currently you have a limited supply of gold, but we never knew maybe we end up discovering more gold in the future. With Viet currency, we can print unlimited amount of Viet currency like the US dollar, Euro, or any currency at such. The second characteristic or trait of money is verifiability. That means how simple it is for a normal person to verify the authenticity of that specific form of money. With Bitcoin, it is super easy to verify with Viet currency. It is also very easy to verify whether a piece of paper is real or not. With gold, it is little difficult to verify. Then you have divisibility. That means how easy it is to divide that specific form of money. We had currency is moderately divisible. Bitcoin is super. Bitcoin is very efficient in dividing. You can divide one Bitcoin into 0 zeros, zeros, zeros. You don't want to Bitcoin, and gold is little difficult to divide, then you have portability. How efficiently you can move that specific form of money from one place to another, please. Let's say if you have FUN million in Bitcoin, 1 million in gold, or 1 million in fear currency. It is super difficult for you to move $1 million worth of gold from one place to another place with Bitcoin, it is super easy with Viet can't see it is little difficult to move. Then you have Cesar ship resistance. That means how security can you store that specific form of money? Let's break down all of these topic one-by-one. And let's start a video with scarcity. That means how much supply that specific form of money have in the market, or maybe we'll have in the future. Let's start with gold. So right now we have limited amount of gold in this specific planet, but maybe in the future. Maybe one asteroid or psyche may have 101000 quadrillion worth of some precious metals like gold or any other metric. With Bitcoin, we only have 21 million supply of Bitcoin. And we will understand about this specific concept when we will discuss about the source code of Bitcoin and how exactly BitCoin work. We will understand about this specific topic, why Bitcoin only have 21 million supply, not the unlimited amount of supply. This one snapshot from this news media that shows that a giant called an asteroid have enough heavy metal to make everyone bilinear. And I think nasa was heading towards certain 2022. We're already in 2022. But let's see. But you got the point, gold, MY have unlimited supply in the future. Right now it is very much limited. Let's talk about the second trade-off money that is verifiability. That means how easy it is for a normal person to verify that specific form of money, whether it is fig or additional. If you look at gold, if you wanted to verify a piece of gold, you require these expensive machine to validate the trustworthiness. So you need these ultrasound machines and other sensor. In fact, 83 Nephi gold bars, which worth $2.8 billion in China, were reported and they had some cascading losses as well. If you look at Bitcoin, every transaction in Bitcoin is public, and it is easily verifiable using simple laptop or computer or mobile phone. With Bitcoin, it is super easy to verify. Gold is very difficult to verify because you need these expensive machine. There are many incident where so much offi gold was reported by so many different countries. Let's look at the third grade of money. That is your divisibility. That means how easy it is for a normal person to divide that specific form of money into smaller pieces. Let's talk about gold. Gold can be broken down into smaller pieces, but obviously, if you break down a complete goal into smaller pieces, it will have some pre-cut cost. And it's not a very efficient process to do so. If you look at Bitcoin, bitcoin can easily be divisible into handled million pieces, also known as subspecies. And it is super easy to verify that which piece is owned by which person in Bitcoin ledger because bitcoin that juries public. Let's look at the fourth trade-off money that is portability. That means how easy it is for you to move that specific money from one place to another place. With gold, it is extremely heavy and it's super difficult to move coal from one place to another place. In fact, there is an incident where Germany wanted to move $31 billion worth of gold is 743 tons of gold from Paris to New York. And it took them five years at the cost of $9.3 million to move that code from Paris to New York. But Bitcoin is super efficient to move any amount from one place to another place if you have enough liquidity on that specific platform and you can move within few minutes. Super easy. Let's look at the fifth grade of money that is worship resistant. How securely can you store that specific form of With Gold? Normally we store gold in large world with so many security guard and equipment. And it is super difficult to transport it from one place to another place because you have to do So many insurance contracts with insurance company and so many other processes. But Bitcoin, you can safely store this Bitcoin in a $50 hardware device. Or maybe you can write your private key on a piece of paper. And we'll talk about that as well in the coming videos then about what is private key? What is your public key? How exactly can you store your Bitcoins in a small hardware device? These are the major trade-off money. If you look at verifiability, Bitcoin can easily be verified. It requires some amount of effort to verify gold. And same goes with fiat currency because nowadays you have so much off feed currency going on in the market, then you have fungibility. That means how easy it is for you to exchange that money went between two different people. But Bitcoin, it is high with gold, it is high and p It is high. And that means all these three money can easily be exchanged between two different people. When it comes to portability, obviously, Bitcoin have high probability gold require so many security processes. That's why it has a low mortality and fee accounts. You have a high probability because you can transfer it from one bank account to a different bank account within few minutes. Then when it comes to durability, Bitcoin is not that durable because it is not widely adopted by a lot of people called is highly durable. And we had cancer is not that durable because if the government started bringing more and more money than it will lose out on its value. It comes to divisibility. Bitcoin is highly divisible. You can divide one Bitcoin and 200 million pieces. And then gold is not divisible because then you have to cut that specific goal into smaller pieces and you have pre-cut cost. And with Viet it is moderately, moderately divisible, then you have sphere how scarcity that specific trade-off money is with Bitcoin. It is highly scared because you only have 21 million Bitcoin. Gold is moderate and v, It is low, because any government can print as much as they want with established history. Obviously, Bitcoin is new in the market by gold is very old and Viet currency is also fairly newly established, then you have decentralization. So Bitcoin is highly decentralized. That means no person or government can control it. Gold is moderately decentralized because government has some level of control on it. And we, it is highly centralized because every single transaction is validated by government or authority. 5. Explain Blockchain like I'm 5: Hey everyone, My name is null leap and welcome to the blockchain course. Now this is the first video of this blockchain course. And if you're new to the blockchain than in this video, we will understand blockchain in the most simplest form. Now to understand this blockchain concept, we have to take an analogy where toolkits are exchanging gifts with each other. So let's understand this blockchain in the most simplest form. Let's say there are two friends, Mary and Alice. Let's say you are Alice and I am married. And let's say last night my father gifted me a toy. So in that case, I currently have a toy. But you don't really have a toy. So after doing some conversation, Let's say I really liked you as a person. So in that case, I gave my toy to you. So once I gave my toy to you, in that case, now you have a toy, but I don't really have a toy now. And this is pretty straightforward, right? Because previously, my father gifted me a toy and I had a toy, but because I gave my toy to you, in that case, we don't really need a third person to make this transfer for us. Because I gave my toy to you. I cannot give the same toy to someone else because I don't really have it anymore. But you can give it to homes wherever you wish to. In fact, they can also give it to whomever they want to and so on. The point is, you can easily claim ownership in these physical toys. So suppose instead of physical toy, now, I have a digital toy. But before giving you the digital toy, let's say I have saved millions of copies of this specific digital toy in my laptop, and then I can give it to every single kid on the Internet. Now the problem is sending digital toy is not same as sending physical toys. And this is also known as your double-spending problem, which is solved by blockchain. Before we understand that, let's see how can we solve this simple problem? Well, we can maintain a ledger in case if you do not know about a ledger, if you go to a shopkeeper and if you purchase something, they normally have an account book where they live, record all of these transactions that are happening. So let's say if you're purchasing a candy or maybe a non-book, the anomaly recording all of those transaction in their account book, and a nominal ledger will look something like this. So just like those people, we can also maintain a ledger. And anytime both of us share these assets with each other, or let say these digital toy with each other. We can record all of those transaction in this specific lecture. And let's say, or some third person like a Danny will be a charge of this specific lecture. You may think, okay, fine, this problem is now solved. Well, probably not. The problem is, who is this third person, Danny? And how do we know that Danny is not cheating and adding these two little toy to his girlfriend's account. In fact, why do we need a third person like Danny to involve in all the transactions that are happening between you and me. And that is why we will be using blockchain. Blockchain is nothing but a distributed ledger. That means every single person or every single node around the world who is running this blockchain technology will save the copy of this specific lecture and any time both of us to transaction with each other. The same transaction will be recorded in all the computer or let's say in all the system at the same time. So every single person is maintaining the copy of accounting book on their computer and all the transaction will be recorded in the ledger at the same time. That's the concept of blockchain because this is really tough to beat because now, then you cannot add toys that he doesn't have in his account. Because even if we add a fake transaction, it wouldn't match with everybody else's book because all of these lectures are connected with each other. So the main idea of blockchain is everybody who has a copy of the ledger on their system or computer. Maintaining these ledger copy by validating the transaction between two different people in Britain of validating these transaction and maintaining these copies. These people are getting report. And this is where blockchain technology and all of these toys that we were talking about are nothing but Bitcoin or any other cryptocurrency that you know. Now right now you have more than thousands of cryptocurrency. But the underlying technology, which is blockchain, is somewhat the same. And this is the over-simplified example of blockchain. In the coming video, we will understand what exactly blockchain is. There are so many advantages that are there with this blockchain technology. For example, this ledger or all of these transaction are visible to every single person. This is de-centralized. That means we don't really need a third person to maintain the balance for us. And this is also solving the double-spending problem. And it's a wrap, this is your blockchain technology and our Bitcoin was the first cryptocurrency that use this blockchain technology in real-world. But currently you have more than thousands of cryptocurrency. And the underlying technology that is blockchain is somewhat the same. In the next video, Let's go deep and understand about blockchain and other concept. 6. Fiat Currency vs Crypto Currency: From the last video, we had a good understanding about blockchain technology and we also oversimplified blockchain technology by taking an example of Toolkit while sharing digital toy with each other. Now when we talk about ledger, we have two different types of ledger. We can have a centralized ledger. This is the ledger that your bank is maintaining white now, if you're using a debit card or a credit card, or if you're doing any transaction with your bank, they are maintaining a centralized ledger where all the transactions are reported. Earlier, they were maintaining a ledger like this. Obviously, this is a very old method of maintaining a ledger. Then they started maintaining ledger in the form of Excel sheet or some other simple database. The way normally a bank work is that you deposit some amount of money in the bank, in written off, depositing that money, you will get an interest rate of, let's say, maybe two to 3%. And they issue loan to other people and they get a return or interest of around seven to 8% and they earn money on the difference of deposit interest to loan interest. And that's how these bank make money. Apart from just giving loans, these bank also have some other value added services. Like you can do bank transfer. You can poach it stalk, you can have call it rolls. And they have so many other value-added services. But if you look at the different types of ledger we have, every single bank is maintaining a centralized ledger. And when we talk about blockchain and cryptocurrency, blockchain technology are maintaining a distributed ledger. So older distributed ledger technology. Now the biggest difference between a fee at currency like dollar or euro, the way these banks are maintaining all of your transaction isn't decentralized ledger. In blockchain or in cryptocurrency, you have de-centralized ledger. And this is possible with the help of distributed ledger technology, also known as DLD. In distributed ledger, every single person who is running the node or who is running that specific blockchain will have a local copy in their own system. And that's why no single person control the blockchain or cryptocurrency. So the Bim, you transfer one Bitcoin from your wallet to your friend's wallet. Basically, you are recording that specific transaction across all the ledger who are running that Bitcoin blockchain technology. So let's say if you have maybe 10 thousand miners who is running this blockchain technology, your transaction will be recorded across 10 thousand computers at the same time. Anytime you do a transaction of either transferring a bit coin from your wallet to a different wallet, or maybe buying a Bitcoin from someone else. The transaction will be recorded every single time you do anything on blockchain technology at every single node or computer, Bitcoin have a decentralized ledger, which is Peer-to-Peer. That means you do not have any intermediary who can block your transaction. You don't really have to be any commission to any bank or government as such. And you do not need anyone's approval to facilitate transaction or to transfer any money from one person to another person. Also, it's a decent light system. That means it doesn't have any owner and it doesn't have any tampering or leakage because you have 1 million people running the same Bitcoin ledger at the same time. And every time a transaction happen, that transaction will be recorded at every single node or ledger, and every single person will also validate that specific transaction at the same time. Now we'll talk about all of these things down the line in the coming videos. That how all of these people verify the transaction at the same time. And in that video we will understand about consensus mechanism or 51% attack. We will look at the Byzantine generals problem and we have so many complex topic in the coming few videos, but I'm just giving you a high-level overview so that you can understand about blockchain and cryptocurrency. Let's understand about how exactly the blockchain technology work. As we all know, that blockchain is a ledger that stores information about the transaction in a distributed manner. Every single time you do a transaction, that transaction will be recorded by every single person who's maintaining the ledger. If two people are doing a transaction on the blockchain that will be recorded by the participant computers. Now these computers provide the computing power to constantly maintain this blockchain ledger and verify that these transactions are real or not. In the board of that, they normally get some form of Bitcoin, also known as Bitcoin mining. And we'll talk about that as well, that how exactly mining happens in Bitcoin and why these people who facilitate the transaction and verify the transaction get some amount of money. And we'll talk about that when we will discuss about mining. Indeed, such computers are also known as your nodes because each node maintains a full copy of the blockchain ledger. That's why I think one of the reasons Satoshi Nakamoto was so obsessed with decentralized currency or a currency which is not controlled by any bank or any government is, this is the famous comment that was written by Satoshi Nakamoto in a blog post. It was not a blog post. I think it was a community forum or something that root problem with the conventional currency is all the crust that is required to make it work. The central bank must be trusted not to debase the currency, but the history of Viet currency is full of breaches of that trust. Bank must be trusted to hold your money and transfer it electronically. But the land it out. In a views of credit bubble with a barely a fraction of reverse. This core. This statement was written by Satoshi Nakamoto in a public forum. In if normal fiat currency, you have to trust a lot of thing. You have to trust our app that you're using. You have to trust the commercial bank, the central bank, the Treasury, and the government. But Bitcoin, you do not really have to trust anyone because this specific lecture is maintained by every single person across the world. At the same time, you can look at the difference between fiat currency and cryptocurrency. Viet Cong Si is a physical medium of exchange. So if you have any paper note, you can just share it with anyone. Why cryptocurrency is a digital medium of exchange. That's the basic difference between prep programs can be a currency. That's why we call replicants see as digital currency because it doesn't have a physical or not of Viet currency represent bill and coins, while cryptocurrencies represent one private and public address. And we'll talk about that in the coming video that why a Bitcoin need a private address, and why a public addresses required to verify the transaction. And we will understand these two concepts when we will talk about digital signature, also Vietcong. So you have unlimited supply. The government can produce as much as they need. And we had a discussion about this problem in the first video, where if you print more and more money, it will increase the inflation or the price of the product, and that is bad for the economy. On the other side, very few cryptocurrency have limited supply. Like Bitcoin only have 21 million supply. It helium have a very limited supply. But in the recent few years you have so many spam cryptocurrency who have unlimited supply, who doesn't have a decentralized system, and you should avoid those type of cryptocurrency. I think there are I think there are very few good cryptocurrency and you should avoid other smaller cryptocurrencies as well. Then Vietcong see is issued by government. While cryptocurrency is produced by these different computers were constantly solving problems and they are verifying the transaction. In Freetown of that, they will get a small commission or a small Bitcoin or any cryptocurrency. And we will understand about that when we will discuss about mining. Also Viet Cong suits centralize. That means it is controlled by law and banks, which is your central bank. On the other side. Proton C is decentralize and no single person, government or entity control it. I mean, they can block it, they can just put a ban on it. But the country we control it in Viet consider value is determined by the market and regulation volume cryptocurrency. The value of that specifically programmed C is determined by supply and demand. And we have seen that in case of Bitcoin because you have Betty less Bitcoin while yet to mind, and that's why the price of Bitcoin, it's skyrocketing. Now so many people are confused between Blockchain cryptocurrency and Web three. Let me oversimplify these three terms for you so that you can understand that what's the difference? You have your decentralized ledger technology that is used by blockchain. And with the help of blockchain, you can transfer these cryptocurrency from one person to another person. Apart from transferring these cryptocurrency or any form of digital asset, we can also do so many things with the help of blockchain or digital ledger technology, like LFTs, you also have smart contract, can do a lot more with the help of blockchain. Cryptocurrency is just one small part of blockchain technology. Blockchain technology is possible with the help of distributed ledger technology. And all of these things make a bigger circle called Web three. And when we talk about Crypto, Crypto is made up of blockchain, which is secured by cryptographic hash function, also known as your SHA256. And we will discuss about this function y SHA-256 is used to create these digital signature, and we'll talk about that in the coming video. So you have these different types of currency, also known as cryptocurrency like Bitcoin or Ethereum or light coin or any of the coin as such. You have blockchain technology, which was used for the first time to transfer the currency from one person to another person. That's why people are a bit confused between blockchain and cryptocurrency. But blockchain technology was first used by Bitcoin to transfer money from one person to another person. 7. What is Block in a Blockchain ?: In the last few videos, we had a discussion about blockchain technology. And blockchain technology is made up of these individual blocks who are interconnected to each other. And let's discuss about a single block. Why a single block is so important and what is there inside a single block in a blockchain technology. This is the first genesis block. Genesis block is the first block of the blockchain technology. This is the genesis block of Bitcoin. You can look at the genesis block of Ethereum or any cryptocurrency. And this is the first block that was ever created with for Bitcoin. Now in reality, the blockchain technology was discovered back in 1995 or 1992. But in 2008, this blockchain technology was used by Satoshi Nakamoto in creation of Bitcoin. If you look at this specific diagram, you can see that all of these blocks are interconnected to each other and that's how they form a blockchain technology. The first block which is there in this specific blockchain, that is your genesis block or starting block. Over time. That time you have more transaction that you need to record in this specific blockchain, you will store those transaction inside a block. So maybe one block, main store, let's say 7 thousand transaction or 10 thousand transaction. And then these blocks will be interconnected to each other with the help off, with the help of a hash function. A blockchain technology is the gene of data block, and each block can be taught as a page in a ledger. So every time you have more transaction, a new block will be created and add it to the complete blockchain. You cannot remove the previous block, and we will understand that in the next slide. But before that, let's break down one single block and let's see what all is there inside this specific block. If you look at a block, a block have a block head and a block body. You have your block header that contains the block number, the previous hash, the Merkle root, the nonce, and the timestamp and block body contains the data. Let's look at this with the help of this special analogy called truck analogy. Let's say in truck you have of the cockpit of the truck and you also have the body of the drug. This cockpit of the truck is your block header. So let's say this cockpit of the truck will contain all the information like where exactly this truck is going, what all is there inside the truck? The driving license, the paper of the item that is there inside this specific drug. So cockpit of the drug, which is the header of the block, contains all the information like the block number, the previous block hash, the Merkle root, the nonce, and the timestamp. While the body will just contain the data or all the material that this specific truck is transporting from location to location B. That's how your block is gonna look like. Your block has a block header and a black body and block body contains all of this data. If you look at the individual block, or individual block is composed of several components. And these can be differentiated into a head of the block, so-called block header and block body, if you look at the block header or head of the block is divided into six components. It contains the version number of its software. So let's say this block header will contain what version of that specific cryptocurrency you are using. It contains the previous hash. Remember blockchain technology is interconnected to each other. The next block always contain the address of the previous block so that you cannot remove the previous block. That's why the block header will contain the hash of the previous block. And we'll talk about this specific hash in the coming video. How exactly these hashes created every time you create a new block. This specific block in a blockchain technology contain a hash of the previous block, the root hash of the Merkle root. The time at which this block is created, the goal of the current problem and the nonce. And we'll talk about all of these things in the coming video. But I'm just giving you a very high level overview of blockchain technology. In the coming video, we will understand about all these things like your Merkle root hash of previous block. And the block header plays a very important role in Bitcoin because it connects all the block together. And when I'm saying Bitcoin, I mean every single cryptocurrency. And the reason I'm replacing Bitcoin with all other cryptocurrencies is because Bitcoin is very famous and it is widely. You can imagine this block as the cockpit octave drug, which contain all the information or the important paper. Then if you look at the block body that basically contain all the data that you need to store in that specific block. The block body is a ledger that store all of these data lake the amount of money that you have transferred from one person to another person. And this block can store any data leather, let's say in case of Bitcoin, you wanted to store the bees different transaction. In case of Ethereum, you can store any of the information or God or smart contract. You can also store a digital certificate of ownership. You can store a vote. You can store whatever information that you want inside this block body. In case of Bitcoin, the double doors were just simple transaction happening between two different addresses. In case of Ethereum or any other cryptocurrency, you can store whatever information you want. But then you have to increase the block size because now you are storing more and more information inside one single block. The block body is convinced bubble as loading space of a truck. It contains all the transaction that are confirmed. The block these blocks are created by minor, by validating the transaction. And these minor, we'll look at the past data and then how they will facilitate the transaction and validated. Now as we all known, these blocks are interconnected and that's why the block that will be created for the first time will be connected to the previous hash or the previous block. That's why we call this as blockchain, not a blog group or not any other technology. If you have these three block, let's say this is the genesis block. Genesis block is the first block of that specific blockchain technology. And then these block are now connected to each other with the help of previous hash, you have your hash function. This hash function will act as a previous hash of this block. And this hash function of this block will act as a previous Ashford this block. So every single block is connected to each other and you cannot remove a single block because then this blockchain will become invalid. And even if you will try to change the address or the previous hash of one-block, the complete blockchain will become invalid. And it will look something like this. Let's say if one person wanted to do some fraud and wanted to change the address of this specific block. The complete blockchain will become invalid because now he had to redo all of these calculation by himself and other minors or people who are maintaining the node will not accept this blockchain in their own ledger or system. And we'll talk about that when we will discuss about mining consensus mechanism in the coming videos. Now there are other confusing topic in the blockchain technology that I don't really want to cover as of now. When we will go forward, we will cover about all of these concepts as well, like a Merkle root your transaction has. But right now I think these topic will create more confusing to you. So I'm going to cover this topic when we will discuss about digital signature consensus mechanism in the coming videos. So if I summarize the blockchain technology, blockchain technology is basically the collection of records or block that are linked to each other. And you cannot remove or delete a specific block because these blocks are connected to each other with the help of previous hash. And these blocks are protected using cryptography. That means no one person controls the blockchain technology and you cannot remove the block. And also you have to validate every single transaction that is happening inside this blockchain technology. And we will study about that in the coming videos. 8. What is Bitcoin (Crypto currency): Now before we jump directly into digital signature, consensus mechanism and some advanced concept in the blockchain. Let's discuss about the most famous blockchain technology that is your Bitcoin. We will discuss about Bitcoin in general so that you will have a decent understanding about Bitcoin. After understanding the basics of Bitcoin, we will jump straight away into digital signature, consensus mechanism and how exactly BitCoin work with the help of blockchain technology. But first, let's build a very strong foundation by understanding some very basic concepts about Bitcoin. Bitcoin was the first cryptocurrency that was created back in 2008. The anonymous person named Satoshi Nakamoto. Bitcoin was the first example of blockchain technology. Nowadays, blockchain technology can be used by so many projects like Ethereum and maybe I think you right now, we have more than 10 thousand different cryptocurrency using blockchain technology. But Bitcoin is the world's most popular cryptocurrency, both in terms of market cap and dominance because Bitcoin is widely adopted by multinational companies and big tech giant. Because point have a limited supply of 21 million Bitcoin and you cannot create new midpoint because majority of the miners are still running. The first lecture that was created by Satoshi Nakamoto. And they are not ready to run a modified version of that specific ledger or let's say the hard folk version of that specific ledger, which is your light coin. So these are nothing but modified version of Bitcoin. We all know that Bitcoin was an open-source project so anyone can create their own version of Bitcoin. But those miners are still running that fast version of Bitcoin that was created by Satoshi Nakamoto. After that, I think a lot of people have created their own version of Bitcoin by changing the source code of Bitcoin. And we will have a look at the source code of a Bitcoin in the coming videos, and we will see how these different conditions are defined inside the source code of Bitcoin and how these people are running the same Bitcoin ledger or code on their computer because that has a limited supply of 21 million. So all the miners across the world are running the same Bitcoin code, del now that was created back in 2008. Bitcoin is inefficient. It's very slow, but they are still running the same ledger because that same source code have a 21 million condition. And after that you had maybe 10 thousand version of Bitcoin that have unlimited supply and so many things, but they are not running that specific source code. They are still running the first source code that was created by Satoshi Nakamoto back in 2008. If a normal person wanted to run the same source code, obviously it's difficult to do that with your own local system or computer because right now the ledger is very big and you need these ICSC machine to run the Bitcoin ledger. But if you go back in 201110 or maybe 2014, back then, the ledger was not very big and every single person can run the Bitcoin ledger in their own system. But right now it's very bulky. You need to combine multiple our computational power to run this Bitcoin ledger. So you just need to download a software or a Bitcoin source code in your system that was written on C plus plus. You can just run it on your own system. It will multiple problems or it will validate the transaction. And then you can transfer the cryptocurrency from your wallet to your friend's wallet. If you know the public key of your friend and you need to maintain your private key with you, also known as your secret key. And we'll talk about the complete process again in the coming few videos. We understand about the blockchain technology or especially the Bitcoin, the time you transfer Bitcoins from one person to another person or new transaction will enter into this specific blockchain. This specific transaction will then transmitted to a network which is Peer-to-Peer. That means no single person control this network. And these nodes are computers are scattered across the world. And then the network will solve a computational problem to validate the transaction, whether this transaction is right or not. And once this transaction is confirmed and approved by a majority of the people, which is 51% people, then this transaction will be recorded inside the block, and then these block will be connected to each other with the help of blockchain technology, and then that transaction will be completed. Now obviously in case of Bitcoin, the complete process will take maybe in 15 minutes. In case of other cryptocurrency, which is a little less decentralized aspect point. This may take maybe one or two minutes or even one or two seconds. It depends on how decentralize that cryptocurrency is. Now, cryptocurrency have so many characters trick, and we will talk about these characteristic in the coming videos. Every single blockchain technology or cryptocurrency is trustless, is, it's unstoppable, it's immutable. It's decentralize. When we talk about Bitcoin. Bitcoin have these characteristic and we will discuss about these characteristic in the coming videos. Not all cryptocurrency have these characteristic because recently in the past so many years, I've seen so many centralized cryptocurrency project, which is totally against the blockchain technology. I mean, the main purpose of blockchain technology is to make it less unstoppable, immutable, decentralize it should have lower cost. It should be Peer-to-Peer and it should be transparent and it should provide universal banking to every single person. But in the recent few years you will have some bad actors as well in this game. And we'll talk about that in the coming videos. 9. Introduction to Digital Signature: So in the last few videos, we had a discussion about inflation and about decentralized ledger technology. In this video, we will understand about blockchain technology and how exactly blockchain technology work. In this video, we are going to focus on digital signature. And I'm going to take a very simple analogy to help you understand about blockchain technology. But before that, let's understand what is Bitcoin and who created this cryptocurrency. So Bitcoin is a digital currency which doesn't require any bank or government as an intermediary. And Bitcoin was not created by one single person because bitcoin require you to have an understanding of all these different domain, like game theory, pre-programmed, see, mathematics and computer science. And it's super difficult for one single person to have an understanding of so many different domain. That's why Bitcoin was started by Satoshi Nakamoto. But the community which was there back then created this Bitcoin. And they also did so many improvement in the Bitcoin source code. So it was not created by one single person, but was created by a group of people who did so many improvement in this Bitcoin source code. But a lot of people believe that all those improvements were done by one single person. And that's why Satoshi Nakamoto or some anonymous person have published that specific source code for the first time in 2008. Now there are so many ways by which you can understand about blockchain technology. But in this video, I'm going to take a very simple example between all the transaction that happens between forefront. So currently let's say if you have four friends who are living in an apartment, you might be doing all of these transaction In your smartphone or with your fiat currency like US 1. Let's understand all of these transaction between four of these friends with the help of blockchain technology. Let's say there are four friends, Alice, Bob, and Charlie. And all these four friends are doing some transaction and then they are adding that specific transaction into this specific ledger. So anytime you purchase anything, you will add that transaction into this specific lecture. Let's say Alice pays Bob $20, BOC pays Charlie $40. Charlie piece you totally dollar, or let's say you are being Alice, $10. All the transaction will be added to this specific lecture. And by the end of the month, you normally tally up all of these transactions and settled through cash or your fiat currency, like US dollar or euro. And if you look at the protocol of this specific ledger, anyone can add or remove any transaction from the ledger, and by the end of demand, you will settle up with real money every single month. Now if anyone can add or remove any transaction into this specific ledger, well, that's a problem. And that's why if you trust your friend less and less, and if you introduce some concepts of cryptography, then you can build your own cryptocurrency like Bitcoin. Bitcoin was the first cryptocurrency that was introduced with the help of blockchain technology. That right now you have tens and thousands of cryptocurrency which are there in all of these exchanges like Coinbase or by an inch. But let's come back to our same ledger and let's solve the problem of adding or removing the transaction with the help of digital signature. Anytime any person added transaction into this specific ledger, they will validate that specific transaction by doing a small signature. Let's say Alice pays Bob $20 and Alice will do the signature. Bob pays Charlie $40, and Bob will do the signature, and Charlie pays $30 and Charlie, we'll do the signature. But the problem with this specific lecture is anyone else can duplicate or create the same signature and the same transaction. How will you stop other person to duplicate the same signature and same transaction? That's why instead of doing a normal signature, you will do a digital signature. When we talk about digital signature, digital signature is the combination of public key and private key. As the name suggests, public key is public to every single person and private key is private, and you have to keep it safe with yourself. You should not share your private key, but you keep your public key public so that people can transfer you the money, also known as your public Bitcoin address. Instead of doing a physical signature, now you will do a digital signature that is made up of ones and zeros. And this digital signature is made up of public key and private key pair. Remember, your private key is always a secret key and you have to keep it secret with yourself. But you can expose your public key. If you wanted to do a digital signature, you will write a message or a transaction with your secret key, and then it will create a digital signature. Then you will combine this digital signature with a public key, and then you will validate that specific transaction. Now our first problem, it's sold it for people, wanted to create a decentralized blockchain technology where they can put all of these transaction that they are doing on day-to-day basis with the help of digital signature. Now, anytime any person do a transaction, they will write this specific digital signature in front of the transaction. But it's still one problem. People cannot create a new digital signature, but they can still duplicate the existing digital signature that is written in front of the transaction. And that's why to solve this problem, now you have to verify this specific digital signature with the help of your public key. Let me take the laser pointer. Now as we all know that if you put a message or a transaction with your secret key, you can create a digital signature. Now to verify this specific digital signature, you have to combine this with message or your public key, and that's how you validate the digital signature by giving an output of true and false. Anytime Alice pays Bob $100, the situation will look something like this. You are paying Bob $100 by putting in your secret key. And that will create a digital signature which is 256 characters long. And the way you verify this specific digital signature is by passing in the message and your public key. And that's how you validate this specific digital signature by giving an output of yes or no. That means you are the only person who can combine your secret key or your private key along with your public key to validate this specific transaction. And this digital signature cannot be calculated backward. And we'll talk about that in the next slide. That means we are first creating a digital signature. And that specific digital signature is now verified with the help of your public key, and that's how you can validate this specific transaction. Now we have solved the second problem, and it is infeasible for anyone else to force the digital signature. So now every single time you do a transaction, you will have a unique digital signature that you cannot duplicate. Now, you will have all of these transactions that Alice pays Bob $20 and you will do a signature, Bowlby's Charlie, $40 and he will do a signature, and all of these signature will then be validated. And if we look at the protocol of this specific lecture, you will see that anyone can add lines to this specific ledger. And by the end of every single month, you will settle up all of these transaction with real money. Only the sign transactions are valid, but there's one problem. You still have to settle up all of this amount by the end of the month using real cash, using your fear currency, like dollar or euro, or any currency that you're using in your country. But what if Charlie overspend the money and do not settle in cash? Well, that's a problem. But the main problem is this external currency or PPE account. See that you have to use to settle the complete amount of the remaining amount by the end of this month. The solve this problem. Now, you have to introduce our internal currency for this specific technology. You can call this as Bitcoin or any cryptocurrency that you want. Now, all of these four people will put hindered dollar into this specific part. And every time you need any money or every time you do any transaction, you will take money from this spot and give it to other people. Let's say now you have $400 into this spot and Charlie on it to do couple of conception. Let's say the first transaction of Charlie is Charlie pays Bob $100, and let's say Charlie pays Alice $200 knob you have only a $100 into the board. But if Charlie tried to do this specific transaction where Charlie is being $200 too, you, then this transaction will be invalid because Charlie is overspending into this specific. Now the overspending problem is solved because you can only spend whatever amount that is there inside the port. You cannot overspend this amount. And we have removed the connection with US dollar or any feared currency and such. But nowadays you have so many exchanges which will help you swap one cryptocurrency with other cryptocurrency. So let's say if you have Ethereum and you wanted to purchase Bitcoin, you can swap these cryptocurrency on exchanges. You can swap your Bitcoin with stable coin, with Ethereum, with Solana, with Cardano. But the main purpose here is that this is available now. Previously we only had one cryptocurrency and you have to exchange that cryptocurrency within the ledger. But there's but it's still one problem. What if people tried to force this digital signature by going backwards? And to understand that security. What if people tried to force this digital signature so that they can go backward and they can change the transaction detail. To understand that in the next video, we will understand about consensus mechanism. 10. Hash function in crypto: Hey everyone. In this video I will show you how exactly all of these companies store some sensitive information like your debit card details or your password into their own database. Remember, all of these companies whose store your password or debit card information, they will never store all of these details in the original form. They use these hash function to chop and mix your password or your debit card details in such a way that it is impossible for anyone to get your original debit card or your password. And that's why they use this hash function which drop and mix your original input string, that is your input string. So this input string can be all a series of alphabet or number. And if you pass on this specific input string from your hash function, it will give you a digest or a hash. And that is super difficult to reverse calculate. And that is why a lot of people are so comfortable giving their password or username or debit card details to these companies. Because these people assume that these companies are using some sort of protection or security. And they might be passing on these TTL from some hash function or by using some salt so that they will get a value. And after that they will store this value in their own database. Remember, if you will store the original value in your database and somehow a hacker end up Hacking your database and he's able to extract all of these password, debit card details or input string in the original form, then you are done. And that is why all of these people store this hash function. So even if a hacker has the access to your database, it is super difficult for him to reverse calculate this hash or dices back to the input string. Now, if you only use hash function, that is one problem. So many people have very generic password like 12345 or password or admin or ABC123. And that is why you use one more thing that is your salt. So basically if you put some salt on a hash function, you will drop and mixed and you will also give it a flavor. And after that, it is super difficult to reverse calculate because now you have added a specific salt. Let's say if the original password is password, and if you're adding a salt, salt is a specific sequence of alphabet or number, and that sequence will drop and mix again with the password. So if you look at this specific incident, you have your password as your password. If you will add a salt to this password, it will create a password salt or like, let's say any random mix of combination. And if you pass on this password salt from a hash function, then it will create 64 characters long, dies. And now it is super difficult to find the password because you also have salt as well. And that is why then they cannot look at this rainbow table, which contain very normal password. And we had a discussion about SHA-256 in the previous video as well. Let's go to VS code and let's have a look at how exactly this hash function work in real life. But I quick disclaimer before we start doing anything in VS code. The main purpose of this video is not to teach you how to use a hash function, but to help you understand how these things actually work in the real world, let me create a JavaScript file we will be using. We will be using a built-in crypto module of NodeJS. So let me create a filename with hash dot js. So let me show you how exactly a hash function work in real life. And for this purpose, I'll be using the crypto module in Node.JS. So let me first create a hash, and I'll be using the crypto module that is built-in inside the Node.JS. And we will first start this process by creating a string hash. So it'll be creating a function that will take a hash input. Then I will return this input In create hash, and I'll be using SHA-256. You can also use other hashing algorithm as well if you want. After that, I will update this input with a digest in the hexadecimal format. Let me generate the hash password. Now. Imagine I wanted to save my password and into, and do a Save Database. So let's say I am taking my password as My name is null deep and let's say this is my normal password. You can take password in any string that you want. And let me create a const has one. We're taking const hash one that is equal to your hash password. And then I will console log that this hash one. And if you open your terminal and if you just simply run a node server, I will run my Node server. You can see that it is 20 million, our output which is 64 characters long. And this is your hash or desist. And if you again do the same process without changing anything, you can see that the output is always the same. Now, let's say if I will change just one letter from this or input, that is my string, input string. And if I do the same process again, you will see that the hash or the digest will change completely. And now you can see that the previous two hash or digest we're seen because we were training the same input or string. And I've just removed a single letter from this. Even a single change in the input will completely change the output. And you can see that with this specific example, we have just changed a single letter from this input and the output is completely changed. This was all about a hash function and how exactly has function will give you a random bits of output on the time you pass on any string of input. So even if you slightly change the sequence of the input, it will completely changed the output. And it is super difficult to reverse calculate if you mix in a salt as well. Again, we can do the same process over here as well, but again, this course is not designed for developers and that's why you do not have to do any of these things in the coming videos. The main purpose of this course was to help you understand how a hash function work in the real-world. And I will not be covering any of these technical topic in the coming videos because I understand ninety-five percent people who are watching this course or not from technical background. And those people don't really want to understand about these things in the actual code. 11. Introduction to Consensus mechanism: Hey everyone, In this video, we are going to understand about consensus mechanism. Now before we understand about consensus mechanism, we first have to go back to the same problem that we were solving. We have these four friends who are maintaining all of their transaction on a centralized ledger system. Now obviously, that centralized ledger system can be a mobile app, can be a website or anything. But these friend now have to maintain a de-centralized ledger system because they don't really want someone to control their ledger. That's why these four friends have now decided to maintain their own personal ledger, so-called de-centralized ledger technology so that anytime any friend do any transaction, that specific transaction will be broadcasted in all these four ledger at the same time. But this one problem, how these other three people will make sure that this transaction is real or fake. Well, to validate a specific transaction, we have to use the consensus mechanism. And this specific consensus mechanism. We'll solve a Byzantine Generals Problem. And we'll talk about Byzantine Generals Problem in the next video. But let's discuss about consensus mechanism and then you will understand why it is so important in case of blockchain technology. Now, consensus mechanism is basically a group decision-making process to support the decision for the best interest of the whole. In shorter consensus mechanism is used as a fault tolerant mechanism in the blockchain system, saw that everyone agrees on the necessary agreement among the distributed system. And consensus mechanism is there in almost every single blockchain, other it's a cryptocurrency or any other blockchain technology. So all these parties will agree on the same decision at the same time so that they can show the best interest, which is good for every single person in the group. That specific system have some dishonest people. All of the remaining people will reject their transaction. Let me oversimplify the consensus mechanism for all those people were understanding about this specific topic for the first time. Again, this is the oversimplified version of consensus mechanism. We will dig deep into the consensus mechanism down the line in the coming videos. When we talk about consensus mechanism, you have so many different types of consensus mechanism, like proof of work, proof of stake, proof of history. I think in 2022, you have more than 30 different types of consensus mechanism. But again, this is the oversimplified version of consensus mechanism. And let me oversimplify consensus mechanism so that even a five-year-old kid can understand about this specific topic. Because this topic is very confusing and complex. Suppose there are a bunch of kids in a kindergarten and all of these kids are maintaining a stack of wooden block toys. They also have the duplicates of the same stack. Now, they need to make sure that all of these blocks are seen and kept in the same order. So if someone wanted to add a new wooden block on the top of the stack, that wouldn't block is sent to all the kids to prove the solution or deposits that they are solving. Now all the kids who are trying to solve this specific puzzle or the mat problem is nothing but mining. Now solving this specific puzzle or the Mac problem also verifies that block is valid. The only way to solve this specific puzzle is by brute force and lock the first-person or the first kid who will solve this specific problem or puzzle, will receive one candy, also known as your mining fees in case of Bitcoin, Ethereum, or any other cryptocurrency. Now once the math problem or the puzzle is solved, it is super easy to verify the solution by arranging that on the top of the stack. So if more than 50% of the kid verify that this specific sequence of these wooden stack is correct, then all of them will add the block on the top of their block. And this will make sure that only the agreed block are added to this specific wouldn't stack and that's your consensus mechanism. That means every single kid is agreeing on adding the same wooden block on the top of this wooden stack so that they can solve this specific spasm or problem. That's the positive side of solving this specific problem. Imagine if a bad kid wanted to add or insert a bad block, but let's say he wanted to replace a good block that is accepted by all the kids into the stack, then he had to convince, or maybe he have to give some candy or bribe to more than 51% good to follow along. And again, redoing all the math puzzle for each of the blocks. On the top of block. Is going to be very costly and time-consuming. And that is why these consensus mechanism like proof-of-work and proof-of-stake will prevent these bad actors from tempering the blockchain technology. Because the time they wanted to enter a new block or a new piece of information to the existing stack, they have to convince every single person. That means they have to do a 51% attack. So in short, these consensus mechanism will ensure that a new block is added to the blockchain technology. And the example of this consensus mechanism is proof of work that is often referred in case of mining, Bitcoin and Ethereum use proof of work as the consensus mechanism in 2022, I think down the line in six more months, it TDM is going to replace its consensus mechanism from proof of work to proof-of-stake mining is not universal in all blockchain and mining is there in case solve all those cryptocurrency who is using proof of work as the consensus mechanism. Currently in 2022 Bitcoin it helium is using proof of work as the consensus mechanism. Now in the coming videos, we will understand about the difference between proof of work and proof of stake and why Bitcoin it's still using proof of work. Proof of work is a very inefficient and an energy consuming process, but it is the most CFS process and it is very much decentralize. And that's why Bitcoin is still using proof-of-work as the consensus mechanism. Or you can reframe it this way. All the people who are running the Bitcoin node or all the minor, they are still using proof-of-work as the consensus mechanism. Despite of having such a high transaction fees or such a slow process of transferring Bitcoin from one volume to a different wallet. And we'll talk about that in the coming videos. If I'll tell you about the characteristic of consensus mechanism, consensus mechanism will help you get a unified agreement of all the people by validating every single transaction. Also consensus mechanism will align the economic incentive because if every single person validate this specific transaction, no one can do any fraud. That specific blockchain technology, also consensus mechanism make the complete process fair and equitable. And this specific consensus mechanism will also prevent double-spending problem. And I think we had a discussion about double-spending in the first video. And these consensus mechanism, especially the proof of work and proof-of-stake, is fault-tolerant. Apart from proof of work and proof of stake, you have so many different types of consensus mechanism that you can use in your cryptocurrency. You have proof of capacity, proof of bond, proof of identity, proof of history. And I think recently so many new cryptocurrency have started using these different types of consensus mechanism. But again, we will be covering only two of the most important consensus mechanism in the coming videos. And in those videos we will talk about proof of work and proof of stake. Because I think after these two consensus mechanism, you will have a decent understanding about why we need consensus mechanism at the first-place and how consensus mechanism will solve the Byzantine Generals Problem. In the next video, we will talk about Byzantine Generals Problem. And we'll go back to our same situation and how consensus mechanism will solve the problem. In case of Bitcoin. 12. Proof-of-Work mechanism to solve Byzantine Generals Problem: Hey everyone. In this video we're gonna talk about consensus mechanism. Before we directly jump into consensus mechanism, we first have to understand the Byzantine generals problem because the whole cryptocurrency was created on the thesis of validating the transaction by every single person who is running the node. And that's why this video we have to understand about Byzantine Generals Problem. So that we can understand about consensus mechanism and how different people will validate the same transaction. At the same time. Saw that they can put the same transaction detail into their own specific lecture. Let's understand about Byzantine Generals Problem so that we can understand about the core thesis of consensus mechanism. But the main idea of having Byzantine Generals Problem is that how do you make sure that multiple entities which are separated by distance r in the absolute full agreement before action is taken. Let's understand this with the help of this example. Imagine the division of Byzantine army and they are attacking a complete and so-called CD. If they wanted to win this specific city, they have to have a coordinated attack, which will lead to the victory. If you have some uncoordinated attack, it will lead to the defeat. To proceed with this, the Journal of each division who is disposed around the city periphery must agree on the battle plan. While the uncoordinated attack, where some general wanted to attack while other general wanted to retreat, that will lead to the defeat. Now in order to achieve the consensus or agreement, the commanding general and the left-hand must agree on the same decision. The problem is that these generals are so far apart that you need a messenger in order to communicate the information to these general. Now there is a chance that in one or more left in it may be a creator who's intending to sabotage the situation. Now, apart from these left in some lower left-hand will always do what the algorithm C, but Traders can do anything that they wish. So we have to create an algorithm which must guarantee the first condition regardless of what the creators to. Now the lower-left renamed should only reach an agreement, but should agree upon a reasonable plan. Well, let's come back to our same example where all these four people are maintaining these transaction into a specific ledger and they're taking money from the port that they have contributed because they wanted to remove or external currency from this specific system. And they were maintaining all of these transaction and they were putting a digital signature and then they are verifying that digital signature with the help of public key to validate the transaction. But they still have one problem. They have to maintain all of these transactions somewhere epsilon please. Now, all of these people were maintaining these transaction. Chances are that these people might be maintaining these transaction On a mobile app or on a website, or maybe on a piece of paper, or maybe somewhere. Let's say if they're maintaining these transaction on a website, then they have to ask this question that who owns this website where these people are maintaining these transaction and who will host the ledger because the person who is maintaining the website or who is hosting the ledger have a lot of power because if this specific technology go mainstream, you can delete the website or you can remove these ledger. So we have to make sure that no single person is controlling all the rules of the game. That's why instead of maintaining a ledger on a website, on a mobile app, or on a piece of paper. All of these four people will build a technology called a decentralized ledger technology, where all these four people will maintain their personal ledger with themselves. Anytime these people do any transaction, that specific transaction will be recorded at the same time across these four ledger that every single person can validate whether this specific transaction is right or wrong. Anytime Alice space bulb, $20, bulb will hear that specific transaction along with you and Charlie. And they will put that specific transaction on their ledger. The time Alice pays Bob $20, this specific transaction will be recorded across all these four ledger at the same time. Now we have to go back to our consensus mechanism and we have to understand about one of the most important function that is your cryptographic hash function. In case of cryptocurrencies, especially Bitcoin, we use SHA-256 cryptographic function. Sha-256 cryptographic function is so unique that anytime you pass any information from this specific function, whether it's a name, a transaction ID, transaction details, or anything, it will generate a 256 character long hash or digest. This is your hash function. Anytime you pass any message or any transaction, it will create a random bits of ones and zeros, which is 256 character long. And this is very random. Anytime you change even a single digit, the complete hash or digestible change. This looks random, but it is not random. If you calculate this backward, it will always give you the same output. And you cannot predict the output of any message because there are two to the power 256 signature possible. If for every single message, this specific hash or digest is very unique. If you have a hash or a digest, it is impossible for anyone to know about this specific message or a secret key or a transaction ID. The inverse of this specific hash or desist is infeasible. Because now you have to find two to the power 256 possible combination. If you wanted to know this message or transaction or anything, let's say you have the hash or the dices and you wanted to calculate, let's say if you have the hash or the digest and you wanted to know the message, then you have to go backward and you need to calculate this message. And you have to do two to the power 256 possible gases, which is impossible to do. Now it is super difficult for these, for people to maintain this ledger and add a specific transaction and validated at the same time. That's why you need to introduce someone called as minor. Minor are all those people who are constantly creating new and new blocks and who are validating this specific transaction. So anytime anyone had any transaction to this specific ledger, these block creators or miners will validate this specific transaction and they show a proof of work. And they will add that proof of work into this specific block. And they will do that by solving a very complicated mathematical puzzle by basically reverse calculating this specific transaction detail by passing on the SHA-256 function and having a specific number of 0. This algorithm was built in such a way that a new block is created every ten minute when you know the first row, then finding the next number is quite possible because now the probability is one divided by two to the power TO D, which is one in a billion. So if I summarize the complete situation, you have all of these ledger so-called block, and all of these miners will add a proof of work to these specific block. And then these block will be connected to each other, so-called previous hash. And that's why it is known as your blockchain because you cannot remove this previous heads. I think we had a discussion about this concept in the last video, where if you remove the sequence of the previous hash, it will invalidate the complete blockchain. And that's why the mean function of these miners is to reverse calculate these particular number of 0 and validate all of these transaction by additive, by adding a proof of work. And that's how these miners are constantly broadcasting these transaction or blocks into the ledger of these individual nodes or users. That is why these blocks are interconnected to each other with the help of previous hash. And that is why it is known as blockchain and not the block group. You can understand that with the help of this example. So every single block in a blockchain is connected with the help of this previous hash. So this is the previous hash connected with this blog. Then this block has concurred with the previous hash of this block. And anytime somebody wanted to change the hash of this existing block, then this will make this complete blockchain invalid and it will not accepted by all the people who are running the same node of blockchain and they will reject this specific transaction. You can understand this with the help of this specific diagram. So you have these three block and every single block have a header and a body in header, you have proof of work and the 1.5th one empty hash. And then you have your previous hash in the next block, followed by a previous hash connected to the next hash in the next block. And you have all of these transaction into these blocks. And these blocks are connected to each other. And that's why we call this as a blockchain technology. 13. Introduction to Mining: Hey everyone, In the last few videos we had a discussion about consensus mechanism and how Byzantine Generals Problem would solve by these consensus mechanism in case of Bitcoin or any other cryptocurrency. Now in this video we will talk about mining. Mining is there in case of Bitcoin. Bitcoin is using proof of work as the consensus mechanism. In this video, I'm going to oversimplify mining for you. Again, this is the oversimplified version of mining. Saw that even a five-year-old kid can understand. After this, we will understand about the advanced version of mining. The main purpose of making this course is to make these things over simplify for every single person. Whether you are a beginner to blockchain Bitcoin, or you are an intermediary person. Every single person can understand about all of these processes. That's why I'm oversimplifying all of these concepts. Saw that even a five-year-old kid can understand if he's watching this course. So that's the main purpose of oversimplifying these topic. But again, when we oversimplify this topic will miss out on few details. And that's why we are covering these advanced explanation of all these topic. Let me explain you about mining in a very oversimplified be, Let's say you are the teacher of a math class and you have decided to play a game. So first you're going to put out a number on every single chair. Then in every ten minute, you'll be giving out a blank sheet of paper with 50 C, which is the reward attached to it, then you'll be calling out a math problem. And the first kid who will solve that specific problem, we'll get this specific blank sheet of paper. Now, the only thing you have to do to keep this 50 BC or reward is to write down the chair number of the person giving. The person receiving the amount given every time a kid gives some money to another kid. Five-minute pass by and one goal set lingo. You check the solution and you give this specific blank sheet or piece of paper to that goal. And then she begins writing down all of these transaction that is happening between all these other kids. Then you think of yourself, that was an easy problem. Maybe you have to give a hard problem so that they will take a little more time to solve it. You gave one more problem to them after 11 minutes, another kid we held out saying that bingo, I found the solution. Your repeated this same process over and over again. Adjusting the difficulty of the problems, saw that in every ten minute you're able to get the solution of the problem that you are giving to all these different kids. And that is essentially all that mining is all about. Mining is nothing but a bunch of kids in a classroom solving the problem to get a reward. Except instead of paper. Now they're solving this complicated math puzzle with very expensive and sophisticated computers, also known as ESI AC machine, that is specially designed to reverse calculate the first 300 going backward in SHA-256 function. Now this smartness level of kids and the number of good in the classroom doesn't matter because in every few over, you will change the solution and the difficulty level of the problem such that they are able to solve that specific problem in every ten minute. Let me give you a very high level overview of the actual mining process. Let me take the laser pointer so you can see that you send a certain number of Bitcoin from one address to another address and you request a specific transaction to the network. Now the transaction you requested is now sent to this Peer-to-Peer network, which consists of so many different norms or computers, or those computers are made up of ASIC's machine, then these miners will start the Bitcoin validation process by implementing a new block. And that's how they get some reward for their participation in this security of this blockchain network or the Bitcoin network of nodes validate these specific transaction using a cryptographic algorithm. That process is also known as your mining. Now the new block that is created by these minor that contains obviously your transaction will then be added to this specific blockchain. And once that specific block is added to the blockchain, your transaction is completed. Whatever Bitcoin that you own earlier, now that Bitcoin is now transferred the other address. This is the oversimplified version of mining. In the next video, Let's dig deep and let's understand how exactly this mining work in the real world. 14. Bitcoin Mining and block reward: Hey everyone, In this video, we will understand about Bitcoin mining. And obviously in the last video we had a discussion about mining. And I think that was the over-simplified version of mining. In this video, we will dig deep into this specific concept and we will understand about mining. Now let's imagine a very simple process. Alice is sending one Bitcoin to bulb. And this specific transaction will happen in the public ledger, which is running around the world. And all of these machine, also known as your ASICs machine, will be solving this complicated mathematical puzzle. And whatsoever machine or person is able to solve this complicated puzzle will get a reward, also known as your mining fees. In the previous few videos, we had a discussion about all these four friends, Alice, Bob, and Charlie. And all of us are maintaining these ledger personally with us because we cannot trust one single person who is maintaining our centralized ledger. So previously, all these four people maintaining their centralized ledger on our website on a mobile app. But then they have decided to maintain this ledger in their own system, which is updated at the same time anytime any transaction happens. Now, they can update. Their Blockchain is updated at the same time. But who will do this hard work of solving this complicated math puzzle? Now these people will do the transaction, but the hard work of solving this complicated math puzzle is done by these miners. Now these miners will create this specific block by adding a proof of work. This is the proof of work. Let me take the laser pointer and let me show you this. Let's say they wanted to add a proof of work to add a specific transaction that contains these 2D G row. Now as we all know, to record a transaction, you have to broadcast your transaction into this specific blockchain. So let's say Alice wanted to full bulb. And that's why ls is now giving two different conflicting block to the bulb. And let's say Bob is hearing two, these two different conflicting blocks. So imagine Alice wanted to fool Bob with the fake transaction, and he will do it by adding a block only to the bulbs ledger. Let's say bulb is listening to these two conflicting block. One block is added by Alice, and Alice is able to solve all these complicated puzzle very fast when compared with other people, because other people are also solving the same mathematical puzzle. Let's say Alice was able to solve this mathematical puzzle and he will push this specific conflicting block. And Bob is now listening to these two block. After sometime, Alice is again able to solve this specific mathematical puzzle faster than other people who are also running the same blockchain. And somehow Alice is able to add a new block to this specific blockchain much before then other people. But because there are so many people who are also using these powerful ASICs machine and those people are also solving this mathematical puzzle. Bulb should always listen to the longest blockchain that is there and not the smallest one that was broadcasted by Alice. And that is why you always listen to the longest blockchain and you should always reject the smaller one. That is why there is always a benefit of having more and minors or more nodes running the same blockchain network. Because if you have more nodes are more minors running the same blockchain, you always have a uniform distribution of solution and not a centralized distribution of solution. Just like Alice, because they were so less miners are norms because Alice was able to add a block much before then. All these people. And the time you have more and more miners are more and more running north-south running the same blockchain. It is super difficult for one person to add a block every single time. And that is why minor and nodes are super-important for a blockchain network. Now let's talk about the last part that is your mining reward and pull hopping problem. So previously we saw this specific concept where all these four friends are putting in $100 into this specific part. But this was not actually true. Creation of Bitcoin or the money in the Bitcoin blockchain network is created in the form of block reward. All the money in the bitcoin comes from block reward. And this block reward will cut in half in every four year. In 2009, the block reward was $50. So anytime if you are a minor and you will add a new block to the blockchain network. It will get 50 Bitcoin as the block reward. In 2020, this block reward is cut into half, and this enough you get $6.25 has a block reward. You can calculate this with the help of this pool hoping problem will not dig deep into this specific equation by the total number of Bitcoins that exist are 21 million. And we are still at least 2 million away from these 21 million Bitcoin. Let's quickly summarize the Bitcoin mining. Bitcoin network is secured by mining and mining validate the transaction on the network. And mining also meant new Bitcoin. At the same time. New bitcoins are created in the form of block reward or Bitcoin revolt. In every four-year, this specific reward is cut into half. Now the main purpose of having mining is that mining we ensure that not one entity or NADH is controlling the blockchain network or protocol. Because if one network is controlling the protocol, they can shut it down anytime that they want. And it will become a centralized system or a centralized protocol. And that's why if you have more and more nodes are more and more people running the same blockchain network. And if they're solving these different transaction or mathematical problem, they will get some Bitcoin reward or block reward. That is their main motivation of running this Bitcoin ledger. Now these computers who are running the network, also known as Norths or minor, they will always raised to solve this computationally intensive proof of work puzzle with these ASICs machine. Now the first miner who is able to find a solution or who is able to solve this complicated math puzzle. He will then add a new block to this blockchain network. And the block reward or the Bitcoin that is newly created into the blockchain will cut into half in every four-year. Now in written off solving this mathematical puzzle, that specific miner will be rewarded in the form of Bitcoin or any other cryptocurrency. We call this as block reward. And this block reward will cut into half in every four years. Now I know after mining you have so many confusing terms in mind. You might be thinking, okay, we are done with blockchain, we are done with consensus mechanism, we are done with mining. But we still wanted to know about Web three. What is metabolizers? What is NFP is? What are the different types of blockchain technology we have? Tell us about the different types of cryptocurrency or the different types of wallet or exchanges that we are using. We will cover about all these topics in the coming videos. So please have some patient. In the next module, we will cover about Web three metaphors and FTE is blockchain technologies, different types of cryptocurrencies, wallets, and exchanges. Let's dig deep into this topic in the coming videos. 15. Bitcoin source code: Hi everyone, My name is now BEP. Now, after watching the videos of digital signature, hash function, consensus mechanism, and how exactly mining work. Let's jump into the original source code of Bitcoin. So let me open all of this Bitcoin source code that I have. Now this is the source score of the original Bitcoin that was released by Satoshi Nakamoto and that was written in C plus plus programming language. I'm assuming that 95% people who are watching this video, you are not developers. And in that case, you may not understand what's going on inside this source code. We will only look at few checkpoints that we need to understand. This source code. Let me open the main file because in C plus plus, manually place where you can find everything, this is the source file in main. So I need to look at the genesis block first. We are first looking at the genesis block. For those who do not know, genesis block is the first block that is created in any blockchain. And this genesis block was created by Satoshi Nakamoto, who was the inventor of Bitcoin. And you can look at the genesis block hash, and you can look at the Merkle root of this genesis block. And you have your block time or new ones, and new ones will increase over time, then you can see that you have 50 Bitcoin as the block reward. Or to create the first block in the blockchain of Bitcoin. Going is not defined over here. So we have to check the header file of this file. We have to search for point because we have to see how this point was defined. So you can see that you can break down this coin into a 100 million pieces and you have a limited supply of these coins as well. So we will look at everything that is defined for these points. So let me scroll down a bit. Let me have to look at the subsidy. A subsidy is the reward that is given to all of these minor because they are mining and adding new block to the blockchain. Now we have to look for subsidy. Subsidy is the reward that was given to all of these miners because these miners are adding a new block to the blockchain. So initially the subsidy or the block reward that was given to all of these miners was around 50 that point. But after that, or this, and this subsidy is cut into half in every four years. So right now we are at a block reward of around 12 Bitcoin. So initially it was 50 Bitcoin. So in every four-year, this block reward was cut into half, and now it is at 12.5 bitcoin for adding a new block. And you have a limited supply of 21 million Bitcoin that is available. You have so many things that you can understand if you look at the source code of the original Bitcoin that was created by Satoshi Nakamoto. I'm assuming that 95% people who are watching this video, you do not really have a good experience in programming, especially in C plus plus and you might not be a developer. And that's why explaining every single element of this source code may not make sense. And I'm also not an expert in C plus plus as well. That is why I'm going to attach this original source code of Bitcoin with this video. So even let's say you are someone who is into programming or development. You can open the source code or you can also find the same source code in GitHub as well. That was all about Bitcoin. And let's continue the course. 16. Myths about Bitcoin: Hey everyone, my name is not VIP. And when I talk to people, so many people have fear, uncertainty, and doubt about Bitcoin. So in this video, we will understand why so many people have fear, uncertainty, and doubt about this specific reprogram. See. And again, this is not a financial advice. I'm just covering some real hard fact. That might be a little difficult for some people to desist. Again, I'm not exporting this specific domain. So please take this as a pinch of salt. I'm going to demystify some of the myths or misconception that people have in their mind. Let's understand why people have so many fear or uncertainty or doubt regarding Bitcoin. The number one is the intrinsic value. People think that bitcoin doesn't have any intrinsic value. But if you closely have a look at any feared currency, US dollar or euro, these fiat currency are also not backed by gold. In that sense, even these Vietcong C doesn't have any intrinsic value. But because these fiat currency is controlled by these government, That's why these fear currents. We have our little more power. Also, a lot of people feel that Bitcoin is a bubble. This bubble is lasting from last year and feeds typically don't really last for 12 a year. And this statement was given by JPMorgan because if you look at PBS bubble like tulip or nothing have last for more than 12 years. I think there are more than 1213 years and it's certainly not a bubble, not sure about other cryptocurrency. But I feel that Bitcoin is here to stream and the price will increase down the line in the future. So Bitcoin and do lip and Bitcoin is the best digital store of value, which is ever created in this world without any permission. The third reason people feel about fear, uncertainty, and doubt about Bitcoin is because they have seen so many people using Bitcoin for money laundering and drugs. And frankly, even I have seen few people using big point for money laundering and drugs. But I think Bitcoin, money laundering is a classically dump crime. And laundering money through Bitcoin is a really bad idea, not only because it's illegal, but also because it leaves a permanent krill. And anytime you receive or send money through Bitcoin, you're leaving a permanent trail. And we can see that specific situation with the big phoenix Taft that happened in 2016 and recently, I think 23 months back, two people were arrested for a 7 billion crime that happened with Phoenix back in 2016. And this was possible because all of these people were sending all of these bitcoins to different wallet and they were following a specific pattern. And that's why these investigator or investigating agency was able to track all of these Bitcoin transfer because the Bitcoin ledger was public. Laundering money through Bitcoin is a classically dumped crime. And personally it's illegal as well, but it's not the best option. You can have. The best currency to do all of these money laundering and drugs is your fiat currency. That can be anything, that can be a US dollar or euro. That cryptocurrency is not the right form of money for that specific purpose. Now, certainly I do not promote all of this. I'm just explaining you these concept saw that I can demystify or I can boast couple of myths that a lot of people have. The, another issue that people have in mind is water density. Now, we're going to have volatility in the market. The prices fluctuate so much. But that's not only for Bitcoin. I think every single asset have watertight behavior in the market. This is the chart of the gold price over the last 100 years. And you can see how volatile cold is. That doesn't mean that you can compare gold with Bitcoin. Obviously, Bitcoin is a fairly new cryptocurrency and it is just 12 years old. It's obviously it will take some time to get adopted by some more multinational companies or big tech giant. Yet a lot of these big tech giants and multinational company are using Bitcoin, but still it may require a little more adoption in the future. Because what did you expect with a new emerging sound money? It, something, it may not follow a linear path. Fluctuation might be there, That's fine. Now the fifth factor which a lot of people have is energy consumption. If you look at Bitcoin, bitcoin is using proof of work as the consensus mechanism. But apart from Bitcoin, all these other cryptocurrencies are using proof-of-stake, the consensus mechanism. And obviously there is a scope of improvement when it comes to Bitcoin in terms of energy consumption. But if you look at the normal process where we use Vietcong, see we are consuming a lot of energy in every single event. From mining goal to financial system to government, the courts to military, two selfies are watching Kardashians. We are consuming electricity every single day. So if you look at the yearly electricity cost of coal mining, it is at 10, $5 billion. If you look at gold recycling, it is at $40 billion. If you look at paper currency and maintaining it is $28 billion. For banking system, it is $1870 billion for government. It is twenty-seven thousand billion dollars for the time. For Bitcoin mining, it is just $4.5 billion. Obviously, it's still very high and you can always reduce down. But only blame Bitcoin for energy consumption is, I think, unfair. 17. Web 1.0 , Web 2.0 and Web 3.0: Hey everyone, In this video we will understand about the use case of blockchain technology. We talked about blockchain technology. A lot of people feel that blockchain is only about Bitcoin and money. But that's not really true because you can use blockchain technology for so many different types of things. But point is just one example of blockchain technology with the help of Bitcoin. Obviously you can transfer Bitcoins from one person to another person. But you also have Ethereum, which is the Internet for blockchain. Then you also have LFTs, which is non-fungible token. And we will talk about Ethereum and LFTs in the coming videos. With the help of Bitcoin, you can transfer money, so-called Bitcoin with the help of Ethereum, you can build smart contract or dabs, which is your decentralized apps or decentralized finance or DeFi. With the help of NFT, you can sell all of these LFTs on MET hours. And I have a separate course for metrics as well. But in this video, we will also understand some basics about metaphors as well. If you look at the evolution of web, we came so far from Web 1, Web 3. In Web 1, we can only lead sorting information and we cannot interact with the content. Let's say if you wanted to read about something, you can just read about it. You cannot really put a comment. You cannot really interact. So there is no two-way interaction in Web 1. Then we got Web 2 where you can have two-way infraction. Let's say you can post a picture, you can use the social media app. You can look at Uber or Airbnb. You can do a lot more in Web 2. Right now we have Web 3 where you have all of these decentralized application, so-called depths. And the reason a lot of people are excited about Web three over Web T2 is because these companies started. The reason a lot of people are really excited about Web three instead of Web T2 is that these platforms, facebook, Amazon, Flipkart, Google, these platforms have made us over-dependent on them. And that's why these platform have moved from attracting us to extracting from their user. The reason a lot of people are really excited about Web three instead of Web 2, is that we are over-dependent on these platforms like Google, Facebook, and all of these fan companies. And that's why these platform paint from attracting that user to extracting from the user. And Web three will allow us to create open trust less than permission-less platform. And we talked about open, all of the source code of all these cryptocurrency or blockchain project is open-source. That means anyone can build their own dabs or decentralized app, or decentralized finance on these open protocols like Ethereum, Solana, Cardano, then you have trust plus that means there is no single person who is controlling these open protocol. And any single person can build their own decentralized app or decentralized finance with the help of these cryptocurrency or blockchain technology. Also, it is permission-less. That means you do not really have to take permission or authentication from anyone. You can use all of these decentralized protocol or blockchain project, both on the user side and on the supplier side. 18. Types of Block chain technology: Hey everyone. In this video we will understand about the different types of blockchain network. Now when we talk about blockchain, you can have these different types of blockchain. So you have your public blockchain, semi-private blockchain, private blockchain and Consortium. Let's talk about the public blockchain. So Bitcoin, Ethereum, all these are the typical example of public blockchain. And then you also have some private blockchain, some semi-private blockchain and Consortium. Let's understand about all these different types of blockchain. So let's start our journey by understanding about the public blockchain. A public blockchain is open, it's decent lives network and it is accessible to anyone in the world. And for public blockchain, you have these miners who is validating the transaction and they're getting a block reward. And normally public blockchain is using proof of work and proof of stake as the consensus mechanism. So Bitcoin is using proof-of-work and Ethereum is using Proof of Stake. Now Proof of Work is a bit inefficient. But again, if you have more and more number of participants and if you need to create a highly trustworthy cryptocurrency, then I guess proof of work is quite stable. And the best example is obviously Bitcoin and Ethereum. Then you have some private blockchain technology. Now private blockchain are not often, they are not open source and they have access restriction, which is governed by one body or one entity. And this private blockchain is controlled by one single company and this is used internally into that specific company. If you look at the example, hyperledger is a private permission blockchain, then you have hybrid blockchain or consortium. And this hybrid blockchain or Consortium is the combination of public and the private blockchain technology. And this contain both decentralized feature and decent place feature. The typical example of hybrid blockchain is your energy. We have foundation, dragon gene and R3. Then you have one more type of blockchain, which is not really a typical type of doctrine, but we are still considering it. That is your side-chain. Now, side-chain is a blockchain that is running parallel to the main chain. And a side chain will allow its user to move the digital asset between two different blockchain. And it will improve the scalability and the efficiency of that specific blockchain. Now the best example of side-chain is polygon, so-called metric network. Nowadays they have so many other project running on the same side. So now they are into Zika roll-up, side chain plasma etching. And they have so many different projects for every single use case. If you understand about the different blockchain and cryptocurrency, you have these types of blockchain and platform and software that you have to understand. Bitcoin and Ethereum is the typical example of public blockchain. And if you wanted to build a smart contracts in Ethereum, you have to learn solidarity, then you have your private blockchain and Consortium. And these are the software for these private blockchain. Now, when we talk about cryptocurrency, you have all these four types of cryptocurrency. Bitcoin is used as the store of value. So you can transfer Bitcoin, which is a form of currency from one person to another person. Then you have Ethereum, which is a utility token. That means you can build a smart contract or your own app or dabs, and then you can deploy that in the Ethereum mean net. Helium is not directly used as a money transfer cryptocurrency, but it is used as a utility token where you can build your own application, where you can host your own code. Then you have a digital currency, and then you have your security token. And the typical example of digital currency is Libera, which was launched by Facebook back in 20172018. But I think they have recently shut down this digital currency. This beautiful diagram will really help you understand about the complete blockchain technology. And I really wanted you to focus on this specific diagram because once you understand this specific diagram, you will have a high level overview of cryptocurrency and blockchain technology. First, you have the store of value. And the typical example of this specific category is your Bitcoin. Then you have all of these different blockchain project that will help you build smart contract. Or you can write a code and then you can deploy that specific code. In these decentralized blockchain project. You have Ethereum. Ethereum will allow you to build your own dabs or decentralized apps, so-called smart contract. Then you have Cardano, also known as ADA. Ada is the token, ETH is the token off at helium, ADA is the token of Cardano. Then you have dot, which is the token of polka dot, then you have drawn. So all of these platform will allow you to deploy your smart contract so that you can build any app that you want. Then you have Solana, Neo, and Io's. These are all smart contract platform. And we'll talk about these platform down the line in the coming videos. So please have some patients. We will cover every single platform. With the help of these platform, you can build your own smart contract. And I'm going to cover about smart contract as well in the coming videos. Then you have utility token, which have a special use case. File Coin will allow you to store any specific file that you have. So let's say if you wanted to host the image file, audio file, or any file in decentralized system. Then you can use File Coin. Then you have your civic token, which is for identity authentication. Then you have a coin link and 3D, which is into supply chain and operation. You have so many utility token as well. Then you have exchange token. With the help of these platform, you can exchange different cryptocurrency. Let's say if you have Bitcoin and you wanted to purchase Ethereum, you can swap these two cryptocurrency with the help of B&B or unit swap. And similarly, let's say if you wanted to by Cardano, by selling your salon up, you can do the exact same process on Susie swap or on units to our platform. You have all of these exchange token as well. Then you have digital currency, also known as your hard fork version of Bitcoin. With the help of these digital currency, you can just transfer the money from one person to another person. These are little faster platforms like ZIRP, LDC, Bitcoin, cash, and so many other digital currency like Luna. Then you also have stable coin, which is backed by US dollar. So stable coins like US GET USD In CB, USD. These stable coin always have $1 SD value and these are backed by US dollar. Then you have your equity torque on. An FTA is also there in this picture. So few examples of NFP is crypto pounds x infinity and the central end. I have covered everything about NFP is in my, my towers and NFT course. So you can just watch that course. If you wanted to know more about NFP is metaphors. 19. Wallet address, Public and Private key of your wallet: Hey everyone. In this video we will understand about wallets and we will see the different types of wallet we have. But before that, let's understand why do we need wallet at the false, please. Barnett, are the essential tool or accessing, sending and receiving your cryptocurrency. You can use these wallet to store your public and private key, and you can store any of the cryptocurrency in these wallet, whether you have Bitcoin, Ethereum, Litecoin, an Altcoin. Now you have different types of web wallet called bullet, and we'll talk about all of those different types of wallet in the next slide. But if you lose access to these vallate or let's say if you end up losing your public and private key, you're no longer able to access your cryptocurrency. And if somebody has stolen all of these wallet or let's say if somebody have the access to your public key, and if somebody has stolen these wallet or let's say if they have the access to this wallet or your private key, then they can steal your cryptocurrency. Let's understand about all these different types of wallet we have. When we talk about wallet, we have a software wallet. We have a web wallet, a cold wallet, and a hardware wallet. Let's start with software wallet. Software wallet can be used in your own local system or let's say laptop. So if you're using a laptop, you can install this specific software and then you can store the public and the private key of your cryptocurrency inside that specific software. And that software will be locally installed in your own laptop. Then you have web wallet. If you're using cryptocurrency exchange platform like Coinbase or finance, then chances are that you're using a web wallet. Now a web bullet is also known as your hot wallet because it is hosted by a third party, such as any cryptocurrency exchange like Coinbase finance, or any local exchange that you're using. Now, it is very convenient. You can easily use it, you can quickly log in it. And it is pretty CFS well, but again, if those exchanges course bankrupt or if something bad happens with those exchanges, you will lose all of your cryptocurrency. Then you have cold wallet, which is considered as the safest option to store your cryptocurrency for a very long time. But again, if you wanted to use it and you have to transfer your cryptocurrency from a cold wallet to have a bullet because web wallet is convenient. But remember, if something bad happens with the company, then you may end up losing your programs. Called all it is basically a USB device that you can connect with your local system, your laptop, your system, and you can store your public and the private key. In fact, you can also write the public and the private key on a piece of paper that is also a pharmacology. Then you have hardware wallet that is specifically designed to safely store your cryptocurrency. Now they are highly secure and probably the best way to store fund. But again, these are not convenient. But if you broadly categorize the different types of bullet we have, we will categorize these into different form. You have your hot wallet and your cold wallet. So a hot wallet is connected to the Internet. A hot wallet is much more user-friendly, but again, it's less secure. You can use these hot wallet to do your day to day transaction. So let's say if you have some Ethereum in MetaMask, you can easily use that specific wallet to buy NFP, So to sell LFTs and it is very convenient and user-friendly. Then you have cold wallet which is not connected to Internet, unobvious storing all of your cryptocurrency in hardware device or a USB device or the hard disk, which is harder to use, but it is more secure. And you can store all of your programs see for the long-term. Now if you look at some local exchanges that all these different countries have, these exchanges are not very secure. That's why these exchanges use third party custody instead of using self custody. Now, if you're using a local exchange, you might have seen this specific logo. This is the logo of big goal. Or maybe you might have seen coin-based custody as the logo. The main purpose of these custody is that if something goes wrong with the exchanges or if some big attack happened on that specific exchange, they can reverse the transaction. Let's say if a hacker is trying to steal millions of Bitcoins from some exchanges, if they have this Third-party custody, Let's say coinbase also provide custody bit goal to provide custody. That will make that specific exchange a little more secure and they can reverse the transaction somehow. I don't really understand this custody as much, but I'm just covering it so that you feel that even hot wallet or let's say cold wallet, both are secure if they have some form of Third-party custody. Now let's discuss about the most important topic when we will discuss about cryptocurrency or wallet, that is your public key, your private E and your wallet address. Let's talk about all these three most important topic. Let's start with wallet address. Now I bought it. Address is a randomly generated set of numbers and letters. Let's say if you own five different cryptocurrency project, let's say if you have Bitcoin, Ethereum, or Cardano, then you are using three different policies. I wanted address usually consist of 26 to 35 alphanumeric character, and we normally use this specific wallet address to send or receive a digital asset. Now to access this specific wallet address, you need a public key and the private key, but you can share your public key, but these never shared your private key with anyone. And the public key, private key will look something like this. So previously we had a discussion about this. You always create a digital signature with the help of private key and then you validate your digital signature with the help of public key. And we had a discussion about this specific concept in the last few videos. I think in the second or third video, we had a discussion about this specific concept where if you use your power private key, along with the transaction, you can have a digital signature. And to validate that specific digital signature, you have to combine that with your public key, and that's how your transaction is verified. 20. Benefits of block chain technology: Hey everyone, My name is known b. And in this video we're gonna talk about the benefits of blockchain technology. Since the past couple of videos, we had a discussion about how exactly blockchain work. So you have a distributed ledger. In that specific distributed ledger, you have dots, smaller blocks, and those blocks have two components. Blog handle, so-called block head and block body. And all of the information will get store in that specific block. And that's how your blockchain technology work. Now in this video, we're going to talk about the benefits of blockchain. Wanted something that makes blockchain so unique and so special. And why people are crazy about Blockchain cryptocurrency and Web 3. And the first reason why blockchain saw special or so unique is trustless. That means you do not have any third party blockchain is nothing but a de-centralized ledger. Every single person holds a copy of that specific ledger in their own system. And that's why you can trust all different nodes. Nodes are nothing but your computers and there's no single point of control. And people will be rewarded and be analyzed based on the activities they do. So you have to blockchain consensus mechanism, proof of work, and proof of stake. If some node or some computer or quieter do something wrong with this block gene, they will get penalized because they have to speak their currency if they wanted to do mining or if they wanted to validate that specific transaction. So blockchain is trustless. Also, it is unstoppable. Which means, let's say if 10 thousand computers are running this blockchain ledger, and out of those 10, 1000 computers, let's say 9,999 computers, even if one computer is running that specific ledger, the block chain will still be functional. And that's why blockchain technologies unstoppable, no matter how many countries banned the specific technology, even if single computer is running, you can run this specific block chain. So you have millions of nodes, so-called user who is running this specific ledger, whether it's a Bitcoin ledger or ethereum ledger, 24, 7 in There's CPU or GPU or computers, whatever you call it. Then it's an open-source cord, which means any single person in this world who have high power computing machines that can run this specific gone into their system, into the command line. And they can run this ledger. Also, it is immutable. And we had a discussion about why blockchain is immutable, because every single block have a block header and a block body, and every single block header have a hash function. And every single hash is connected to the previous hash. So you can not change even a single block because then the previous hash will become invalid. And that's why blockchain is immutable because you cannot release the data. And also you have millions of many data. If one single validator is trying to change the data or drank to remove a block. Adobe alligator will reject that specific transaction. And if you wanted to still add a block into the block gene, you have two Adina dominance or you have to do 51% fig transaction, which is really difficult to do at the same time, then it is decentralized. Obviously, there are some blockchain which are not fully decentralized, but majority of the blockchain which are really popular like a Bitcoin interior from all other cryptocurrency or decentralized, which means no single person control the cryptocurrency or blockchain technology. And non-government or involvement is also there. So that because if comment is there, they will try to make it a little more centralize. And there's no hard fought possible. And also there is no hard-fought possible, especially in case of Bitcoin. So the first chord of Bitcoin was published in 2009. And machines are still running the same core. That is not even a single a source of change in that specific code. Obviously that court is available in the public domain. And there are so many cryptocurrency which are made are of that specific seem Bitcoin or chord, but those are all coins. So you have Bitcoin cash. So some person did some sort of changes in the Bitcoin corn and they made a new cryptocurrency bitcoin cash. But remember, that is not Bitcoin, that's an all coin. Someone in finance meet couple of changes in the Bitcoin Core and now that cryptocurrencies BNB token. So, so many people have tried creating their own cryptocurrency by changing all the chords in the Bitcoin mean core snippet. But those are different. Or coins, the mean gourd, which was there in Bitcoin, it's still up and running. Also blockchain technology have lower cost. Now there are a couple of exceptions. Right now if you do any transaction on Bitcoin and Ethereum, it's really expensive. You have to be of fees somewhere between $20 to a $100. But this problem is now being sold by a couple of more cryptocurrency and blockchain technology with the help of sharding site gene plasma layer or with the help of roll-ups. Now these are confusing, DOM, we're going to talk about all these ways by which you can decrease down the cost and also scheme the blockchain technology. But that's advanced concept. We're going to talk about that in the last module of this specific course. So you have your proof of stake, which is having a very local structure than proof of history is also having a very low cost structure. But roof off work, which is the blockchain consensus mechanism, which is used by Bitcoin and Ethereum. Now please do not stress out on any confusing down leg blockchain consensus mechanism. I'm going to simplify that topic with the help of some limit example. So just ignore all the dumps which you are not able to understand as of now, then there is no intermediary commission. So anytime you perform any transaction on this specific ledger, every single person who is handling this norm, they will get some form of mining, but it's not a commission to be reading frame, then it's transparent. If you have the public key of desk law, or Amazon or Microsoft, you can see how many Bitcoin or Ethereum those people have in their wallet. Now, you have to associate their public key with their name. So let's see. If tomorrow Tesla doesn't reveal their public key. They can secretly store all of the planetarium. But let's say if they put out all of their public address and the public domain that this is our Bitcoin public address. Anybody who wanted to have a Tesla or any specific product of ours can transfer their Bitcoin to this specific public address. Then you can see how much Bitcoin does Tesla or any other company holder. It's super transparent. Obviously they are producted with the private key. So in the previous few videos, I had a discussion how exactly a blockchain wall that is made up of two different at Gies, your public key and your private key. Private key you hold with your cell. If you do not share your private key with anyone. And public key you can share with anyone you want, because that's your address. That's how people will send you the money, then it's a universal banking option. So let's say if you wanted to transfer a bit going a TDM or any other cryptocurrency to anyone in Africa or in China, you can do that. So that's all about the benefits of blockchain technology. In the next videos, we're going to talk about Bitcoin mining. Because I know, because I know a lot of you might be interested in knowing how exactly the mining work in case of Bitcoin. 21. Explain Proof of work like I'm 5: Hey everyone. In the last few videos we had a discussion about Web 2 and Web 3. So as we all know, in Web 2, you can have two-way interaction with all of these apps like Facebook, Airbnb, and Uber. Now when we talk about Web 3, which is open, trustless, and permission-less, the most important blockchain project, which is powering this Web 3 network as ethereum. In this video, we will oversimplify Ethereum with the help of this magic book analogy. Now remember, we are just oversimplifying. Ethereum saw that even a five-year-old kid can understand. In the next video, we will dig deep into Ethereum and how exactly a smart contract work. But this video is just an oversimplification of Ethereum. And we are using this magic book analogy so that even a five-year-old kid can understand about Ethereum. Let's start this video. Imagine there are two friends, Mary and Alice, and they have this magic book. And the people around the world have the same copy of this specific magic book. And every single person around the world can write anything in this specific magic book. And anytime anyone write anything in this specific magic book, it will appear to all the other copies around the world pretty much instantly. The best part about this specific magic book is that no one can erase that is written in this specific magic book by anyone. And we call this specific magic book as Ethereum blockchain network. Not only Ethereum, that's basically any blockchain technology. You know, whether it is Bitcoin or Ethereum or any blockchain technology, any transaction that is recorded into that specific blockchain technology by anyone, that transaction cannot be deleted, modified, or change. That is the core thesis of having a blockchain technology. Now when we talk about this magic book, Bitcoin, for example, use this magic book to log the transaction between two different people in the form of Bitcoin. So let's say if you wanted to transfer one Bitcoin from one person to another person, you will just write, I gave Mary one Bitcoin. This specific magic book will then check through all of the increase. While this specific magic book will then validate the condition whether you are in a position to send one Bitcoin or not, and then married will receive one Bitcoin from you and then she can send that Bitcoin to anyone she want. And that is all about magic book and Bitcoin. Ethereum is very different from Bitcoin. Ethereum goes further. And with the help of Ethereum blockchain network, you can now write self-executing program, which cannot be deleted. We call these self-executing program as smart contract. Let's say joy is trying to build a smart contract which is self-executing. That means you do not need any third-person to validate that specific smart contract. Once Joy have deployed this smart contract on this magic book, that specific smart contract will execute automatically. Let's say Joy wanted to write a smart contract saying that I bet one Ethereum to Monica that it will rain tomorrow. So if it will rain tomorrow than Monica had to send one Ethereum to Joyce helium bullet. Let's understand how exactly this smart contract work. So fast. Joy have to pay a small fee is to deploy this specific smart contract into this magic book, so-called Ethereum main net ads. Soon as Joy have deployed this specific smart contract on this magic book or epithelium mean net. This specific code will keep running or executing in thousands of computers worldwide at the same time. And any single computer or node can check the code of this specific program. This specific smart contract will take the help from Oracle. We will understand about Oracle in the next video. But before understanding about Oracle, we first have to understand about decentralisation, why epithelium is special and why joy is choosing Ethereum over any other blockchain technology. While Joy is a person who doesn't want to share his food and the execution right to the third party. That is why he is using Ethereum. Because once Joy have deployed this specific smart contract, no one in this world can delete that specific program, or they cannot even modify or change the program. So if I describe Ethereum in one single line, while it tedium is basically a giant coordinated decentralize swarm of individual computers were connected to each other on the web where anyone can deploy their mini programs, so-called smart contract or a very small piece, so-called gas piece. And this specific smart contract will work this way. And I know this sounds confusing to a lot of people, but let me oversimplify this for you. So you have your Ethereum smart contract or on Ethereum main net. Let me take the laser pointer and then you have these correctly. The main function of these oracle is to get off chain data. Ethereum and all other blockchain technology are not connected with the weather data or off-chain data. And that's why we use these for Eccles like chain link, which take this off chain weather data from companies like nasa or whether book. And that's how this chain link. We'll feed this specific obtain weather data into the smart contract. So that smart contract can validate this specific transaction because this Ethereum blockchain network needs to have some information about whether or whether it is raining today or not so that it can execute by itself. Then you have your baseline protocol, Enterprise three W's. And we'll talk about this specific diagram when we talk about Oracle and how exactly Ethereum work. If I conclude this specific video while it helium is a network protocol that enables users to create and execute smart contract on this specific decentralized network. So all of these people in this decentralized network, so-called nodes are maintaining the same blockchain ledger at the same time. You can think of this de-centralized ledger as this magic book. Where every single time you or anyone write anything on this magic book, the transaction will reflect in every single book which is there around the world. In the next video, let's understand more about Ethereum and let's dig deep and understand all the possible use-case for a tedium. 22. Introduction to Ethereum blockchain: Hey everyone, In the last video we had discussion about Ethereum, but that was the oversimplified definition of Ethereum. This video, we'll dig deep into smart contract and how can you use Ethereum to build decentralized apps, so-called dabs and decentralized finance, also known as D5. Let's talk about Ethereum. Ethereum is basically a network protocol that enable users to create smart contract on a decentralized network. And in the last video, we had a discussion about this magic book, where any person around the world, if they write any code in this specific magic book, that code will reflect into every single magic book that is there around the world. Because obviously, it is also using de-centralized ledger, so-called de-centralized ledger technology. And anytime you make any change or you add a new chord to the Ethereum mean neck or the ledger, that specific chord or smart contract will reflect into every single node around the world at the same time, when you look at web technology, web technology all, if you look at depths or decentralized apps, these decentralized apps have two sides, a front-end side and a back-end side. It helium will be using solidarity. That is a programming language in which you can write the smart contract. Let's understand about Ethereum. Now when we talk about Ethereum, in Ethereum, you can write a smart contract that is made up of a code. And that smart contract will perform a specific function. And you can also interact with that specific smart contract. But obviously, you have to be a developer to write a smart contract. In contrast to bet point, which store numbers it helium will store executable code. So let's come back to our block part. So every single block in the Ethereum contains a block header and a block body. And this block body will contain this specific data. In case of Bitcoin, this data is the transaction that is happening in the Bitcoin ledger. In case of Ethereum, this data is that executable code, so-called smart contract. That means if you want to store a smart contract inside a block, you have to increase the block size, like Bitcoin removes the need for someone to store your money. Ethereum removes the third-party deal blocker who handled the transaction between two people and it is replaced by code reducing time cost and the possibility of human error. 23. Building Tik-Tok on Ethereum: A lot of people feel that money is the only single use case of Bitcoin. Let's look at a couple of web three technology that are replacing this web to technology that we have right now. This is the comparison table of PEP to technology and Web three technology. You have companies that are involved in transaction in privacy and security communication, identity, data storage, computing, and application network layer. If you look at transaction currently we are using third-party payment provider like Venmo or stripe. In Web three, you have MetaMask, all Kenny and maybe phantom vaulted that you can use. Now for previously in Web T2, we are using Tor browser or maybe in cognitive mode. In Web three, you will have technologies like nine or in case of security in web tool, you can use PSA score or Palo Alto in vector. You can use polygon median. In case of communication, you have all of these different platform. So you can look at Web two and Web three. In case of Web three, we can bucket the infrastructure development under two broad categories. So at first we have alternative to Web 2 offering. If you look at Web three technology like File Coin, which competes directly with centralized cloud storage system like AWS or google Cloud computing platform. Or as your butt, just like AWS or Google Cloud Platform, you can still delete the file in case of Bitcoin, but Web three have a better version of this. Recall that as Web three native offering, the best example is our bill that provides a permanent storage, which is not offered by all these web two incumbents. And slowly this world will move to the two possible on chain visibility. That means you cannot remove the data no matter what. Let me give you a real-world use case on how exactly someone can build a decentralized app, or let's say a decentralized social media app, the help of Ethereum. Let's understand about the architecture of a decent life stick doc or any social media app that you can build with the help of smart contract. And the mean value proposition will be a crypto power creators economy. Let's say all of these creators. So let's see if you're putting content on Instagram, on Facebook, you doesn't own the content. Instagram and Facebook and remove the content anytime they want. And they are also not providing you the direct benefit of that specific content. Let's say you are building a platform on this decentralized blockchain technology like helium. And you can monetize your content by I just offering our Tiktok token. Let's understand about this specific decentralize social media app that you're building, or let's say that you can build with the help of Ethereum. Let's say you have content creator on one side and you have consumer or audience on other side. Let's say all of this audience know that this specific content creator who just have started his journey in the content creation, this specific content creator have a massive potential. This content creator will become very famous in the future. But right now he's just having 1000 or 5 thousand follower or subscriber. These people can directly transferred token to this specific content creator. These people can also buy these videos in the form of NFP for this specific content creator. And let's say this content creator can announce our stake pool where he will offer some streaks of all of his revenue that he can generate from this app to these people. Let's say he can announce a streak pool saying that all these people who will transfer me a certain amount of Tiktok token, they will receive 30% of my owning every single month over the complete lifespan. He's ready to split this revenue just to get the initial money to buy all of these equipments like expensive cameras are drawn or anything. You also have straight pool or revenue split with these audiences. These audience believe in this specific content creator. Let's understand about the different monetization option that this specific content creator have. The first monetization option is tipping if you wanted to accept money from these people. The second way is influencer marketplace. Then you have seals. These content creator can directly sell their courses or they can sell anything on this platform. At fourth, you have created pool, and I think we already had a discussion about this specific way of monetization. So let's say if a creator have just started as Joni on this specific social media platform and he doesn't have money to buy these expensive equipments like a camera or laptop or some other gadget, you can announce a creator pool where he will see that I'm ready to split 30% of my revenue for the rest of my life. If you donate me a specific amount of money in the form of these token, and then people will donate specific amount of token and they will get a small ownership of this specific channel, or let's say social media platform. And that's how they get revenue split for the rest of the light. If this content creator will become big in the future, you have all of these four options by which content creators can make money in a decent way social media platform. So if you look at the benefit of Ethereum depths or decentralized apps that are built on Ethereum, or let's say any smart contract platform. Now whether that smart contract platform can be Solana, Cardano or Ethereum or anything. The first benefit of these Ethereum depths or decentralized app is open system. That means all these platforms have the full functionality to the network of participant. That means all these depths for decentralized apps demonstrate the platforms full functionality to the network of participant. Also, all of these apps will be built with the help of smart contract. And smart contract normally eliminate all the manual processes to just have to write some rules and function and they will execute automatically. Also, these depths will have an encryption protocol. And all of these depths will protect the user data with cryptographic encryption protocol. And you have encryption protocol. And the cryptographic encryption function will protect the user data, and that is not possible in case of Web 2. And with the help of tedium or any other smart contract platform, you can also make decentralized finance. That means you can directly transfer cryptocurrency or stablecoin from one person to another person within these decentralized app. So you can integrate d phi within the decentralized app as well. Just need to write a smart contract which will automatically load MetaMask wallet, which is kind of like a human gateway provider that will transfer your asset from one person to another person, then you have lego blocks. That means it helium dabs will function as a Lego block. Meaning that many decent place application can be built on the top of these existing DHAP to provide a quick access to the other depths as well. 24. Introduction to Smart Contract ?: Hey everyone, My name is now VIP. And in this video we are going to understand how does a smart contract work. So as we all know that Ethereum is the world's computer, technically known as Ethereum Virtual Machine. And Ethereum Virtual Machine can do much more than payment, unlike Bitcoin. And you can write all of these smart contract and then you can deploy the smart contract on EBM or Ethereum Virtual Machine around the world in this public blockchain ledger. So let's understand about how exactly a smart contract work. And in the next video, we will have a look at a smart contract between two different people. Let's say there are two people, Bob and John. And Bob wanted to sell his house and John wanted to buy his house. Again, this is a very hypothetical example. And there is so much that you can do with smart contract. Let's say Bob wanted to sell his house, john wanted to buy his house. And they have written down this specific condition in a smart contract. And as soon as you write a smart contract, it will first receive your asset and then it will distribute the asset between all the other people. You will now have the matching of buyer and the seller. So first, this specific smart contract will receive the asset, then the smart contract will distribute the asset. And finally, it will clear the settlement with the help of these stable coin or any other cryptocurrency that you wanted to use. After that, the land deed is digitized and you have undisputed ownership of this specific land. Now this sounds like a very futuristic technology, but currently we do not have any of these things in the real world. But in future, some government may implement blockchain in the transfer of ownership. So basically we are using code as a law where if you write any condition, if that condition is validated, then simply this smart contract will execute by itself and it will transfer the ownership of any asset that is written in this specific smart contract. Let's say in the previous example, joy and Monica bet on specific condition that if it will rain tomorrow, you have to give me a certain amount. And that was also a great example of smart contract. Now let's look at the characteristic of a smart contract. What all things will make smart contract unique and special? The number one characteristic of a smart contract is autonomous execution. So as soon as the conditions are met, this smart contract will execute by itself. And it doesn't need any third-party or middlemen. That's why when you do not have a middleman or a third party, you will end up saving a lot more cost. In smart contract, we are using code as a law because the smart contract are deployed on public blockchain ledger, no single person can, can change, delete, or modify it. You always have this process execution of your smart contract. In the next video, let's understand about a smart contract with the help of one example. 25. Etherum Smart Contract real world use case: Hey everyone, My name is now deep in this video we will take one more example and we will understand about the possible use case of Ethereum depths or decentralized app. But before that, let's understand what makes blockchain technology so unique, and especially Ethereum, where you can write smart contract blockchain technology offers of B, where untrusted parties can reach to an agreement, so-called consensus on a common digital history or ledger without being fostered a third-person or intermediary. So technically blockchain or database. But the key difference of these database, we'll come down to ownership because no one person on these data bees, the ledger where this specific database is maintained, decent lies or distributed in nature. And deeds ledger or this specific database is transparent in nature. That means any single person can look at this specific digital ledger and they can read through all of these transaction or history of transaction. And because this is distributed in these different nodes or computers around the world, no one person can, although the past information. And that's why in this video, we will design a batting system with the help of Ethereum. And I know batting is a bad word. We should always avoid that. But we are just taking an example to understand the process. You should always avoid batting and that's not something you should do. But still, to understand this topic, I have to cover this. So as we all know, Ethereum is an open-source, decentralized blockchain, which will allow you to write smart contract. And a smart contract is essentially a code that binds two parties to reach to an agreement and it will execute by itself without any intermediary. Let me oversimplify smart contract for you with the help of this specific example. Let's say Alice and Bob bet $10 thousand on AQIM. The reason they are using Ethereum or smart contract as because Alice and Bob do not trust each other and they have to trust a third party as an escrow agent. So imagine both of them don't really know about the smart contract as of now, The gave the agent that amount of money and the agent will distribute the winning and the amount state to the winner. And that's how the normal process will look like. But Ethereum have a much better solution to solve this problem or to remove this intermediary or third-party between these two people. Now to solve this intermediary or this escrow agent problem, Ethereum have the solution where Alice and Bob could simply write a smart contract where as soon as the results are announced, they can use code as a law. And this code will execute automatically, and this code will transfer the ownership of any asset, whether it's a property or a house, or they can also transfer money from one person to another person without using a third party or an intermediary like escrow agent. Let's watch this specific smart contract that is created by Alice and Bob, where they will transfer the ownership of their house as soon as the facilities of a specific game is announced. Soon as Alice and Bob have deployed this specific smart contract or Ethereum blockchain. Every single computer around the world, so-called node, have the exact same copy of that specific smart contract. Because that smart contract will have a game or the result of a game, that smart contract will independently confirmed and execute in every single system as soon as the results are announced in the entire process is recorded in the Ethereum blockchain, creating a common digital history around the split and the complete process will look something like this. The option contract is written as code into this specific blockchain. And because Ethereum is the example of a public blockchain. So as soon as you deploy your smart contract, the contract is now a part of this public blockchain. And these two parties are anonymous in this case because instead of using the name or the identity of the person, you can use the volatile address this specific contract will execute by itself adds unless the conditions are met or results are announced. In our case, basically a smart contract is smart where it will execute by itself and we use code as a low instead of using intermediary or a third person to distribute the benefit, or let's say to transfer the benefit from one person to another person. In short, a smart contract is smart and it will execute by itself, as well as the conditions are met. And as we all know, we can use blockchain technology beyond just transferring money or writing a smart contract. We can also use blockchain technology in IoT, buying stable coin, or in buying digital metal. So there are so many possible use cases of blockchain technology. But again, it's a fairly new technology and it is not very much stable. You may see a lot of price fluctuation in any of these cryptocurrency project or blockchain project. 26. Proof of Stake Consensus mechanism: Hey everyone, In this video, we will understand about proof-of-stake consensus mechanism that is used by Ethereum. In the last video, we had a discussion about Bitcoin mining and proof-of-work consensus mechanism, which was used by Bitcoin. But Proof of Work or the consensus mechanism that is used by Bitcoin have so many flows. And as we all know that Bitcoin consumes a lot of energy. And the main reason of this specific energy consumption is this proof-of-work consensus mechanism. Let's understand about the difference between Proof of Work and proof-of-stake, and how proof-of-stake is comparatively much better than proof of work. Now it helium is using proof-of-stake as the consensus mechanism. And Bitcoin, it's still using proof-of-work. The only reason behind that is that proof of work is much more decent. Realize it is very secure, but proof-of-stake is still secure, but it still have some level of chances or probability of doing some fake transaction that is already there, but still proof of work is much more decentralized and secure then proof-of-stake. But Proof of Work is not really good for environment. Now let's continue with the same analogy where all of these kids were solving the math problem. And in return of that specific math problem, these kids have to write the chair number of all the other kids who are transferring money from one person to another person. So let's continue with the same analogy. And let's understand about proof of stake. And let's look at all the problems that you stared with proof of work. Because all these goods are competing with each other. They are working at the same time to solve one single problem. And that's why they're wasting their time and energy by competing for the solution of the same problem. It's a winner take all kind of a value proposition since the work is just thrown away if you're not the first one to solve it. And that's why we have proof off streak. Now let's oversimplify proof of stake with the help of same example. Again, I'm oversimplifying this topic by using these analogy. And after this video, we will dig deep into proof-of-stake consensus mechanism that is used by Ethereum. Proof of work, all the people, or especially the kids, are solving the same problem and they were competing with each other to find the solution of that problem. But in case of proof-of-stake, you will randomly pick one kid, so-called validator. Then you will assign the problem to only that validator. And then that validator will solve the problem so that we can add a new block to the blockchain. And after that, one more person will be assigned and he will also solve that problem. And then he will also add a block to the blockchain. And if that wooden block is valid, then everyone adds to the top of their wooden stack. But one question you may have in mind, so how are validators choosing now abdicate? Who wants to be a validator? They have to deposit sorting candy in a common shared pool, also known as taking pool. After that, the group will choose a validator, but the probability of being a validator is always high, if you will speak more number of candy. So suppose Bob puts in ten candies, and Alice only puts in five candies, then Bob is more likely to be chosen. If Bob is chosen as a validator, he will validate the transaction by adding a new block. And in return of adding that specific block, he will get an additional candy as the fees, also known as gas fees in case of Ethereum. And this gas phase is usually less than the amount that you have deposited in the strip. And after some time, if no bad activity is detected, hit steak or deposit will be returned to him. But the main question is, how do we prevent bad kids inserting a bad block? Or let's say even if they replace the existing good block. So how do we even trust Bob, who is the validator from approving a bad blocks during that window, if Bob is discovered by approved bad block has deposit of ten candies will be taken away. And that's why these groups always approve the right block and they do not add a bad block. Otherwise they're ten candies that they have deposited into this common streak will be taken away. Now that was the oversimplified version of proof-of-stake consensus mechanism. Let's go deep and understand how exactly proof of stake consensus mechanism work in case of. 27. Problems with Proof of Stake: Proof-of-stake is the consensus mechanism that give a sort in power to the people who own that cryptocurrency to validate a specific transaction and then create a new block that he can add to the cryptocurrency Network. Now compared with proof of work as the consensus mechanism, proof-of-stake is faster. It offers a lower cost of transaction and requires less computing power. Let's say you have validated on one side, the centralized network on another side. And let's say these validator will stick their doctrines and then they participate in the consensus mechanism. And once the transaction is validated, this decent lice network or a, let's say a block is added, they will get a reward. And after sometime when the transaction is validated and no single bad block is found, then they also get their stake darken or deposit back. Now let's understand proof-of-stake with one example. Now when creating a new block, the proof-of-stake algorithm chooses who is the block validator by checking how many coins or person it's taking. The bigger the state, the higher the probability of being chosen as a block validator. To understand proof-of-stake, I'm going to take a very simple example. Let's say somebody wanted to solve this mathematical problem. Find a mathematical sum of these two numbers, five plus seven. Let's say you have three validator, validate the number one, who was a minor previously, and he is taking hungered ether or Ethereum to validate this respect transaction. Let's say you have validate a number two, who is also stating ten Ethereum and you have very data number three was also a minor previously and heats taking 50 million to solve this problem. Now because validator one, it's taking more number of Ethereum to solve this problem. The chances of this proof-of-stake algorithm choosing validator number one as the validator for this specific transaction is always very high because he is having more number of Ethereum that he is sticking into this taking pool. And because of that validated 23 will not be participating in solving this mathematical puzzle. And validator one will be sticking his epithelium to solve this puzzle. Inversion of solving this puzzle, he will get some reward, so-called mining piece, and then he will also get his stake amount back once the transaction is validated by other people. In proof-of-stake, the validator who is equivalent to the minor in case of proof of work, gets to validate the transaction based on the number of coins the validator holds support every expected block of validator will be nominated through random criteria from the list of participants who have given this peak. Let's say you have your predecessor block hash and a transaction. And now you need to validate this specific transaction, whether it is correct node. Let's say you have this taking pool where all these people are sticking their Ethereum or any other cryptocurrency. And let's say you have this sticking algorithm, that is your proof-of-stake algorithm. And it will take a state decision based on the amount of helium that you are striking. And based on that, it will give you a decision whether you can validate this specific transaction or not. If you can, then you are allowed to add a new block to the blockchain and written off that you will get some reward. So basically in order for you to participate in the proof of stake consensus mechanism, you have to lock up the native doctrine of that cryptocurrency. So in case of Ethereum, that is your eat that you have to lock up or deposit in these taking pool for a specific amount of time. Once the transaction is validated by other people, you will get your money back. And this will look something like this. Now I know this look a little confusing, but let's quickly summarize proof of stake consensus mechanism. Now, apart from proof-of-stake, there are so many consensus mechanism and we will discuss about those consensus mechanism in the coming video. But the validator or can be selected based on the design of the blockchain. And you can add multiple condition. So generally a person or a user or who on something for a very long time, that person have a better chance of being chosen as a validator so that he can create a new block. Let's say if you own 10% of all the coins of that specific blockchain, then you get to mine 10% of the new block. And these validators will usually get rewarded for their work in the form of transaction fees, also known as gas piece in case of Ethereum. And alternatively, validators may receive a specific amount of points due to inflation. And only because of this gas fees validator have some motivation to maintain this blockchain network when compared with other consensus mechanism like proof of work, proof of stake is much more energy efficient. But again, just like other consensus mechanism, proof of steep to have some problems, but even proof-of-stake is quite lucrative. It is having a low energy consumption and it is allowing one person to stick his cryptocurrency and solve a problem. Now because you are allowing one person to solve a specific problem and not allowing other people to compete. A full decentralization in case of proof of work is not possible. Because of that, you are allowing a handful of nodes to act as a validator. And those people hold majority of the tokens or points for that specific blockchain network. Let's see if there is a blockchain technology or a cryptocurrency where majority of the coins are hold by a very small group of people. And if the algorithm is choosing all those people that holds the more number of coins, well then the blockchain technology is not fully decent lice because the algorithm will only choose all those people as a validator who holds the maximum number of token or coin. And that's why we need so many improvement in proof of stake. Because the probability of someone being chosen as a validator will be decided by how many coins you have for that specific cryptocurrency. Proof-of-stake system can be much more cost and energy efficient, but it is not fully decentralized, just like Proof of Work. And that's why you have so many other consensus mechanism as well. In the next video, let's talk about the difference between proof of work and proof of stake consensus mechanism. And maybe other different types of consensus mechanism that is also there in the market. 28. Proof of work vs Proof of stake: Hey everyone. In this video we will discuss about the difference between proof of work and proof of stake consensus mechanism, which all consensus mechanism are also there as of now. As we all know, if we compare proof of work and proof of stake consensus mechanism, the energy consumption in case of proof of work is always very high because you have millions of people, so-called nodes, who are validating a specific transaction around the world at the same time. Proof-of-work consensus mechanism is used by technologies like Bitcoin and Ethereum as of 2022. But Ethereum is fully switching to proof of stake as the consensus mechanism. As we all know in proof-of-work, all these people compete at the same time to solve a mathematical person. And whatever computer or NADH who is able to solve that mathematical puzzle faster, you will get some block reward. On the other side in proof off streak. People doesn't compete with each other and one person is chosen who will validate a specific transaction, also called as validator. And then he will add a block and become a validator. You have to put your coin or your cryptocurrency in a streak. And once the transaction is validated, then you will get your stick back along with a gas fees so-called reward. Let's look at the required tool. In case of proof of work, you need some mining equipment, so-called ESI AC machine because you are competing with so many people. And when you're competing with so many people, you need powerful machine to do backward calculation. Now because in proof-of-stake, you're not competing with anyone. You do not necessarily need these equipment. Let's talk about security. Proof of work is highly secure because you're competing at the same time with millions of people are millions of computer at the same time. So it is highly secure. Now because one person have the authority to add a new block or to validate the transaction in proof of stake, it is not that much secure when compared with proof of work. But again, proof-of-stake is comparatively better than Proof of Work. And that's why in recent few years, I have seen so many cryptocurrency project who have shifted to proof-of-stake consensus mechanism. And we'll talk about all of these consensus mechanism as well in the coming video. I'm sure you have seen this tweet of Elon Musk Where Elon Musk was raising some concerns related to the environmental concern that was caused by the Bitcoin transaction because Bitcoin is using proof-of-work as the consensus mechanism. And that is why a lot of electricity is being wasted by these minor. And that's why Tesla has suspended the vehicle purchase using Bitcoin because of the concern over rapidly increasing the fossil fuel for Bitcoin mining. So as we all know, proof-of-work require mining and that specific mining process requires you to compete with millions of people at the same time to solve the mathematical puzzle. But unlike proof-of-work in proof-of-stake, you doesn't need any mining and the digital currency is already created in the network. You just have to stick your own cryptocurrency and you have to validate a specific transaction and develop validating the transaction, you will get some fees, so-called gasp. So the power that you need to solve mathematical puzzle in case of proof-of-stake is comparatively much less than proof-of-work. Because in proof-of-stake, you doesn't need a hash power. In proof-of-work, you need hashpower with these expensive ATSIC machine that you have to connect with each other so that you can generate more hash power or you can solve more number of hash per second. And that's why proof-of-stake can solve this problem of extensive use of energy to solve these mathematical puzzle. Now another reason why proof-of-stake is better than proof of work is the centralization and the mining pool. Imagine there are two people. One person is having a normal CPU and there's one more person who is running a big mining facility where thousands of ESI AC machines are connected to each other. And those ATSIC machines are providing them are very high hash power. On the other side, you just have been CPU. So someone who minds with just one CPU will not have a good chance for that board. But someone who had a mining pool with thousands of CPUs will have a better chance. That's very unfair because in proof of work today, almost 50% of Bitcoin hash power is coming from very few mining pool. And when you have less number of people validating your transaction every single time, That's a problem because that means only a few people have to met at the same desk to agree on a 51% attack and change the blockchain if they have a reason to do so. And that is why cryptocurrency that are using proof-of-work consensus mechanism are not fully decentralized because these hundreds or maybe thousands of very few mining pools are having millions or thousands of these CPUs. And if they end up forming a cartel or a group. And that's very bad for other people, like you and me who owns a Bitcoin. And previously more than 70% of mining was coming from China. But I think in 2020 to China have been the bitcoin and we don't have any. Mining power that is coming from China anymore. Now, one of the reason why proof-of-work is better than proof-of-stake is the unfair economic model. So if someone have more number of tokens for a cryptocurrency project, that person will always have a higher probability or a higher chance, become a validator and get a steak reward. And that will lead to a very few number of people holding the major belt or a higher proportion of token in that specific cryptocurrency project. So in proof of stake, if you have more number of coins or if you own more number of tokens of any cryptocurrency project, you can have more probability of being chosen as a validator. But in case of proof of work, every single person have an equal chance of validating a specific transaction if you have more hashpower or more CPU to solve a specific math problem. Now another problem with proof-of-stake is the risk of loss or tapped off. And now since proof-of-stake require you to take some amount of your cryptocurrency to validate a specific transaction. And you might be using a hot wallet or internet Malek for that purpose, there is always a risk of loss or theft of your fund that you are taking in the statement pool. Now let's talk about the different types of consensus algorithm. Apart from proof of work and proof of stake. Again, you don't really have to know all of these, but let's quickly have an overview about all of these different types of consensus mechanism. So in proof of work, as we all know, this consensus mechanism, all these miners are solving these mathematical puzzle. They are competing with each other. And the one person who will solve this puzzle faster, we'll get a block reward. And this consensus mechanism is used by Bitcoin and Ethereum. Ethereum, it's still using proof-of-work consensus mechanism in 2022. But I think by the end of this year, there'll be switching to proof-of-stake as the consensus mechanism. In proof of stake, the validator can speak their own coin or cryptocurrency in order to become a validator. And after that, they can add a new block to the blockchain. And return of adding that specific block, they will get some block fees or so-called as gas fees. Then you have proof of authority where these validator will put their identity on the network, and after that, they will add a new block to the blockchain. Then you have proof of burn. In this algorithm, you're letting miners to burn a virtual cryptocurrency token. That you always have an increase in the price of token as soon as more people started doing transaction. And you have proof of history consensus algorithm. So in proof of history or algorithm, you have one block that will take snapshot of all the timestamp anytime any transaction happen. Then you can look at all of those timestamp and proof of his tree is considered as a little faster than other consensus algorithm. 29. Difference between Coin vs Token: Hi everyone. My name is now deep. And in this video, we're going to talk about the difference between coin and talking. And I've seen a lot of people who are getting confused between these two terms. Let's understand about the difference between coins and token. Let's start with point. Now when we talk about going, going is a digital currency that is similar to physical currency. When we talk about coin, all of these cryptocurrencies like Bitcoin, Ethereum, Dogecoin. These are the example of coins. When we talk about token, token is a digital asset that is issued on a particular project. If you look at region, region is a project that is built on ERC-20 protocol, so-called Ethereum. And this project is issuing all of these tokens that you can purchase. This is the typical example of token. In short, coin can be operated in their own blockchain with their own protocol, but tokens to not necessarily operate in their own Blockchain. So if you look at unit swap or reaching region isn't to supply chain and operation. Unit swap is a decentralized exchange. So these two doctrines are built on ERC-20 protocol, which is, which is nothing but a ethereum protocol. And we will talk about the different ERC protocol in the coming videos. So you have your ERC 20, you have ERC seventh 61 protocol. And we'll talk about these protocol in the coming videos. But tokens to not necessarily operate in their own blockchain. You can build your own project or so-called token on Ethereum, on buying and smart gene, you can build your token on any protocol that you want. Also both coins and tokens can be used as the source of payment. But when we talk about tokens, tokens have much more specific use case. Let's say region is especially into supply chain and operation. Jailing is a good example of Oracle. With the help of chain link, you can connect to different cryptocurrency or blockchain project so that you can transfer data from one blockchain project. We had different blockchain. Similarly with units web, you can swap these two different cryptocurrencies. So let's say if you have a tedium and you wanted to purchase Solana or Cardano, you can use unit swap. The typical example of coin is your Bitcoin and Ethereum. And a good example of top-down is your utility token and dow. A coin have the same characteristic as money and they are fungible, invisible, and acceptable, and they also have a limited supply. When it comes to token. Token are all these digital assets that are issued by one single project. And they can also be used as the payment protocol inside that project system. Let's say if you're building a special project which is solving a specific problem, you can issue a token inside that specific project. And with the help of that token, you can be inside that project. Let's say if you're building a decent life beam or a metabolite scheme, then you can issue a token of that specific metabolite scheme so that different people can purchase different digital asset or avatars or skin inside that game with the help of that specific token. So at digital coin is an asset that is native to its own blockchain. While token can be created as an existing blockchain. And the most common docker is your ERC-20 token that you can build on it children. If you look at the example of Coin, Bitcoin, Ethereum operates AND function on their own Bitcoin blockchain and Ethereum blockchain. And we'll talk about civic token when we will cover about digital identity and authentication, we have a separate video for the use case of decentralized apps or dabs. In that video, we will cover about civic token. And then you will understand how civic doctrine is built on ERC-20. That is a ethereum protocol. And that's a big token, is solving one specific problem of digital identity. So if you look at projects like polygon, polygon is a project that have its own token called metric. But you still need to bundle up the transaction or to roll up the transaction into the Ethereum mean net coin can be sent, mine are received. But going on not meant to perform a specific function beyond just money. That is why you have BTC Ethereum. These are coined and they perform a very specific function. On the other side darken these projects are designed to perform a specific function. In case of civic, that is an ERC-20 token built on it, helium for digital identity. Then you have polygon that is built to scale the Ethereum main net. Then you have unit swap and maybe millions of other token or project that are solving one specific problem. And these projects have their native token, but they still need ethereum because they need to roll up all of these transaction into helium in net. Obviously, we'll talk about all of these roll-up. How exactly Ethereum main network and how can you scale it helium. Once we had a good discussion about problems with Ethereum, blockchain, trilemma will discuss about all of these topic in the coming videos. 30. Types of token: If you look at the different types of tokens that are available around us, we have security token, asset token payment talk on equity document and utility token. Let's discuss about all of these different types of token. At false we have security token and most of the tokens that are issued by ICO or Initial Coin Offering US Security Doctrine, B&B is a good example of security token. Then you have equity token, and these tokens represent some form of equity or ownership of one single company. These are equity Duncan. Then you have your utility token, These talking or also known as your application token. Because these token or these projects are solving one specific problem and they provide people with access to either a product or a service. So if you look at VET which is reaching, reaching project, have a VET darken. And we gene is normally used as a supply chain and operations management project. And then you have civic token. And civic can be used as a digital identity project. And we have a separate video about civic that how exactly civic can be used in decentralized app and decentralized finance to verify your personal identity. We'll talk about civic and read VET in the coming videos. Then you have payment token and token have no other purpose than to pay for goods and services. If we talk about the different types of token, when it comes to coin, you have your Bitcoin, ethereum Ripple, Litecoin, Cardano, an iota. When we talk about toggle, these doctrines are built on these projects, so-called helium or any other cryptocurrency like Cardano or Solana. And these tokens are solving one specific problem, whether it is strong, reaching or civic. Every single cryptocurrency have both coins and talk. And talk and have the standard. Either this token will follow ERC20 Standard, which is a Ethereum standard, or it is a non-standard token, majority of the token ERC-20 standard, I think after 2010, so many people started changing the source code of Bitcoin and they started creating these other cryptocurrencies like Namecoin, light going, Dogecoin, and then you have a native blockchain that is paid from scratch. So if you look at Ethereum, ethereum was not a hard fork version if helium was pretty tone scratch. But then people started creating different version of Ethereum afterwards. Then you have non native Blockchain like Iota and byte value. This is the basic difference between coins and tokens. 31. Etherum token and it's benefit: So ETH or ether is the native cryptocurrency built into the Ethereum blockchain. If you wanted to purchase this ETH, you can purchase this ADH by exchanging your US dollar or your fear currency that you're using in your own country. And then you can purchase ETH or Ether token from all of these exchanges, depending on which exchange we are using. Now if you are building some decentralized app or DHAP, then obviously you'll be deploying that specific DAP or decentralized app into the Ethereum main net. And in that case, you will be paying a gas piece and for that you have to use ETH or ether. Similarly, Bitcoin also have their own native cryptocurrency called VDC. And if you wanted to do a transaction on Bitcoin blockchain network, then you have to use VDC. But again, you never deploy any decentralized app directly on the Ethereum main net, because executing code in every single node around the world at the same time can lead to a very high gas piece. And that's why you always use these layer two or layer 0 solution like go polygon saw that your transaction fees for, I would say your gas fees is very less and you use these GK rollup and side-chain to build or to deploy your decentralized app. Because all of the side chain and layer one and layer two solution are EVM compatible. But obviously all of these side chains and roll-up will finally feed all of these transactions, or I would say batch all of these transactions together and feed them back to the Ethereum main net for validation. And that will bond more Ethereum and it believes to the increase in the price of ETH token or Ethereum token. Please do not worry about all of these complex topic like Zika roll-up, batching, sharding, deployment of dabs because we will cover all of these topic in the coming videos. So please have some patients will talk about polygon, Zika roll-up, batching of transaction side-chain in the coming videos. But before that, let's quickly have a look at all the major d Phi or dabs, decentralized finance or depths that are built on Ethereum. Bottom, you have your custody or your payment protocol that will help you signing into all of these decentralized app or DeFi apps. So you have your MetaMask Coinbase wallet, trustworthy that will allow you to sign in into these different depths or DeFi apps so that you can facilitate the transaction between two different people. Then you have some lending protocol like compound maker, our b, d by dx. And we'll talk about all of these lending protocol in the coming videos. Then you have your stable coin that are built on ERC-20 protocol. And then you have these Oracle, I think we already had a discussion about Oracle like chain link. Chain link basically connect to different blockchain project together and it will allow them to share data with them. Let's say if you wanted to fetch network data from somewhere into a blockchain technology so that you can execute the smart contract. You might be using these oracle like chain link or band protocol. Then you have these trading decent place apps or depths that are built on ERC-20 protocol. So you have your unit swap, you have your Cove, which isn't to finance. You have your loop bring one inch barrel swap d by dx. All of these exchanges will allow users to exchange two different cryptocurrencies. And these are not controlled by one single person. Let's say if you wanted to exchange your Cardano with Solana, than you can swap these token into these decentralized exchanges like d by dx or one inch or unit swap. Then you also have these derivatives, asset management, cross chain insurance, and data analytics. And we'll talk about all of these depths or decentralized app or DeFi in the coming videos. Now, one of the question that you may have in mind is that why a lot of developer or people are using ethidium? Well, one of the biggest reason is it helium has a 0 downtime because once you deploy your smart contract in any of these blockchain, you need a network that is ready to serve client looking to interact with your contract. And we also need security. And it helium provides your security, which doesn't allow these malicious actor to launch denial of service attack, so-called DOS attack, and it also keeps your DAP. See. Another reason of using Ethereum is previously. Another reason people are using Ethereum compared with other blockchain technology is because of privacy. And in case of Ethereum, you do not need a real-world identity to deploy a smart contract. So if you wanted to use our app like any NFT platform or any depths for that purpose, we just have to install a Chrome extension, that is mathematics in case of Ethereum. And you can interact with that specific DAP, a smart contract. The same way you can also deploy your own app. Third reason a lot of people are using TDM is because it provides you a resistance to censorship. And this is possible because helium is de-centralized. No single entity is controlling this blockchain and no one can stop you from submitting the transaction or from deploying your app. And one more reason of using Ethereum is your complete data integrity. As we all know that ethereum is a public blockchain. So all the data that you store in Ethereum is immutable because of cryptographic algorithm and manages people cannot force the transaction that is already added to that public blockchain ledger. Another reason of using a tedium compared with other blockchain is because of trust less computational and verified behavior. And this is possible because of the decentralisation, that is theorem, theorem. In case of a tedium, no single person is controlling any node. And the time you deploy your smart contract, every single person is running the same Ethereum blockchain ledger at the same time, and that's how they are adding a specific blog or a group of transaction on the Ethereum mean net. Unlike our banking system, where one bank or financial institution or government is controlling all of your transaction. You can not trust those people. 32. What is Ethereum Dapps: Hey everyone. In this video we're going to talk about decentralized app or dabs. In this video, we will understand the technology stack of tabs. And after this video, we will also understand about one DHAP or decentralized app that has a real-world use case. As we all know, you can use Ethereum or any smart contract platform for that sake, like Cardano, Solana. And you can build your own decentralized app, or you can deploy a smart contract. Apart from Ethereum, you also have so many different types of cryptocurrency with solving one specific problem. So Bitcoin is a digital gold, or with the help of Bitcoin, you can transfer Bitcoin as a currency from one person to another person. You also have stablecoin digitized matters. We also have different types of smart contract platform. Let's talk about dabs are decentralized apps. Deep centralized application are governed by smart contract rather than a specific individual or corporation. As soon as we have built the app, and as soon as you have deployed app, you cannot change it if you wanted to upgrade something or if you wanted to introduce a new feature, you literally have to hard fork it. And obviously that has some positive side and some negative side as well. And we'll talk about the pros and cons off decentralized apps in the coming videos, with the help of an example in traditional bank, you are able to reverse a transaction. But if you do a transaction on Ethereum, it is super difficult to reverse because that transaction will be recorded in the blockchain and you cannot remove or add a transaction into the blockchain. Now because the theorem itself or pillar, so a bunch of existing depths are built on Ethereum, but developers can build their decentralized app in any blockchain technology that they want that support smart contract. Today you have so many different types of blockchain technology that are supporting smart contracts. So you have Blockchain technologies like Solana, Cardano, avalanche, and few of them are EVM compatible. Ebm is your Ethereum Virtual Machine, and we will talk about EVM in the coming videos. But if we look at our high level overview of ADAP, obviously we'll talk about DHAP in the coming video. But if you look at a very high level overview of a decentralized app. So obviously your customer will be interacting with this decentralized app with the help of Internet. And this Internet is using Ethereum node to access or fetch all of the data. You're decentralized app will be deployed on Ethereum Virtual Machine. And we'll talk about EBM in the coming videos. And then you will understand how exactly all of these things happens at the same time. Let's talk about a couple of decentralized app. I think we already had a discussion about all of these Web two and Web three apps. So instead of using Stripe as a payment gateway provider, you can also use mathematics. Mathematics is an Ethereum wallet. So let's say if you use Stripe to access payment from different people, you have to pay almost one to 2% of gut to these people because they are accepting payment on your behalf. In case of MetaMask, you don't really have to pay anything. If those people will transfer some amount of money to you, you can directly received that. Similarly, you have so many different use cases where you can replace a web app with a Web three app. And in this video, let's understand about all of that. So as you all know, my mask is a web browser plug-in that connects your device to the Ethereum network. And MetaMask allows you to enable Peer-to-Peer transaction where you can just accept payment. You can swap your talk on and you can do a lot more than you have brave. And as we all know, Brave is a browser. It's a mobile and a web browser that have BAT token integrated in it. So if you use more Brave browser, you can and BAT token. And this browser was developed by the founder of JavaScript. So that's why this browser is very popular among developer. Then you have Ethereum Name Service, also known as your ENS. Let's say if you wanted to purchase a domain that ends with dot NADH, let's say if I wanted to purchase now deep dot ETH or eat, or let's say if you wanted to purchase your name dot ETH, then you can use Ethereum Name Service, which helps you provide suffix in your domain. So instead of.com now you can purchase it. And this is nothing but a personalize it tedium bullet address that you can get using Ethereum Name Service. It ENS is nothing but the DNS for a TDM or Domain Name Service. You also have so many DNS for other cryptocurrencies, blockchain technologies as well, like Solana Cardano. You have DNS for all of these. Then you have other depths like three box and civic. And we have a separate video about civic and we will talk about civic in the coming video. In case you don't know, Civic is a secure identity and data management platform and we have a separate video on civic. Then you also have my wallet and my crypto wallet. And this is the typical example of all the depths that we have. Let's talk about few more depths that are there in art and marketplace domain. The first one is maintainable. Some n-tuple is a platform that lets you manage and browse digital items in blockchain. Then you have open C, and we are all aware of OpenCV. Opencv is a peer to peer trading platform for entities also known as your crypto collectibles or rare digital items. So in case if you wanted to purchase an NFT, there is a very high chance that you might be using open marketplace to buy these crypto collectibles or NFT is or non-fungible tokens. And we'll have a separate video about NFT in the coming section. So do not worry about that. We will cover about an empty metabolites and all of these complex topic as well. Then you have the central end and decentralized doesn't matter where the user can buy and sell these virtual land or acid. They can also interact with other people. Now I have a separate course about metaphors. You can just tap on my profile and you can check out that course. In that specific course, I have explained every single thing that you need to understand about metabolites and FTEs, AR and VR technology. In that specific course, I've explained about meta, about de-center land, unity, Microsoft, Facebook, and all of these big tech giant and how they are focusing on metaphors, then you have music. So one of the good example of a music decentralized app like Spotify is audience. Audience is exactly like Spotify, but audience is three centralize. That means you cannot remove a music or podcasts or anything. Once it's there in audios, audience is exactly like Spotify, but it is decentralized. That's the typical example of decentralized app. And I'm sure that we had a discussion about this specific slide in the last video. And I, in that video I have explained how can you build a de-centralized Tiktok or a decentralized Instagram with the help of Ethereum. And how exactly the business model is gonna look like. That's the typical example of building a decentralized social media app. And I think I have explained about this specific topic in the last video. So let's understand about one of the very famous decentralized app that is civic. 33. Civic a digital Identity Dapps: Now let's understand about a famous decentralized app that can be used as a digital identity or as a digital authentication system. We will understand about civic with a real life example. Now Let's understand this with the help of an example. If you are traveling to a foreign country, then you have to show your personal identity at so many places like airport, hotel, check-in. In that case, you have user on one side, user is you and me. And you have your identity requester, an airport and hotel checking on another side. Then you have blockchain technology where all of your data is there. And then you have your civic identity partner. Now this RNP partner can be a government or can be any organization that is connecting your data. Let's say you have a personal identity like a driving license or any sort of ID God, that you have in your own country. And all of your data is fed into this blockchain with the help of this civic identity partner. So let's say this identity requester will request your personal identity and then you will give access to this person to get the proof of your ownership. And this person will check the data authenticity and ownership, and validate that you have the proof of identity. And that's how the civic identity management system work. So each company or organization that use your digital identity can validate data using the blockchain. And the more times the application is used, the more trust the third party have in the digital identity that it's stored in civic, because Civic is built on ERC-20, which is a standard of helium. That is why they also need it helium in order to feed back the transaction into the epithelium mainland. In the next video, we will talk about ERC standard or Ethereum requests for comment. 34. ERC Standard (Ethereum Request for Comment): Hey everyone, My name is now beep. And in this video we are going to understand about ERC or Ethereum requests for comment and let me oversimplify ER CPU false. And then we will understand about different ERC standard. And with the help of these ERC standard, you can build your own project or blockchain on the top of Ethereum. Let's understand about ERC first, I'm going to oversimplify ERC standard by taking an example of a debit or a credit card company. Erc is basically a standard describing Ethereum tokens. When a group of people or a community, they started building Ethereum or any other blockchain. They started realizing that creating your own coin require sorting standards. And that process is just like making a credit card. If you look at every single credit card company around the world, all of them are following a simple standard where you have to have a magnetic strip on the back. You need a space where people can sign. You need a customer service number, you need a credit card or a debit card expiry date and your name and account number. So each card has a black strip on the back to swipe. And most modern cards have a chip in different and every single credit or debit card company needs to have an expiry date, a security code also known as your CVE number, owner's name that should be present on the card. And all of these details should be present in such a standardized way so that every single smartphone camera can understand. They can also scan these cards in case if you are building of futuristic technology where you can stand a debit or a credit card with the help of your smartphone, you need to follow our standard procedure. So back then, Developer at Ethereum realize that just like credit or debit card, you also need to have the standard if you wanted to allow other people to build on your blockchain network. And that's why it helium created Ethereum requests for comment. Most of the cryptocurrencies that are built on Ethereum, whether it is civic TA, corn or any other cryptocurrency project or NFT that is built on Ethereum. They are using a variety of ERC technical standard that is supported by Ethereum network. For example, ERC-20 or Ethereum requests for comment 20 is a standard with the help of which you can write a smart contract. And a decentralized app is a group of smart contract that you need to write if you wanted to build a decentralized application that is not controlled by one person. So if you're following ERC20 standard to build your decentralized app or DHAP, then you can easily interact with Ethereum wallet or a tedium exchange. This is very helpful because the time you deploy your decentralized app on Ethereum main net, then you can quickly interact with Ethereum blockchain and you can use their mathematics wallet that you will allow people to transfer money from one person to a different person. Anytime you build any decentralized app, you need a payment gateway provider. Now as we all know, yes, it can be used to build a smart contract or a group of smart contract. And you can build your decentralized app with the help of ERC-20 or decentralized finance for that seat. That's the main purpose of ERC-20. Apart from ERC-20, you also have different types of ERC standard like ERC two to three that can be used to build smart contract. Then you also have ERCC1 one-to-one. You can use that to build non-fungible token or LFTs. And you also have ERC 864 that can be used to build a shared ownership of LFTs. And these two are very different because nFET is, cannot be shared or cannot be broken down into pieces. But you can use ERC 864 to build a shared ownership of LFTs. We'll talk about all of the standards in the coming videos. Now if you wanted to build your app or decentralized app, or let's say a smart contract using this ESC standard, you have to use certain processor or certain standard or I would say minimal information in that case, let's say you're building your own cryptocurrency or your own token using these ELC standard, then you have to show a minimal information to the end-user. And that is very necessary. So let's say if you wanted to build a smart contract or let's say cryptocurrency. Let's say you wanted to build a cryptocurrency and you wanted to issue some token of your cryptocurrency that you are building using ERC standard or using Ethereum. Then obviously you have to show the total supply of that token or that cryptocurrency that you're building and the number of tokens that you are issuing or generating as of now. You also need to show the data on the account balance of the owner's account. Let's say if a person is Pole choosing some token or some cryptocurrency of your project. You have to show them how much cryptocurrency or tokens they own. That sounds like a very obvious thing, but you have to show them it's a prerequisite. Then you also have to code to execute the transfer of token to and from a specific ERC-20 address. You wanted to build a functionality where a user can send and receive money or token or cryptocurrency from any specific ERC-20 IP address or wallet address, whether a person is sending you money from Tron or from avalanche or from any ERC-20 address, you can receive that money in your wallet because you are following this ERC standard. Then one more requirement is that you also have to write the code where these users can withdraw these tokens from a specific account. And these are the minimal function that you have to write if you are building some cryptocurrency project on ERC standard. Now, I assume that 95% of you are not developer, so you might not understand What do you mean by events AND function. So I'm not going to dig deep into this specific slide. You can pause this video and you can understand which all function that you have to write. And these are the minimum function that you have to write if you are building some cryptocurrency project or let's say if you're issuing any doctrine of your cryptocurrency that they're building on Ethereum using ERC standard. And apart from these mandatory function that you have to write, there are a couple of optional function as well, and you can also pause this video and you can understand about this. You can read more about these things on the documentation of Ethereum. So I'm not going to dig deep into all of these things because I assume 95% of my audience is not into development, or so-called smart contract development. And that is why you do not need to understand all of this. Now let's quickly summarize this video by understanding two of the most important ERC standard. Let's discuss about ERC-20 and ERC 721. So all these cryptocurrency project are built using ERC20 Standard. An ERC-20. Cryptocurrency projects are uniform, they are interchangeable, and they are also divisible. So if you have one BNB token, let's say if you have one BNB token, we can always break down your BNB token into multiple pieces. And you can also transfer those pieces to different people. That is your divisibility. Then you have interchangeable. If you have a BNB token or let us say one more cryptocurrency, like magnetic or manner you can transfer or we can swap these two different cryptocurrencies, then it is uniform. On the other side you have ERC 721 that is used by NSAIDs. When we talk about NFT. Every single nFET is unique, it is non interchangeable and it is non divisible. That means if you own a specific NFT or a picture or cryptography, or maybe any digital asset on the central end, then you cannot divide your LFTs into multiple pieces. If that specific NFT is built using ERC 721 standard. Also, you cannot exchange two different NSAIDs together because two different entities may have a different value. So let's say if you have let's say if you have an NFT of a grip properties or on the other side you have a board Yacht Club, then these two entities may have different value. So interchanging them at the same price may not make sense. So LFTs are also known interchangeable. They're also unique because every single nFET is in Hertz, some unique qualities from its parent. So I have a full course about NFP is metabolizers, AR VR. And you can have a look at that course if you wanted to know more about NFP, I have a full course about LFTs and you can look at that course if you wanted to understand more about LFTs and metaphors, or let's say other topic like AR, VR matter. 35. Block Chain Trilemma: Hey everyone. In this video we will talk about one of the biggest problem that is faced by almost every single cryptocurrency or blockchain project that is there in the market. That is your blockchain trilemma. Now let's simplify this topic by understanding all the challenges that are faced by a tedium. Because when we talk about blockchain, one of the most popular blockchain technology is epithelium. If you look at Ethereum, ethereum has so many limitation. So let's say it helium has a lot to output. That means it helium can process a very limited amount of transaction every single second. Also in helium has a very Google use. Also, a helium has a bad user experience because it, helium has a very high gas fees, slow number of transaction throughput, and this sometime cause clogging or slow process of transaction. And that's why we will understand about the blockchain trilemma. Now blockchain trilemma term was given by Vidal like butane, who is the founder of Ethereum. And he coined this term the blockchain. Try them on. Now if you wanted to create an ideal blockchain, that specific blockchain short satisfy all of these three main feature. That is your scalability, security, and decentralization. But in reality, every single blockchain around this world and maximize only two qualities out of these three qualities, they have to compromise on the third quality. If you look at Ethereum, ethereum is decentralized. It is secure, but it is not scalable. And similarly Bitcoin, it's secure. Bitcoin is decentralized, it is not scalable. If you look at Solana, solenoid scalable, it is secure, but it is not decentralize. Every single blockchain around this world can only maximize two out of these three qualities at the expense of the third. Let's talk about scalability. Scalability is the ability of a blockchain to accommodate an increased number of users and transaction. If I simplify scalability for you, scalability means how many transaction or specific blockchain can process every single second. For an example, it helium can process ten to 15 transaction every single second. While other cryptocurrencies like Cardano can process maybe one to 2 thousand transaction per second, then you have second problem. That is your decentralization. That means how many nodes or computers are running the same blockchain ledger at the same time. If you look at Ethereum or Bitcoin, millions of computers are running Ethereum main net or Bitcoin main net at the same time. Because you have millions of people, are nodes running the same ledger at the same time, so-called validator, that transaction speed with slowdown, but you have amazing security and that's why we have third, that is your security. Security is the ability of any blockchain to defend itself from attacks or from bugs, or from other issues like consensus mechanism. So again, if you have more number of validator or more number of people running the same blockchain ledger at the same time. Obviously it is super difficult to do a 51% attack. We had a discussion about that topic in the consensus mechanism video. And it is rare to find a single layer one blockchain technology that will satisfy all of these three conditions. A lot of people assume that Solana is satisfying all of these three conditions. But again, Solana is only having 100 nodes of validator. And that is why it is highly centralized and it's not completely de-centralized. Solana, it scalable if the secure, but it is not de-centralized because it is only having 100 or maybe 200 nodes as of now. If I summarize this complete video, every single cryptocurrency or blockchain technology can satisfy two out of these three condition. So Ethereum, Bitcoin, and decry, these are decentralize and secure, but they are not scalable. If you look at other cryptocurrency projects like ripple, NEO stellar, these are scalable and secure, but they're not decentralize. That means they have very less number of validators are nodes, then you have Nim and dash that are scalable, decentralized, but they're not secure. So again, any cryptocurrency project can satisfy two out of these three conditions. And that's why it is called as blockchain trilemma. Now let's map your consensus mechanism on this blockchain trilemma so that you can understand which consensus mechanism is super efficient. Let's talk about proof of work, which is in blue color. Can look at proof of work. Proof of work is highly decentralized. It is secure, but it is not scalable. And proof-of-work consensus mechanism is used by Bitcoin and Ethereum, then you have proof of stake. Proof-of-stake is not that decentralize. And but it is a little more secure and scalable. Then you have proof off Double committee. And this is also a type of consensus mechanism. But again, the main aim of this video is not to tell you which consensus mechanism is super efficient because we are going very fast on into this blockchain technology and we have a new update every single week. I think right now we have more than 30 or 50 consensus mechanism. You can understand how fast we are going into this blockchain technology. So the main idea of this video is to help you understand about the blockchain trilemma and how you can fit different consensus mechanism into this blockchain trilemma. Now we need to create something that is close to this ideal. Obviously the super difficult to create an ideal consensus mechanism. Now we need to create this ideal consensus mechanism that is close to ideal, which is scalable, secure, and decentralized. Let's look at the blockchain benchmarking based on the transaction throughput, the transaction fees, and which consensus mechanism they are using. Now let's have a look at the blockchain benchmarking of these different cryptocurrency project. And let's understand them or let's benchmark them based on transaction throughput, transaction fees, and your consensus mechanism that they are using. An a quick disclaimer, all of these cryptocurrency project Of are going through a massive change. So you have a new update every single week. So by the time you're watching this video, there are a couple of changes that have happened into all of these benchmarking index. You have to update yourself from Google or from any other source. So if you look at Solana, Solana claims that they have a transaction troppo 50 thousand to 65 thousand transaction per second, the glimpse this number, they have never perform these many transaction in the real world. Then you have Ethereum, which 25015 to 30 transaction per second. Then you have Cardano, avalanche, polka dot and algorithm. Again, this is electric old benchmarking index. Now Cardano can do 2 thousand transactions per second, and Ethereum is now switching from proof of work to proof-of-stake and helium mean net cannot do 1000 or 1000 transaction per second. But again, you always need layer two and layer three solution to scale it tritium. And we'll talk about the scalability of Ethereum in the coming videos. Then you have transaction fees in Solana, the transaction fees is 0.00025% in the transaction fees in case of Ethereum can go up to $250 per transaction. Again, this is not a proof that Solana is much more efficient than Ethereum because of the Lana is highly centralized because of a very limited number of validators are nodes that Solana half and the tedium is highly decent lies. If you have a cryptocurrency that is highly decentralized, obviously you have to compromise a bit on speed and transaction fees. Then if you look at consensus mechanism, Solana is using proof-of-stake, and they are also using proof of history as the consensus mechanism. Tdm is using proof-of-work and other cryptocurrencies are using different consensus mechanisms. So avalanche algorithm, polka dot, all of the, all of them are using proof-of-stake as the consensus mechanism. But I think by the end of 2020, it, helium will also switch to proof of stake as the consensus mechanism. So if I summarize this video, there are some effect quickly summarize the problems that are faced by Ethereum. So many blockchain are facing the problem of scalability. So if I summarize the benchmarking video, there are so many cryptocurrencies like it helium that are facing issues related to scalability, transaction latency, and high transaction fees. Because obviously it helium can only process 15 to 20 transaction per second. Deuterium has a very high gas fees and the Ethereum mean net is plotted because you have different other projects that are also rolling up all of their transaction back to Ethereum mean net because so many NFT marketplace is decentralized apps or decentralized finance are using ethidium mean net as the supplement layer. So we need a new blockchain or a new layer two, layer three solution to scale it helium and to make it helium faster and cheaper. And these are the two things on which we are struggling with the tedium right now. In the next video, we will talk about the different Ethereum scaling solution like side-chain plus machine, Zika roll-up, optimistic rollup. And we'll talk about all the possible solution with the help of door's layer two solution. How can you scale it helium? In the next coming videos, we will talk about all the possible solution by which you can scale it helium. We will talk about Layer 0 and layer two solution. If you wanted to scale it helium or let's say transaction throughput, or if you wanted to meet these transaction a little cheaper. And in those videos we will talk about polygon Z, cute, all lobe optimistic rollup, and all of these scaling technology that are being developed by these different cryptocurrency project. 36. Intro to Blockchain Scalability: Hey everyone. In the last video we had a discussion about all the problems that are faced by Ethereum blockchain technology. So that's why in this video, we will understand how can you scale it helium. And we will understand about the past, present, and the future of scalability. So far I think we are going great. I think you already have a good understanding about the basic concept of blockchain Ethereum smart contract. And that's why now we will understand about scalability and all the different types of solution we have to stay tedium. Now, when the bitcoin was first launched back in 2009, it became clear that by design, draw a couple of trade-offs that you have to do in terms of transaction. Because obviously, the main focus of Bitcoin was decentralization and security in bitcoin was first launched in 2009, it became very clear that by design, you have to have certain trade-off in terms of transaction speed because the main purpose of Bitcoin was decentralisation and security. Now bitcoin was a long chain of these individual blocks, and each block contains one MB of transaction, and it took about ten minutes to produce each new block. And once you have produced a block in the blockchain, then it will take a 45 to 60 minutes to validate that specific block or transaction. Now initially when Bitcoin was developed, they were aiming at 20 transaction per second. But in reality, Bitcoin was able to achieve almost four to five transactions per second. And after that, a lot of people then started developing these all the possible solution to scale the blockchain technology and the first scaling option that all of those people have in mind back in 20102011 was to increase the block size. So you're basically stuffing each block with more number of transaction by making the block bigger. So obviously to make this block bigger, you have to hard pocket. And that's why after Bitcoin, you got so many new altcoins like a light coin, bitcoin cash, VN, they have just increase the block size so that the transaction throughput will increase by two to ten x time. And the best example of this was Litecoin and Bitcoin cash. And they were having a bigger block size, saw that it can store more number of transaction within the block at a time of Ethereum, Bitcoin was also looking for some more scaling solution. And one more scaling solution was off-chain computing. So let's say you have a normal blockchain, and instead of computing these transaction into the main neck or the main blockchain, you will process these transaction outside the blockchain and then you will most, all those transaction or all those individual block inside the main blockchain. Because we all know that all transactions are not very important. If you look at these two transaction now in these two transaction of STD foss transaction where you are processing a land deed agreement. This is very important in that situation. Maybe you can process this transaction directly on the Bitcoin main net or let's say Italian, because obviously this is the example of a smart contract. And smart contract will always process in Ethereum or any blockchain where you can deploy your build smart contract. You will process the first transaction may be directly on the main net. And maybe you can process all of these smaller transaction. I'm outside the blockchain and then you can feed back all of these block inside the main blockchain. So many transaction like these micro-payment and be processed off gene. And the mean net or the main chain will then act as a settlement layer. Now the best part about this off-chain computing is that it will still give you the benefit of on gene Rican solution for transaction over time. And the best example of this off-chain computing and then canceling it back or merging it back into the main net is your Lightning Network. Now once Bitcoin and Ethereum and so many other cryptocurrencies are there in the market. Some people total of one new scaling solution. That is scaling through on chain charting. Let's understand this with the help of this diagram. Now instead of doing often scaling now you, now you will break down the main chain into multiple shards and all of the charts we'll process transaction between different people. And each charts will work independently or they can also interact with each other if that is required. But the mean proposal, sharding is to form a transaction cluster across different communities. And let's understand that with the help of an example. So let's say in one chart or in one gene you have all those transactions that are happening in a stripping network and Singapore. And let's say in another shot you have all those transaction that is happening in an e-commerce marketplace in Mexico and let's say entered chart, you have all those transactions that are happening between these freelance community in volume. Now, all of these charts are very different than these transaction may not overlap with each other. You can also use a sharding approach of where you will break down the main chain or the main net into multiple chart. And the chart can facilitate all of these transaction. And the best example of sharding is selling. Now, obviously there are so many complicated infrastructure diagram for this charting. You can do shutting this way or that way. Again, it's very subjective and many people came up with a different approach of sharding and making different cluster based on different situation, use-case or communities. Right now in 2022, you have so many different scaling solution around us. And in the next video we will discuss about all the possible scaling solution for helium. But again, you have so many different cryptocurrencies and blockchain project. And every single blockchain project or cryptocurrency have a different scaling solution. And we'll talk about all of these scaling solution like layer when scaling solution layer to scaling solution, layer 0, scaling solution, Zeger all up. And we will talk about all of these scaling solution in the next video. 37. Ethereum Scaling Solution: Hey everyone, My name is deep. And in this video we will talk about Ethereum scaling solution. So as we all know, the transaction throughput or the transaction per speed on intermedium is very less. Currently, Ethereum can process 15 to 20 transaction per second. And that's why to increase the transaction property or to improve the user experience in Ethereum, we have to understand about these different scaling solution that are there we loss so that your decentralized apps or dabs or d Phi platform can reach billions of user. And we can build these social media apps or all of these decentralized exchanges on the top of Ethereum. Let's understand about all these Ethereum scaling solution. But before that, let's understand our primary goal. We talk about scaling. Our primary goal is to increase the transaction speed or transaction throughput. And we also have to maintain decentralization and security. As we all know that helium is considered as one of the most de-centralized and secure blockchain when it comes to smart contract, again, Bitcoin as split, more secure and decentralized standard tedium ethereum. It's still at the top when it comes to decentralization and security. And that's why you will see majority of the people who are just talking about Bitcoin and Ethereum because they did not crossed all of these other cryptocurrencies in the long run, not in the short run, in the long run. If I give you a very small comparison in terms of transaction speed, you can look at the transaction speed of all these different companies. If you look at Visa or MasterCard, they can do 24 thousand transaction per second. If you look at Ripple, ripple can do 1500 transaction per second. Paypal can do 193 transactions per second. It's helium can do 20 transaction per second, and bitcoin can do seven transactions per second. Again, please take this as a pinch of salt because every single week you have a new update and these cryptocurrencies will always increase their transaction throughput, maybe every month or every single quarter. Now the best possible way to increase this transaction per speed is by using multi-gene side gene layer two solution or layer 0 solution. And we'll talk about that in the next slide. And Ethereum, which can currently processed 15 transaction per second after these multi-gene side-chain layer two solution, it can process thousands of transactions per second. Obviously, as we all know, the current gas fees in case of Ethereum is maybe handout two hundred and three hundred dollars depending on how crowded the Ethereum main net is. Currently, this is very high blood. Again, if you use these multi-gene side-channel layer two solution, you can always reduce down the gas piece or the transaction fees on the ethidium mean net. Now before we jump directly into layer 0, layer one and layer two solution, let's understand the two very broad option of Ethereum scaling that we have. The number one option is your onchange scaling. And the number two option you have to scale this ethereum is your off-chain scaling. Let's understand about these two broad option. And after that we will understand about layer 0, layer one, and layer two scaling option. Let's talk about on gene scaling. Now the main purpose of doing onchange scaling is to increase the capacity of the core blockchain or the mean net of any specific blockchain. And that's why in the last video we had a discussion about multiple approaches that you can use to do onchange scaling. Now, the two best approach to do onchange scaling. One is to increase the block size and second is by sharding. Again, you cannot increase the block size beyond a certain limit and also you cannot do in finite charting because that will also create many problems if I simplify you this onChange scaling. So this is your main chain, that is the primary chain that is run by millions of people at the same time. This is your main chain. Now obviously this can be tedium or bitcoin. Currently we are discussing about Ethereum. So let's consider this as the Ethereum main chain. Then you have a beacon chain, and then you have multiple shot. And then you have all of these people doing these transaction. So this is the example of your own chain scaling. Again, we'll go deep into on chain and off-chain scaling in the next video, but this video is a high level overview of scaling. Another example is your off-chain scaling, where you are doing all of these transactions outside the mean at and then you are rolling back all of these transaction back to the mean net. And in the next video, we will discuss about all these different types of off-chain scaling solution that we have. So often scaling commonly refers to the creation of additional layer that is capable of handling these transaction without relying on the code blockchain or the mean net. You'll have your main blockchain or let's say Ethereum may net, and then you have all these different side chains. So you have your side-chain, a, B, and side chain. So all of these transaction happens on deed side chain, and then these transaction will be reconciled in the main chain. So if I summarize off-chain scaling of gene scaling is the example that includes the batching of these multiple payments into a single transaction, a payment channel or site gene. And the core idea of having off-chain scaling is that you should always use the main blockchain or the main net as the settlement layer. That means we are using it just to settle down all of your transactions so that trust, security and decentralization is maintained. Another option is plasma, which is a layer two scaling solution. And this plasma or chain or a layer to scaling solution was first developed and used by polygon at large-scale level. But in the next video, let's discuss about all these blockchain scaling solution. And we will talk about Layer 0, layer one, layer two, and layer three scaling solution. 38. L0, L1 and L2 Scaling Solution: Hey everyone. In this video we will understand about all these different types of blockchain layer. And we will understand how can you increase the transaction throughput or so-called speed the transaction fees with the help of all these different types of layers. Let's start a video with layer one solution. And after that, we will understand about layer 0, layer two, and obviously some layer three apps as well, like a decentralized scheme or a cryptocurrency is game. By the way, I have a full course on metaphors and LFTs. And you can, what about all of these topic in that specific course? I have covered all of these de-centralized games or NF2 or digital asset in that horse. But again, let's talk about Layer one solution. Layer one are all those blockchain that process and finalize all of these transaction on their own Blockchain. So if I talk about Ethereum, bind ends Solana, and settle. These are the typical example of layer one solution because if you're only using binding smart gene or Ethereum, you will process a transaction directly on the layer one, you do not need sharding or off-chain scaling or plasma chain. You are directly doing every single transaction into the main chain. And this is where things like consensus mechanism and all the technical details like block time and dispute resolution take place. In case of helium, you have your proof of state. In case of Bitcoin, you have proof of work. In case of Solana, you have your proof of history. And so many other things. Because all of these transactions are happening in the layer one and you're also settling these transaction on the same layer. That is why it is super difficult for L1 to conquer the blockchain trilemma. When we talk about blockchain trilemma, every single blockchain can only get two out of these three feature. And so far in 2022, no single blockchain has nailed all these three. That is your decentralization, security and scalability. Let's your layer one. Let's talk about Layer 0. Layer 0 is your ground floor, and this is where the internet, the hardware, and the connection exists. And this allows your layer one solution like Bitcoin to run smoothly. Layer 0 normally allows different blockchains to interact with each other. So if you look at one of the examples of layer 0 like Cosmos, cosmos create an ecosystem of all these interoperable blockchain, saw that decentralized apps can function in one blockchain. Let's say if you're building a decentralized app in the future, and let's say if you're using maybe Ethereum as the primary blockchain, then without Cosmos, you have to build the same decentralized app for every single blockchain. But if you're using platforms like Cosmos, you do not have to invest more time or resources in building the same decentralized app for every single blockchain, like Solana or Ethereum, B&B. The second feature of layer 0 solution is that it will provide you a faster and cheaper transaction. Also, they will provide infrastructure for developers because they have so many features that are pre-built. These developer can directly use these pre-built components or feature and they can implement the adapts or project very quickly. Now let's talk about the layer two solution that is the primary focus of our next video. And in the next video we will understand about ZK roll-up polygon and optimism. Now layer two are these third-party integration that are used with layer one to increase scalability and transaction per second. The main purpose of using layer two is your speed, or so-called scalability. When you hear about Zika follow-up or let's say side chain or anything that have something to do with speed or transaction throughput. Two answers are that you are talking about layer two solution, and at the top you have your layer three solution. Now, layer three is your application layer. Then we have layer three, and layer three is the application layer. And this is the UI that we as a consumer actually interact with. If you talk about games like Socrates, or are decent lies land, like de-center land, or a decentralized exchange like unit swept all the olive. This is a good example of layer three solution. 39. 1. what is polygon: Hey everyone, My name is now deep. And in this video we will talk about polygon. So if you are into Web three or blockchain, I'm very sure that you are part of polygon. Now, the reason we will be using polygon or as the Ethereum scaling solution is because Ethereum mean net is overcrowded and the gas piece on Ethereum minute is very high. And also not every single transaction should go directly into the Ethereum mean net. If I'm transferring, let's say a very small amount of money to my friend. Well, that transaction should not be directly recorded into the main net. You can use a scaling solution and then you can batch all of those transactions together and then you can feed them into the main net. So according to ether scan, the average gas phase only tedium mean net jumped from ten GHz. Why not? Why is the unit of Ethereum gas fees to 80 Guai now in 2022. If you look at few of these chart, these charts will help you understand about the problem with Ethereum mean net because it's linear mean that is crowded. And a lot of companies are using a TDM mean net to batch all of the transaction or data. It is somewhat overcrowded. And that is why we use this scaling solution. Like polygon. This is the average gas plays in the tedium from January 22, January 2022. Then you can look at the polygon P versus V tibial daily transaction count. So if you look at the daily transaction count, this is the daily transaction count of Ethereum. And at the top, this is the polygon POS delete transaction count. Now remember, polygon itself is not a new blockchain. Polygon helps Ethereum to scale it. So polygon is built on itanium. And that is why they are issuing a new doctrine by itself that is somatic. Then if you look at the polygon P US versus Ethereum daily average USD transaction costs. Obviously the transaction cost on Ethereum is really high, also known as your gas fees. And the transaction costs, or I would say the gas phase in case of polygon is very less. One of the reason is obviously the decentralisation. Because Ethereum is highly decentralized and Ethereum have millions of North around this world. That is why the gas phase and the tedium is very high. Because these scaling solution are bit centralize the transaction cost. Or I would say the gas piece in these of scaling solution is very less. Now let's talk about the features of polygon because polygon combines the best top it helium, and solve it in blockchain into an attractive feature set. Let's look at the features of polygon and vide developers prefer using polygon instead of directly interacting with the tedium. The first feature is your ethereal compatibility. So a polygon is pretty tone, it helium, and it allows Ethereum to scale the transaction by batching these different transaction and then it will feed into the Ethereum Mininet. Now when it comes to Ethereum compatibility, one of the most important term is your EVM, or Ethereum Virtual Machine. And we will cover about EBM in the coming video. But because polygon is Ethereum compatible and Ethereum is the market leader in case of smart contract. And as we all know with the help of smart contract, you can build decentralized app. And to understand about decentralized app. In the coming video, we will understand about the Web three stack. In that video, we will understand about all those technology that you can use if you wanted to build a web three application, also polygon it scalable. That means you can do thousands of transactions per second with the help of polygon. And that is nearly impossible in case of Ethereum because it helium only process maybe 15 to 20 transaction per second, then the security and obviously it helium is way more secure than any other blockchain. But on the other side, polygon also batch the transaction on the Ethereum minute. Somewhat. Polygon takes the security feature from the Ethereum, and that's why it is considered as secure. You also have all other features of polygon like sovereignity, interoperability, user experience, developer experience, and modularity. And we'll talk about all of these feature and then we will build a smart contract of using alchemy. So in the last section, we will also build a smart contract using alchemy. And we will understand about the web a3x deck. In that video, we will understand about hardhead, either GS and alchemy. And that's gonna be a little difficult video for a normal person to understand. But we will understand about user experience, developer experience interoperability, and all of that in that specific video, you can still read about all of these things in polygon. But I think we have to understand all the challenges that are there with the tedium. As we all know, polygon is a protocol and a framework for building and connecting Ethereum compatible blockchain network and polygon allows you to deploy your smart contract. And just one-click because polygon is using EVM or Ethereum Virtual Machine and they have so many new or piece of technology to scale it idiom. So if you wanted to build a decentralised finance, then you might be using a different polygons solution on the other side, if values, if you are building a decentralized app, in that case, you might be using a different polygons solution. And polygon is also interoperable. That means if you have a specific piece of technology but it on different blockchain, they can also interact with each other. It would be help of some oracle. And we'll talk about Oracle in the coming video. Now let's understand about the product stack of polygon. What all products just polygon half. As we all know, the first blockchain that was designed was not having a very high transaction throughput. That is why these layer two technologies are discovered like polygon. Polygon started off with polygon pos and polygon side chain. Now these genes were having a high transaction throughput, also known as your PBS, or transaction per second. And these were also very cheap, but they were not very secure. And that is why today, polygon is now building a new stack of technology, also known as your L2 roll-ups or Lear to roll-ups. And I have a video about secant. All of s1 polygon is an Internet of blockchain company focused on scaling deuterium through the portfolio of z k technologies. Now with the help of polygons or user can interact with any decentralized app without worrying about the network concession. And as we all know, polygon started off with polygon BUS and polygon plus machine. 40. Polygon POS: Let's understand about polygon BOS. And that was the first deuterium scaling solution that was built by polygon. And now polygon have a suite of different products apart from polygon BUS. This is your metric side chain. So polygon was previously known as somatic network. And this is your Ethereum main net, and then you have these different route chain. Now these root chain will combine all of these different batch of transaction together into one specific node, also known as your public plasma checkpoint naught or POS node. And then they will feed these transaction back to the tedium mean net. Now when you batch these different transaction, basically you will split down the Ethereum gas phase equilibrium between all of these transaction. Let's say if I'm sending you $1 and if we do this transaction on Ethereum minute, in that case we have to be a 70 to $80 gas. On the other side if let's say 5 thousand people are doing the same transaction. And then we would batch all of those transactions together and then we will feed those transaction into the ethidium mean net. Well, in that case, the gas phase will then split among 5 thousand people. And that was the main purpose of polygon. You have your metric chain and you have your Merkle root. And this is your checkpoint, which is your POS checkpoint, and this is your Ethereum main gene. So this BUS checkpoint will batch all of these transaction and then these transaction will pass through this BUS checkpoint and it will follow p these transaction back to the Ethereum mainland. That was the functioning of polygon P OS. But now you have these different types of L2 roll-ups. Let's discuss about two of the most important a2 roll-ups designed by polygon. The first one is polygon Hermes, which is widely used by these decentralized exchange. Polygon is the market leader when it comes to Ethereum scaling solution and a lot of decentralized exchange are using polygon Hermes. All the transactions that are happening on polygon Hermes, a polygon, armies will batch all of these transactions together in one single block, and then they will validate this block by sending this specific block into the Ethereum main net. And then the Ethereum gas phase will be divided among all of these different transaction that is happening on polygon armies. Polygon Hermes was the first open-source decentralized Zika ROLAP to operate on the top of Ethereum main net polygon. Hermes is able to process almost 2 thousand transaction per second, and this transaction throughput or transaction per second will increase once Ethereum implements sharding. And I think the merger is going on right now. The latest technology that polygon is focusing on is your polygon 0. And the main purpose is the speed, or also known as your transaction per second or transaction throughput. And polygon 0 is the voltage fastest on z cube rollup technology and the main focus here, its speed. The optimal solution discovered so far is true scalable ZK, snark, otherwise also known as your recursive proofs. And we'll talk about ZK roll-up in the coming video. So if you look at polygon, polygon P side chain is the industry leader with nearly $5 billion in value deployed over a 100 decentralized finance or DeFi and gaming application. Including so many apps that we are very familiar with like RB, Susie swap, as well as unit swap or quick swab. And if you look at the daily transaction count on Ethereum mean net versus polygon. Polygon has a higher transaction count when compared with the tedium. And obviously one of the reason is your Gatsby's, the gas phase on the tedium is so high that a lot of people prefer doing these transactional polygon and later polygon will batch all of these transactions together and it will validate those transaction on the Ethereum minute so that it can distribute the gas phase among all of those transaction on Ethereum. Or people will always do a high-value transaction. While in polygon, people are doing a low-value transaction. Let's say you wanted to transfer ownership of an NFT that is very expensive. There is a very high chance that you are doing that transaction on the Italian minute. On the other side, if you are just transporting a very small amount of money, or let's say if we adjust both GZ and NFV, that is not so expensive. In that case, you can use polygon. And this is the ecosystem of polygon, which is from gaming to Oracle, to infrastructure to d phi to NFT to wallet. Every single sector is using polygon. If you look at, if we talk about decentralized finance or DeFi, platforms like RV, garb finance, sushi scrap, all of them are using polygon. Also, if we talk about NFT platforms like open sea, they are also using polygon. And if we talk about some gaming platform like dissenter land or MCS, they are also using polygon. And then you also have Dao, oracle like chain link or infrastructure like the graph or some B2B platform. All of them are using polygon. This is the polygon adoption map, and there are more than 400 decentralized apps deployed so far on polygon. 41. Everything about Ethereum Rollups: Now let's talk about the problems that is there with layer one scaling solution. When we talk about Ethereum, as we all know that Ethereum is highly decentralized and it is the most secure blockchain. And that is why a lot of layer two solution will use Ethereum to make sure that they are using the security of Ethereum. And they are doing all of these small transaction outside the ETM may net saw that they can reduce down the gas piece. But all of these layer to scaling solution also create some form of competition to layer one solution. They are somewhat very competitive when it comes to the ecosystem because lot of people are very tight with epithelium, but they cannot use Ethereum and they have to use this layer to scaling solution because obviously these layer two will somewhat compromised on security because relegating and securing the transaction in Lear to spread complex. But using layer one is also a big problem because you can't directly use Ethereum minute to feed back these transactions because of high gas phase and the solute. And the solution to those problems is your roll-up. You have your L1, which is ethidium mean net, and you have your elbow rollup. And instead of batching these transaction now every single transaction will rolled up. So instead of executing a batch of transaction, you are now executing a small group of transaction into the main net. When we talk about ROLAP, we have two different types of ROLAP. We have optimistic rollup and z k roll-up. Zk is also known as your 0 knowledge proof roll-up. When it comes to identity verification, we use z k roll-up. Talk about both of these in the coming video. But before that, let's talk about the different types of ROLAP we have. We have optimistic roll-ups, also known as RS. And we have Z k roll-up also known as your 0 knowledge proof rollup. And even inside this rollup, we have data store it. So if you are storing data of gene and on teen, you have these different types of ROLAP. You have 0 knowledge proof, also known as your validity proof, and you have interactive deposit slashing fraud proof. So plasma would starting off chain data and this was the first scaling solution that was paid by polygon. And when it comes to ZK roll-up, you have both chain data storage and onChange data storage. And both of them have advantages and disadvantages. If you talk about the off-chain Zika roll-up, then you have technologies like Valium and start where. But on the other side, if we talk about on chin ZK rollup, then we have z casing, labouring. These protocols will store transaction data on the main chain, but move transaction activity to decide gene. And this is possible because your main chain and side-chain are interoperable and they can run in parallel and continue to communicate. Your optimistic roll-up is ensured by fraud proof and your ZK roll-up when we talk about Zika, Zika rollup or is held by smart contract on the main chain, but it performs all the computational and storage activities of gene. The validation of TDD side-chain is done by 0 knowledge proofs. So in a nutshell, layer two solution are independent ecosystem that will sit on the top of Ethereum, but they still have to rely on the security of helium because helium is highly decentralized. And that is one of the reason why it is slow in layer two rollup or there is more need for native token like medic. And hence it is more complimentary to Ethereum because previously, because all of the scaling solution were having their own native token, it is somewhat competitive to the mean net, so-called Ethereum as well. And that is why in the Ethereum roadmap, it was more open to the idea. By scaling Ethereum with the help of roll-ups, these protocol or will store the transaction data on the main chain, but move the transaction activity to the side chain. Because main chain and the side chain are interoperable, they run in parallel and continue to communicate. And it will look something like this. Let me quickly summarize this video because in the next video we will understand about ZK roll-up, also known as your 0 knowledge proof problem. When it comes to Ethereum scaling solution you have on gene scaling, which is your L1 scaling. Our now the only way it tedium can scale by itself without the use of these other scaling solution is by sharding. Sharding is the splitting of the mean net into smaller blockchain by itself so that they can talk to each other. But charting is a bit inefficient and asynchronous. So let's say if you break down the mean neck or the Ethereum main net into three different types of blockchain. And let's say if you allow those three different blockchain to communicate with each other, while there will always be a small delay when they transfer some data or the fetch some transaction between each other. That's not reliable. And that is why you use often scaling. In scaling the only possible solution, it's sharding, which is dividing the main blockchain into multiple shots. When it comes to off-chain scaling, you have state channel, you have custodial side chain, and you have non-custodial side chain. And all of these have different use case. But in this video we are talking about roll-ups, which is the example of non-custodial site gene, where we are borrowing the security of the tedium and validators can also run the dispute came when we talk about ROLAP. We have z, k, rollup and optimistic ROLAP. The main focus of the next video is your ZK roll-up. 42. Zk Rollups like I am 5 ?: Hey everyone. In this video, we will understand about ZK row node, also known as your 0 knowledge proof roll-ups. And before going deep into wheat, let me oversimplify. Zika roll-up saw that even a five-year-old can understand. So ZK it all up. It will allow you to convince the other party that you know some secret or something without actually revealing that to someone. We will understand this topic with the help of few examples. You have two frames, Alice and Bob, who are racing to find value in a popular children's book series. Now Alice said that he knows where boys and Bob replied by saying that he's lying in this case. Now Alice doesn't want to tell the exact location of value. So now he has to prove that he is there in this specific scene without actually revealing his location. Now to defend his integrity, Atlas devices to solution, to prove hard knowledge. In proof one, unless guards out Waldo from her scene and only shows both the code snippet to ensure that Alice then just print out a new picture of variable. Or the second proof or possible solution for this problem is that Alice cut a hole into a very large or back seat of cardboard, and she places the cardboard cutout on the top of the original scene. Now with the help of these two solution, now Alice can show us the exact location of value without actually revealing the position in that picture and foster possible use case. She's just cutting out the location of value and showing it to bulb. In second use case, she's cutting out the blank sheet of paper and then she's putting out this blank sheet on the top of that picture. Solve that now bulb can see the value of code snippet without knowing the location of this guy into the complete picture. Now both deed solution fulfill the three important properties of 0 knowledge proof. That is your soundness, completeness, and 0 knowledge. Now the first property of secant on this proof is your soundness. That means Alice can claim that she knows the location of value. Second is your completeness. So apart from claiming that she knows the location, she can also find that specific person, the picture. And the third one is your 0 knowledge. That means she can exactly reveal that specific person without revealing the location of that person. That is your 0 knowledge. If you look at these three things, she can claim that she know the exact person into the picture. So you can also show you that specific person without actually revealing the location of that specific person. So soundness, completeness and 0, no list are the three most important characteristic of z k. Now obviously this is the oversimplified version of Xcode or loop. And you can implement the same z, get all up in the possible different use case that you have in Web three app. And we'll talk about that in the next slide. This, because this is the non-technical explanation of a very technical topic. That is your Zika. Again, this technology is not built by anyone so far and all of these Web three companies are still working on building this technology. And you will understand about the possible use case of Zika role of SQL. But let's understand the possible use case of Zeger. Don't know. The first possible use case of Zika roll-up is logging into a website. Rather than typing a password into an unsafe website, you can simply send a proof that you know the password. Second possible use case is authenticating your identity. So rather than giving your mother's name over the phone to add random guy or to a bank called central region, you can simply send a proof like a cryptographic fingerprint. The third possible use case of Zika roll-up. It's sending a private blockchain transaction. Rather than sending Bitcoin, which is publicly available to every single person, you can just send a proof that your money is valid without actually revealing the balance in your vaulted. And this was popularized by Z cache. 43. Web 2 architecture of medium web app: Here we want. Now in this video, we will understand about a web to architecture. Because in the coming few videos, we will build a smart contract. And with the help of the smart contract, you can also build your own decentralized app. But before understanding about smart contract and decentralized app, we first have to build a very strong foundation when it comes to building tech product. And that is why in this video, we will first understand about web to architecture that we all are using in our day-to-day life. And then we will understand about Web three architecture. And then we will combine our knowledge from web to and Web three. And then we will build a smart contract would be helpful. Polygon, Ethereum and couple of other JavaScript library like ITO, gs are in Web three gs. And then we will understand how can you build your own smart contract? And obviously, if you combine all of these different types of smart contract together, you can build your own decentralized app. Now if you look at a web three architecture of Web three architecture look something like this. And I know this looks confusing to a lot of people, but please do not worry about that. We will understand about every single element in this Web three, tech, stack or architecture. But before understanding Web three, we first have to build a strong foundation by understanding a normal web do architecture. Now let's understand about the web to architecture by taking medium as an example. In case if you do not know about medium, medium is a simple blogging website where you can publish your own content just like WordPress or block spot. You can publish your own article, your own content on medium. So in this video, we will understand about the Web T2 architecture, or I would say the infrastructure of medium, and we will see how exactly medium work. So if you look at a normal web application, you have your front-end and back-end. The tiny visit facebook.com, whatever you see on that specific website, that is your front-end. All those different colors, all the different types of button you'll see on that website that is a part of frontend. When we talk about front-end. Or that website might be built on a front-end architecture like HTML, CSS, and JavaScript. And inside JavaScript you have these different types of frameworks like React, Angular, Vue.js and many more. Also in CSS, you have these different types of libraries, like your tailwind or bootstrap, then you have the back-end of the application, like your login, saving the details of the user. So all these back-end logic is taken care by this specific back-end architecture. So you can use a JavaScript runtime like NodeJS as the backend. You can also use these different types of Python web framework as the back-end like Flask or Django. You can use Java as the backend or maybe goaling as the backend. And then all of this, we'll see all of their data inside the DW database will have all of these row and columns are these database table. So let's understand about medium. At top we have database and database will store all the essential information like user data, how many posts that specific user is making, all the tags that are there in that specific post. Your comments, you would like all of this information will be saved in this specific database. Then you have the back-end. And back-end will basically maintain the back-end code or which handle all of this logic like login or sign up or publishing a new content. You can make your backend in NodeJS, Java or Python. And then you have your front-end. And front-end is normally written in the form of JavaScript, HTML and CSS. You can also use these different types of framework of JavaScript like Angular or React or Vue.js. And then you can also use these different UI libraries for CSS like Bootstrap or CSS steel ring and all of that. That is your front-end, back-end side for a normal web app. If you look at the architecture of Medium.com, which is a website where you can publish your blog article. Now let's understand how exactly a medium web app work. Let me take the laser pointer. And if you look at the medium web app, you have your DNS, which is your domain name service, Medium.com, facebook.com, google.com. All of this is the example of DNS Domain Name Service because every single web app that you visit have a server, like 192 dot something, something. And it is super difficult for every single person to remember the address of that specific server. That is why we use DNS or Domain Name Service, which will redirect that specific address to that specific server. It will redirect this.com to its specific server, like 1 ninth to dot core, dot whatever. Then you have the user browser, which is fetching all of this data from this DNS or so-called server with the help of some CDN provider. And when it comes to CD and you can use black forms like CloudFront or Fastly. These are all your CDN provider. Then you have these load balancer which will distribute these different loads of user into these different server. Or it will auto-scale when you have increasing the number of users on your platform. Then you have your cloud storage platform like AWS, Google Cloud Platform, microsoft Azure, or if you have a Web App Service which is deployed on a specific cloud storage platform with the help of CDN. This web service will be distributed among different people with the help of these load balancers. Then you have your DAW's which save all of the database of your end-user. Like how many posts a specific user is making, the comments, the like, the credentials and all of that detail, then you have a caching service. If you're using Medium.com. If you visit that website for the first time, it will take some time to load. By the time you visit any specific website. For the second time, it will locally store some file or it will catch some files so that can load it faster. Then you have certain job queue. So if you're making so many requests to a specific platform, it will queue the request so that it can perform a specific action and it will not overload or that specific web app server. Then you have your job service, also known as your microservice, which is made up of these different types of APIs. Let's say if you wanted to bolster specific article on Medium.com, in that case, you need API which can post a specific article. Then you also need another EPI or gravity to index that specific article. And there are so many things that are required to perform a specific task or action or jobs service. Now these are all your microservice. Then you have your Data Firehose, DWR house. If you're maintaining a backup and backup of that specific data. This is the normal architecture of any VAB to app that you use. So whether it is Medium.com or Facebook.com or any website that you use. The overall architecture is somewhat the same. Only these microservices will change. 44. Web 3 Architecture for Dapps: Now let's talk about Web three architecture, which is the focus of this specific video. Similarly in Web two, in Web three architecture, just like web to architectural Web three architecture also need a frontend part. You can still build your front-end with the help of HTML, CSS, and JavaScript. And nothing has changed over here. But in Web three, which is a decentralized platform, remember, the main focus of a decentralized platform is to make sure that no single entity on your data. In that case, you're not using your own server or a cloud storage provider to store your data. You might be using Ethereum blockchain or tedium mean net. This tedium mean net is run with the help AAC Ethereum Virtual Machine. You will be building a smart contract. Then you will deploy that specific smart contract on the Ethereum Virtual Machine. And then Ethereum Virtual Machine will help you run that specific smart contract on Ethereum mean net or Ethereum Blockchain. So let's understand about the Web three architecture. F3 will obviously eliminate the middleman. And there is no centralized database that stores the application street, and there is no centralized web server. The backend logic is maintained. In case of web two, you might be using a centralised web storage like AWS or Google Cloud Platform or Microsoft or 0, these are the example of all centralized DAWs or Cloud computing provider. In step three, we will leverage blockchain to build decentralized app on a decentralized state machine that is maintained by anonymous norms. So our main focus in Web three is to build a smart contract or that defines the logic of your application. And then you can deploy them into a decentralized street machine. And if you wanted to broadcast the transaction, are directly on Ethereum, it's super difficult to do that. And that is why you always have two options to broadcast to transaction, or let's say to interact with the smart contract. You can either set up your own node that runs on Ethereum blockchain software, or you can use node provided by third party services like infra or alchemy or quick mode. But let's say you're done with your decentralized app. But how will you allow users to publish content or let's say, to interact with your decentralized app. Because right now you don't have Google login or Facebook login. You want it to have a mechanism by which your user can interact with you, the centralized app. And for that you have to integrate MetaMask, which is an Ethereum wallet service. And with the help of MetaMask, people can directly interact with your smart contract or be centralized app. Now in mathematics, you can store a tedium or any other cryptocurrency that is pretty on ERC20 Standard. And we'll talk about ERC-20 in the coming video. And with the help of MetaMask, you can easily interact with any decentralized app or smart contract, and it will handle the key management or transaction sign-in by itself. But if you wanted to know a little more about minima, minimas will store the private key of a user in the browser. So whenever the front I need the user to sign in a transaction, it calls on MetaMask. Now let's interact with the small decentralized app or a smart contract in our browser. And then we will understand about the role of metal mask. 45. Introduction to Web 3 and Smart Contract: Hey everyone, My name is now deep. And in the last video we had a discussion about Web three tech stack and the architecture of Web three. Now, one of the biggest problem with Web three is the storage system. Because if you store all of your data on the main blockchain or on the main neck, then your cost will go very high. And that is why you have to understand about all of these different types of blockchain where you can store your data. And then you can use these different third-party naughts or, or accurate to interact with your main blockchain. So anyone can build decentralized app on Ethereum. But if you store everything on the main neck or the Ethereum blockchain, then things will get really expensive. Now, one way to combat this is to use a de-centralized off-chain storage solution like IPFS or swarm. And IPFS is best suited to store NFP. I think in the recent few years I have seen almost maybe 90 to ninety-five percent of all entities are stored in IPFS. When I'm talking about NFP and talking about these image file or a JPEG file. So IPFS is a distributed file system for storing and accessing data. And it will basically store your data into peer to peer network. And this will make it easy for you to retrieve that the dub whenever you need. An IPFS also has an incentive layer known as phi equal. So this is the native token of this specific blockchain. Now let's understand about the process of querying the blockchain. And we will understand how will you read data from a smart contract on a specific blockchain? Now the first one is your smart contract event. So anytime something happens on the blockchain or your smart contract, you need these libraries like pep three GS, which is a JavaScript library to listen to the smart contract. And then with the help of these Web three library, you can see all of that data in the adjacent format. And then you can show that data on the front end to the end-user. Let's see if you have a smart contract a, where a person a send some amount of money to a person B. And anytime that specific event will happen, we will listen to that event with the help of these three JS library. And then it will throw that specific data into adjacent format. And then we will show that specific JSON payload to the user on the front end that there is a transaction that is happening in this specific blockchain. And to oversimplify this process, you can use these different types of third-party nodes like alchemy or in food up. And there are so many naughts service provided novelties. And if you have problems understanding all of these things, then please wait for a while and we will build a smart contract. And then you will be able to understand everything by yourself. And if you're building a decentralized app, which is a combination of different types of smart contract. Then using callback to handle various UI logic will get complex very quickly. And that is why you can also use our obtain indexing solution like the graph. You just have to define which smart contract to index or which event or which functions called to listen to and how to transform the incoming event. And then the graph will manage everything by itself. And it is using GraphQL as the query language. So in case if you're not sure about GraphQL in web tool, you have two ways to build your API. You can use the rest framework or the rest approach, and you can use the GraphQL framework or the approach. So let me quickly summarize things so far, you have a browser where the user is interacting with a specific decentralized app. And the user is able to sign in into this specific decentralized app with the help of MetaMask, then you have your front-end, which is made up of normal JavaScript. You can use React on Angular or any other front-end library. And then you are storing all of your data into IPFS or swarm. And this is a decentralized storage system. Then you're using a third-party node from alchemy or in Europe, or from any other company that you know. And then this third-party node will help you interact with this specific smart contract that is deployed on Ethereum Virtual Machine. And then the Ethereum Virtual Machine is running the Ethereum main net. But one bigger problem when it comes to scaling your decentralized app is your gas fees and bad user experience with the Ethereum mean net. That is why you can use the Ethereum scaling solution like polygon. When we talk about Polygon. Polygon have these different stack of solutions from ZK ROLAP to polygon POS. You can use all of these side-chain that will process and execute this transaction. And then it will bundle or aggregate all of these transaction. And then it will feed these transaction back to the Ethereum mean net. And it will look something like this. So you have these different side chain which will bundle all of these transaction to the inferior mean net or the mean blockchain that is there in case of Ethereum. 46. Architecture Layers in Web 3 tech stack: And before we build a smart contract, let's understand our complete infrastructure layer that you have in almost any app that you can imagine. Let's understand this specific topic with the help of these different types of layer that you will see in Web three. At the bottom, you have your protocol layer. And in that specific protocol layer, you have all of your blockchain technology, Bitcoin, Ethereum nano avalanche cost, most bindings, smart chain, optimism polygon. These are all your L1 and scaling solution, which is your layer one and scaling solution. Then you have these different types of bridges in the protocol layer. Then you have your infrastructure layer where you can do these different transaction on exchanges. You can buy and sell these different cryptocurrencies. You can borrow and lend your money. Let's understand about all these different types of layers. And if you closely look at your Web three, your Web three is built on all of these different types of layer. At the bottom you have your protocol layer, which is made up of all your layer one and scaling solution, then you have your infrastructure layer. And infrastructure layer is solving one problem at a time. Then you have your special use-case layer, and finally your access layer. With the help of access layer, these different users can interact with these decentralized app. Let's understand one thing at a time. And let's start off by understanding our protocol layer. In the protocol layer, which is obviously the base of the complete Web three or a decentralized app. In the protocol layer, you have your layer one blockchain, and some scaling solution. This protocol layer is made up of Bitcoin or Ethereum or Solana blockchain. Then you also have avalanche, which is a little faster, but it is EBM compatible, then you have Cosmos in and smart chain, optimism and polygon. And these two are elements scaling solution, also known as your L2 or layer two scaling solution. It is the underlying architecture and whatever you will be building in a decentralized app, you have to use this protocol layer or underlying architecture. You have your layer one smart contract platforms like the tedium, Solana, avalanche, and cosmos, that serves as the foundation of many vec three application that are currently in production. In fact, Bitcoin also have a few new updates. You have your Lightning Network for faster and cheaper payment with the help of Bitcoin. And you'll have stacks. With the help of stacks, you can build a smart contract on Bitcoin. Then if you look at Ethereum in Web 3, you have these different side chains like polygon pos, and you have these two print z, k roll-up solution like star where optimism and GKE snark polygon 0 and all of that. Let's understand about the use-case layer, which is built on the top of this infrastructure layer. But it is solving one problem at a time. The infrastructure layer will sit on the top of the protocol layer, and it is composed of interoperable building blocks. We call these interoperable building blocks as the category primitive. And these are doing one specific task at a time. We call this specific task as the smart contract. You can build everything from smart contract auditing software to a data storage platform, to some communication protocol. Or maybe a data analytics platform or tau for governance or some identity solution like civic or some financial primitive and many more things. Let's understand these things. So if you look at unit swap, swap is a decentralized exchange. There you can swap these different cryptocurrencies or these different doctrines or acid with one another. Then you have RVU. And RBA enables you to store your data in a decentralized manner. Just like our baby, you also have IPFS and five coin. With the help of IPFS and File Coin, you can store all of your image file, audio, or video file in an off-chain decentralized storage. And then that specific off chain will interact with your main net, which is your ethereum or whatever blockchain technology that you're using, then you have your ENS domain, also known as Europe Ethereum Name Service. So just like in web through, you need a DNS or Domain Name Service. Let's say you're starting a company with the name facebook.com or Google.com or YouTube.com. Well, that's the example of DNS or Domain Name Service. And similarly like DNS, you have ENS or IPM name service. So you can pick a small Ethereum Name like for me, let's say not deep dot ETH or whatever name you have, let's say your name dot ETH. That's your ENS domain. In infrastructure layer, every single cryptocurrency project or I would see a token, it's solving one specific problem. So if you wanted to buy and sell cryptocurrency, you can use these in exchange like curve or unit swap. If you want to borrow or lengths amount of cryptocurrency. You can understand about RB or compound. And then you have few market-makers. Some storage platform, some personal identity solution like unstoppable domain, ENS, civic, and all of that. Then you have a use case where a use-case layer will sit on the top of the protocol and the infrastructure layer. And it is solving one specific problem. So if you look at x infinity, x infinity is using Ethereum token and NF2. And same goes with the unit swap. With the help of units web, you can swap your ethereum token for anything that you want, like maybe some other grip programs see, or if you wanted to poach it some NFT or whatever, then you have decentralized blogging platform like meter in web tool, you can use these decentralized blowing black pumps like Medium.com. But for Web three, you have platforms like mirror. These black phones use some storage platform like our wave to store their data. And they do that by directing their specific doctrines to Ethereum Name, Service, Address. 47. What's Next: This is the end of the course. I hope you got a good understanding about Blockchain, cryptocurrency and maybe some layer one and layer two solution. Now one area that a lot of people are really interested in is metaphors. And that's why I've created a separate course for you about metaphors. And in that course you can understand about augmented reality, virtual reality and NFT is also known as non-fungible tokens. So if you're interested in understanding about why and how these big tech companies are investing heavily in metaphors. Well, in that case, you just need to click on My Profile. And then you can see all of my courses.