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Mission
Coin.Clinic’s mission is to educate people interested in cryptoeconomics and digital cash, also known as crypto currencies. Coin.Clinic was established in March 2017 by Michael Reuter, entrepreneur and co-founder of renowned Blockchain Solutions Provider Datarella.

Education and information – no advertising, no investment advice
CoinClinic is not one of the typical crypto currency marketing websites. You won’t find advertising or investment advice here. Coin:Clinic’s goal is to support you, the reader, understanding the world of digital cash. Coin.Clinic publisher Michael Reuter owns and trades crypto currencies but he or his editors will not provide you with any investment advice. Coin.Clinic seeks to educate readers in the field of digital cash.

What are Crypto Currencies?
Digital Cash or Crypto Currencies consist of token protocols using a combination of blind digital signatures and pseudonym authentication with at least two pairs of public and private keys. DIgital Cash or Crypto Currencies consist of token protocols using a combination of blind digital signatures and pseudonym authentication with at least two pairs of public and private keys. A user is provided with one master pair of private and public keys and as many pseudonym pairs of private and public keys as desired.

What are the benefits of Crypto Currencies?
The resulting digital cash token based hybrid protocols combine the advantages of blind digital signature and pseudonym authentication. Blind digital signatures based on the master pair of keys are used to withdraw digital cash from the user’s bank account under the user’s real identity. A pseudonym pair of keys is used for converting digital cash into digital cash tokens by a digital cash issuer. All pseudonyms can be used for spending the digital cash tokens. These protocols ensure anonymity when withdrawing digital cash from the user’s account under the user’s real identity in addition to providing pseudonym authentication when spending digital cash tokens under a pseudonym.

Crypto Currencies 101
Before you dig deeper into the concept of digital cash or crypto currencies, spend 4 minutes and watch this explainer by David L. Yermack, Albert Fingerhut Professor of Finance and Business Transformation at New York University Stern School of Business.

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The Top 10 Cryptocurrency Trading Platforms and Exchanges

Since the inception of blockchain technology, digital tokens have been issued alongside the respective blockchains. Many of them have evolved into veritable cryptocurrencies that are traded on specific exchanges. A brief look at the cryptocurrency market reveals a huge money influx especially in the last 6 months. Only six months ago, the total market value …

Blockchains And Crypto Tokens – Disconnect In Cryptoland

Coming from blockchain technology and its use cases in various industries as diverse as manufacturing, energy, automotive, healthcare and finance, looking at the cryptocurrency market is quite interesting. Whilst blockchain plays the role of a foundational technology when using it to simplify legacy database infrastructures and adding a lean ‘singleton-ish’ transactional layer to formerly stale …

BLOCKCHAIN 101

Blockchain Basics

In order to better understand the underlying blockchain technology that provides the basis for, and often the origin of – digital cash, you can use the text below as a 101 on blockchain. There is no necessity to grasp every technical detail of a blockchain’s structure or smart contracts, but it surely helps to build knowledge and shape your opinion about the function and the value of a digital token aka crypto currency or digital cash.

Transaction Processing in a Blockchain Network

  1. A transaction is created and signed by an account owner
  2. The signed transaction is submitted to the blockchain network (transaction request)
  3. The validating nodes check if the requested transaction is properly formatted (signed and valid regarding its content) and does not conflict with other transactions. Only correctly formatted transactions are accepted for validation. Transaction may provisionally succeed, then later fail or fail, then later succeed
  4. The validated transaction is added to a block; the block awaits to be added to the blockchain either by consensus or by authority
  5. The block is added to the blockchain
    (If applicable) If conflicting blocks are created for an overlapping set of transactions, a decision has to be made which block to include to the blockchain and which blocks to discard. In the case of a consensus mechanism, this is done identifying the longest chain of blocks with the highest PoW difficulty value and thus without the need for trusting any single participant in the network. This however is only required, if more than one entity holds the blockchain network and no classic arbitration model exists between the entities; examples for consensus mechanisms are Proof-of-Authority, Proof-of-Work, and Proof-of-Stake.

Transaction created and Transaction submitted
Transaction & messages: The term “transaction” refers to the cryptographically signed data package that stores a message to be sent from an externally owned account to another account on the blockchain. It is the one and only way for users to interact with any Ethereum based blockchain system. Messages are similar to transactions but exist within Ethereum based blockchains only – they are “transactions” sent between internal accounts, ie. contracts.

Transaction propagation
Users send transactions to one or more other nodes in the network who further propagate the transaction throughout the network. Through this peer- to-peer communication, transactions are spread fast across the network to all miners and users.

Transaction validated
Validation of transactions: A transaction is verified by checking the validity of its cryptographic signature. Verification of transactions is looked after by the operators of the network, either miners in a permissionless network or the authority nodes in a permissioned blockchain.

Censoring transactions: Operators of the consensus network decide to include or discard incoming transactions (even valid ones) at their own volition. In a public network, transactions come with a transaction fee that users can adjust and thus incentivise miners to include a valid transaction into the next block. Thus, the censoring of transactions in the public network with currently more than 5000 nodes is very unlikely. However, in a permissioned network where the number of operators is limited and pre-agreed, users of the network have less confidence and need to trust operators to include transactions into the next block.

Transaction added to a block and Block added to the blockchain

Blockchain: This is a transactional database that is maintained by the consensus network. It contains a complete history of every transactional change and every transaction sent to it. It is also where smart contracts are stored.

Block: A block is a discrete update to the blockchain. It contains a list of new transactional changes which is added to the complete history. All peers in the network add the same blocks to their chains to maintain consensus on the blockchains state.

Consensus Network: This is a peer to peer network of computers which maintain a blockchain database. These peers come into consensus in discrete intervals on the current state of the blockchain.

Consensus Mechanism: This is the methodology which allows the network to maintain consensus on the current state of the blockchain database. It revolves around a simple rule: one individual must be chosen to author the next block which everyone else must add to their database. It is the method of choosing the individual to create the next block that the various consensus mechanisms are interested in.

Permissionless Network: This is a consensus network which anyone can join and become a ‘peer’, downloading the full blockchain and receiving and sending transactions and blocks to other peers.

For more details and an evaluation of permissionless blockchains, please read Peter van Valkenburgh’s article.

Permissioned Network: This is a consensus network where approval is needed from some authority to become a peer and download a full copy of the blockchain.

Consortium Network: A consortium network (also called ‘Federated Network’) is one where multiple parties take part but the network is not public. An example might be a network maintained by a consortium of banks where each bank maintains a group of peers and is able to create new blocks – information is shared between them. Typically it will not have a cryptocurrency and therefore will use Proof of Authority, or it will have a token and use a POA/POS hybrid model.

If you are interested in blockchain technology feel free to read through our curated Blockchain Basics Magazine.