In numerous popular videos and texts explaining how cryptocurrencies work, this explanation is usually given using the example of Bitcoin, the first of the cryptocurrencies. Bitcoin is actually a clean and understandable implementation of the principles necessary for a cryptocurrency: open history of transactions, the ability to check the source of money along the chain, clear rules for the appearance of money, clear rules for creating new transactions. New coins appear only as a result of mining new blocks, and the mining reward gradually decreases according to the logarithmic law, as a result of which the total amount of issued bitcoins will never exceed the limit (21 million). Any waste of money (transaction input) must match the output of another transaction, money cannot come from anywhere. To spend, you need to sign the transaction with a private key. A simple scripting language allows you to do multisig and all sorts of other useful things, including creating new currencies (tokens) based on the bitcoin blockchain (omni layer, that's how USDT lives). There is no central node, the new block is determined by the consensus of all nodes - if there are several options, they accept the branch in which the maximum number of calculations was done, this is a formal criterion that does not allow for discrepancies. Any user can run its own node, the source code is open.
Why the economic feasibility may lead to the collapse Bitcoin
The author of the article is Alexey Malanov, an expert of Kaspersky Lab's anti-virus technology development department
We will discuss what determines the profitability of mining bitkoy, what principles for adapting the speed of mining were laid in it initially, and why these principles can ultimately lead to the collapse of this crypto currency.
We assume that the reader has an idea of the basic mechanisms of Bitcoin operation, such as: blocking , mining , mining pools, reward for the block.
Warning. In this article, we explore the theoretical possibility of developing the described scenario, taking into account the algorithms put into Bitkoyn. We did not set ourselves the goal to analyze in detail the cost structure of the miners, electricity prices in various parts of the world, bank rates and the payback period of equipment.
Recently, I have read some article where was a discussion about multiple use of cryptographically strong hash for a password. That discussion has pushed me to a math topic. The essence of the problem arises from the idea of multiple (1,000 or more times) password processing before storing by any cryptographically strong algorithm (typically, it is a hash function) in order to get a slow algorithm of verification that effectively resists brute force in case of interception or theft of this value by an intruder . This idea is not new, and it is used by the developers of Cisco, RAR and many others. But, as far as hashing is an operation that compresses many values, there is a logical question - don’t we damage the resistance of system? I will try to answer this question.