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23May

What is Bitcoin Mining?

May 23, 2021 Wael El Ghazzawi Education 31

We aim to explain bitcoin mining to a non technical person

It’s a good idea to explain the blockchain technology first. then, continue with the mining process.

1. You have one single block (a block is like a page of an account book). This is where people can send money to each other and those transactions will be recorded for ever and ever on that page in a way that is unchangeable.

2. These pages are linked together in a chain of pages (like links of a necklace). That is the blockchain.

3. Miners are like people who check if all transactions do make sense and they record those transactions on these blocks for ever and ever. So no one can go back and change them by making new blocks.

4. The miners are rewarded for this job with a little bit of money after solving a difficult math problem. That is why we call it mining: like gold miners who find gold or oil miners who find oil, bitcoin miners find bitcoins (or fractions of them called Satoshis).

5. But they can only mine bitcoins on a very specific schedule: every 10 minutes 12.5 new blocks will be mined (or created) and with that number of pages added to the blockchain. There is no other way of adding new pages or getting more bitcoins on the system, so they are very valuable.

6. If you want to rent one of those miners for mining your own bitcoins you also have to pay them.

7. The miners can choose which transactions they want to add on a page depending of many criteria like: what’s the fee that people paid for making that transaction.

8. This is why it’s so slow and expensive to send Bitcoin (BTC) from one wallet to another. You will have to pay a fee to the miners for them adding your transaction on one of these pages. They only do it if there is a reward for them: some BTC (or Satoshis).

9. So in the end all transactions are grouped by miners choosing according to this method or that method (depending always on the fee that was paid), and then they are added on those pages in a way that can’t be changed anymore.

10. You can also choose which of these miners you want to include your transaction or no. So it’s very cool because you have some power as well compared with banks where they pick all transactions but you don’t have any power.

11. And also every bitcoin has a history so you can trace them like in an account book, from where they came, to who owns them now, etc.

That’s it! That is the blockchain and mining explained to a non-technical person. easier than i thought?

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02May

Fintech and Banking- What the Future Holds?

May 2, 2021 Wael El Ghazzawi Education 32

Fintech and Banking share something- a common customer segment. Which one is well positioned for the future? Let’s see!The term “fintech” is actually a new word for financial technology. It has been composed from 2 words; financ- which indicates the finance, and techno- which implies innovation. The term was first coined by the venture capitalist group in 2009. This term was made to depict the main element of any company or business that has changed its operating system for better results than before using technology as the main driving force rather than the human capacity. All these opportunities are available on cloud computing and it is rendering many beneficial effects to both small startups and huge corporations present in every segment like retail banking management, personal finance management etc where peoples can gain fast access to their funds and products without visiting physical branches daily because online services have become fast, effective and highly secure.

The impact of fintech and future of banking on the financial industry is going to be huge in the coming years because it’s an expanding market with rapid growth opportunities for businesses, startups, experts, investors etc. Focusing on these areas can lead to diversifying business portfolios while avoiding major risks like the online frauds that have been increasing further by hackers basically using phishing attacks to lure users into clicking malware-laden links or entering account details at spoof sites. In addition, this journey will also provide a new opportunity for all the entrepreneurs because due to its various functions such as providing quality products and services at low prices (affordable price rates), reducing operational costs (reducing staff costs), having faster transactions and withdrawing/depositing funds, reducing paper work by doing away with the manual records etc. These opportunities will lead to a better economy for every individual.

Some of the main benefits of fintech are that it provides fast services, low-cost products and offers round-the-clock services around the world. Therefore, these factors have brought people from all kinds of banks, backgrounds and customs to participate in this technique which has become more popular than ever before so that they can win their customers’ trust back or at least get some attention towards themselves through providing these facilities to them such as linking bank accounts with social media (Facebook), having mobile payment apps (Zelle) , building virtual communities where users can discuss financial topics about loans, debt management, student loans etc. On the other hand, traditional banking services have changed noticeably as well because it has moved from conventional face-to-face branches to mobile and web applications due to these new emerging services like online music streaming that uses banks’ APIs to connect with users’ bank accounts in order to create a direct relationship between customers and their financial service providers is one of the main reasons for fintech’s increasing popularity through which consumers get access to banking services directly through third party.

An important thing about this technology is that it has made business easier by providing automated software solutions so that companies can freely monitor all their activities such as payment transactions , funds transfers around different locations easily without any issues. This gave birth to the first fintech application in 2009 known as automated clearing house (ACH) that makes use of banking services to transfer funds from one bank account to another bank account.

Accordingly, this technique has gained more popularity among startups because a majority of these companies focus on providing financial services like insurance, online loans and investment management etc with the help of data analytics, machine learning and artificial intelligence software’s so that they can tackle automation issues for their businesses rather than manual processes which were taking too much time. This is why most banks have shown their interests towards acquiring or investing in fintech companies instead of developing new technologies themselves. For example: In 2014, American Express acquired 37% stake on Stripe for $200 million in order to utilize its payment processing services around the world.

One of the biggest advantages of this business strategy is that it has a huge customer base that is increasing rapidly so companies can easily target more customers for their products and services which consequently leads to increase revenues as well. For example: In 2016, PayPal had about 184 million active customers in addition to 17 million merchants while Zelle had 56 million users after only 5 months in its operation (since 2017). That means there are lots of opportunities for companies dealing with financial transactions (e.g loans) by targeting these customers on daily basis or they can even form virtual communities within themselves where investors can invest money through these platforms without any risk because this path will lead them towards new and capacities that allow them to handle these matters on their own.

On the other hand, banks have started using these technologies to improve their business strategies and capabilities as well which resulted in increasing demand for fintech companies such as Ripple that has created a software solution for cross border payments between different banks all across the world . The main benefits of this tool include fast transactions with low fees because it takes only about 3 seconds for each transaction while traditional systems need sometimes more than 10 minutes until they verify one single payment. Moreover, its blockchain technology is beneficial for banks that aim at integrating it into their daily processes because it provides them a secure way of making transactions , especially important ones, throughout the world without having to worry about frauds theft or charge-backs since every transaction is recorded and can not be altered afterwards.

In conclusion, high demand for fintech companies and their products along with banks’ increasing interest towards them can be considered as one of the main reasons for achieving a rapid growth in this industry which is expected to keep growing over time . Thus, I believe that it is necessary to continue doing researches on these companies and technologies in order to introduce new ways for improving financial transactions all around the world.

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02Apr

Blockchain and Smart Contracts

April 2, 2021 Wael El Ghazzawi Education 33

Blockchain is a tamper-proof distributed database that enables permanent, transparent and secure storage of all kinds of transactions. It records data across a network in real time, without central ownership or control. Blockchain allows information to be shared amongst a community and creates an immutable record that cannot be changed. Information held on blockchain exists as shared and replicated ledger, visible to anyone with access privileges who also can verify the authenticity of the information. Once entered into the database it cannot be altered or removed.

What are smart contracts?

A smart contract is used to exchange money, property, shares, or anything else of value in a transparent way without involving a middleman — legal standard conditions are embedded within the contract itself rather than being provided by a third party. Due to the nature of Blockchain, smart contracts actually run on a computer that is distributed across the Internet thus removing any single point of failure.

The “Contract” can be coded to handle unlimited numbers of users, automatically executes transactions and provides an audit trail. These smart contracts are stored and replicated in all nodes participating in the network making them transparent to anyone with access privileges. The technology allows individuals and businesses to use blockchain technology for automatic processing of payments –not just currencies but also stocks or other assets– when certain conditions are met

What is Ethereum?

Ethereum (ETH) is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. In essence Ethereum is a platform that helps to run smart contracts and DApps (Decentralized Applications).

The project started in 2014 with the goal of building upon Bitcoin’s only weakness: its lack of Turing completeness; being unable to run programs developed for other languages. That means there cannot be any complex code on Bitcoin’s main-net blockchain –a restriction which makes many use cases unfeasible.

Smart Contract example on Ethereum:

A simple user story for Smart Contracts could be : Bob wants to sell his car and wishes to receive payment instantly, he could put a “For Sale” sign in the window of his car with a QR code that contains all the information for potential buyers to check (vehicle make, model, year of manufacture etc.) and then automatically receive payments to his bank account when agreed conditions are met. The “Smart Contract” is running on a blockchain network which prevents fraud or any other interruptions to the process from occurring.

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