Ethereum & Litecoin – Beginner’s Look at Coinbase Cryptos
Hey everybody, welcome to video number 3 in my series about cryptocurrency. Video 1 was all about what is Bitcoin, video 2 was how to get Bitcoin both using a credit card and anonymously and we took a look at Coinbase and in our experience with Coinbase we noticed the Coinbase wasn’t just all about the Bitcoin. Coinbase had some other assets as well. So, now I want to dive further into the other types of cryptocurrency you’ll see we got Coinbase.
So, popping back over to Coinbase here he can see that Bitcoin isn’t the only asset that they have. They’ve Bitcoin cash which is a fork of Bitcoin, Ethereum and Litecoin. Now Litecoin is very similar to Bitcoin but as you can see the price is much, much, much lower. So, Litecoin is similar to Bitcoin in the fact that it is a Coinbase cryptocurrency based on the Block Chain although they differ in the fact that Litecoin has a decreased block generation time of about 2.5 minutes whereas Bitcoin I think it’s 10 minutes and also there will be a total of 84 million Litecoin mined. The other thing is the hashing algorithm is different. Litecoin uses script versus Bitcoin’s I think SHA256 or something like that. So, they’re similar but different.
So, Ethereum is completely different because essentially, it’s not a coin at all, essentially, it’s Ether. So, a Ethereum is based on the concept of smart contracts. But not contracts in the way we currently understand them. If I understand it correctly what Ethereum hopes to accomplish is to use the Block Chain technology. With these “smart contracts” we’re looking for an incorruptible way of enforcing these contracts.
Ok, so, one-way Ethereum is completely different from Bitcoin is that Ethereum is essentially an open sourced software platform. It’s based on Block Chain technology and it allows developers to build third party software on top of it to deploy decentralized applications.
All right so I’m going to take a slide to explain Ethereum and in a transaction that you’re probably already aware of the normal internet transaction we’ve got a seller and a buyer and then we’ve got some sort of platform a trusted platform which they make monetary exchange. So, in my example here I’m going to e-bay which uses PayPal and in my example, Bob’s going to deposit his money in his Pay Pal account and essentially PayPal is going to take care of the transaction and PayPal is going to send the money to John, so it’s a trusted resource as an intermediary. And due to the natural centralized concept of PayPal you know PayPal could feasibly get hacked.
ok, so, what if we were to replace that completely centralized model with a decentralized model using Block Chain? This block right here would represent a transaction between Bob and John and from previous videos we know that every block is going to have data in it and it’s going to have a specific unique identifier known as the hash and it’s also going to contain the hash of the previous block. So, if somebody wanted to hack the Block Chain like right here it would actually disrupt the hashes of every single block after it and because the Block Chain represents an open ledger that many, many, many people are keeping an eye on it can be quickly disputed by all the peers in the network. So, by Ethereum and smart contracts in a Block Chain model we’ve not only taken out the middleman but we’ve also made it more secure.
In this example here, this last block represents the smart contract between the two parties and this smart contract is coded with a set of rules in which the contract will not execute until some predefined criteria is met. In our example here, the buyer pays.
So, I think we’ll wrap it up for now. I’m going to be talking about yet another asset in the next video one that is also nebulous and hard to understand and that’s Ripple. And one of the allures of Ripple right now, as of right now it happens to be cryptocurrency number 4 in terms of its popularity. Again, it’s completely different from the rest but similar and the other thing is that it’s trading under two dollars right now.
Well I’m Stepve, I’m going to go ahead and sign off for this video. Hope you enjoyed it, hope you learned something and please don’t forget to subscribe, comment, like and I’ll see you in the next video. See you.