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S01E03 – How Does Cryptocurrency Work? (Part 2) – with Bernard Golden & Arvind Narayanan

Oct 02

In this episode, we dive a bit deeper into how Cryptocurrency TECHNICALLY works – from mining to hash functions to digital signatures.

And to do this I’ve got 2 awesome guests – you’ll hear parts of each conversation today, and then in the next few episodes, you’ll hear the rest of each conversation separately.

Today’s episode is itself a mashup of two conversations – one with Bernard Golden and one with Arvind Narayanan. I had long and interesting conversations with each guest, but as part of each conversation, we also discussed various technological aspects of how cryptocurrency and the blockchain works. Bernard and Arvind are both very knowledgeable about the technical side, but they’re also both very good at explaining complex concepts.

Bernard Golden and the Technology Underlying Blockchain Transactions

Bernard Golden has been named by Wired Magazine as one of the ten most influential people in cloud computing, he regularly keynotes at conferences around the world, and he’s led several Silicon Valley tech companies as CEO or executive for nearly 2 decades. But over the past couple years – he’s turned his attention largely to cryptocurrency and blockchain, which he describes as “the next innovation platform that will transform our society”.

Bernard and I discuss a range of topics:

  • What’s the best way for explaining the technology and importance of bitcoin and blockchain?
  • Mining – How does the blockchain securely record transactions without high risk of hacking or fraud?
  • If I want to send one bitcoin to use, how does that technically happen and get encrypted?

Arvind Narayanan and What’s Most Important to Understand about Signatures, Hash Functions, and Ledgers

We’ve also got Arvind Narayanan on this episode to talk about some of the different technical aspects of cryptocurrency and the Blockchain.

Arvind is an assistant professor at Princeton and an affiliate scholar at Stanford Law School’s Center for Internet and Society. Much of his early work focused on “de-anonymizing” data – which basically means taking otherwise anonymous data – such as anonymized customer viewing data from Netflix – and finding ways to re-identify the data. And by the way, he did this with anonymous Netflix viewing data in 2006.

But more recently, Arvind has become one of the leading academic researchers into various aspects of cryptocurrency and the blockchain.

Arvind is a mathematician and computer scientist, so we focused on these issues:

  • Is it important for more people to better understand the technical side of cryptocurrency?
  • From a framework perspective, what are the main points that someone needs to understand to basically comprehend cryptocurrency?
  • What are the biggest advantages to a global distributed ledger?
  • What’s a good basic explanation of hash functions and hash pointers?
  • How do digital signatures allow people to create valid transactions?
  • In asymmetrical cryptography, how is anyone able to verify a digital signature without a private key?
  • The basics and history of modern cryptography.

In the next couple episodes, we’ll talk separately with Bernard and Arvind about use cases, privacy, security, protection from censorship, and also why Arvind is skeptical about some of the tech and use cases that are being discussed for cryptocurrency.

Featured Guests:

Bernard Golden
Arvind Narayanan

Selected Links:

Bernard Golden
Bernard on Twitter
Bernard’s Article on Innovation
Blockchain and Scalability

Arvind Narayanan
Arvind Wiki
Princeton Coursera Course on Blockchain
New Directions in Cryptography

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About the Author

Jeremy Hendon grew up in Georgia, practiced law for a while, and then built several companies - from food manufacturing to magazines to digital events. Jeremy has also developed apps with 500,000+ downloads, co-authored multiple books, had his products featured on national TV, and has lived in 9 different countries over the last 4 years.