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Blockchain for Teens: With Case Studies and Examples of Blockchain Across Various Industries 1st Edition Brian Wu full chapter instant download
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Blockchain
for Teens
With Case Studies and Examples of
Blockchain Across Various Industries
—
Brian Wu
Bridget Wu
Blockchain for Teens
With Case Studies and
Examples of Blockchain Across
Various Industries
Brian Wu
Bridget Wu
Blockchain for Teens: With Case Studies and Examples of Blockchain
Across Various Industries
Brian Wu Bridget Wu
Livingston, NJ, USA Livingston, NJ, USA
iii
Table of Contents
Understanding Cryptocurrency���������������������������������������������������������������������������39
Cryptocurrency Market����������������������������������������������������������������������������������40
What Is Crypto Volatility?�������������������������������������������������������������������������������42
Difference Between Coin and Token��������������������������������������������������������������47
Summary������������������������������������������������������������������������������������������������������������49
iv
Table of Contents
v
Table of Contents
vi
Table of Contents
Audio�����������������������������������������������������������������������������������������������������������238
Digital Real Estate���������������������������������������������������������������������������������������238
Trading Cards����������������������������������������������������������������������������������������������239
Video Game Items����������������������������������������������������������������������������������������240
Fashion��������������������������������������������������������������������������������������������������������241
3D Models����������������������������������������������������������������������������������������������������241
Text��������������������������������������������������������������������������������������������������������������241
Domain Names��������������������������������������������������������������������������������������������242
Examples of NFTs���������������������������������������������������������������������������������������������244
Selling Points of NFTs���������������������������������������������������������������������������������������246
Scarcity�������������������������������������������������������������������������������������������������������246
Authenticity�������������������������������������������������������������������������������������������������246
Easy to Use with Cryptocurrency�����������������������������������������������������������������246
Ownership���������������������������������������������������������������������������������������������������247
Permanence������������������������������������������������������������������������������������������������247
Efficiency�����������������������������������������������������������������������������������������������������247
Royalties������������������������������������������������������������������������������������������������������247
Cheap to Create�������������������������������������������������������������������������������������������248
Creating Your Own NFT�������������������������������������������������������������������������������������248
NFT Market Place����������������������������������������������������������������������������������������������253
OpenSea.io��������������������������������������������������������������������������������������������������255
Rarible���������������������������������������������������������������������������������������������������������256
SuperRare����������������������������������������������������������������������������������������������������257
Foundation���������������������������������������������������������������������������������������������������258
Nifty Gateway����������������������������������������������������������������������������������������������259
Axie Marketplace�����������������������������������������������������������������������������������������260
NBA Top Shot Marketplace��������������������������������������������������������������������������261
vii
Table of Contents
Mintable�������������������������������������������������������������������������������������������������������262
Larva Labs/CryptoPunks������������������������������������������������������������������������������263
The Future of NFT���������������������������������������������������������������������������������������������263
Summary����������������������������������������������������������������������������������������������������������265
viii
Table of Contents
ix
Table of Contents
Decentralized Insurance�����������������������������������������������������������������������������������379
Popular DeFi Insurance Platform�����������������������������������������������������������������381
Summary����������������������������������������������������������������������������������������������������������383
Index�������������������������������������������������������������������������������������������������419
x
About the Authors
Brian Wu holds a master’s degree in computer
science and is an author and senior blockchain
architect. Brian has over 20 years of hands-
on experience across various technologies,
including blockchain, DeFi, big data, cloud, AI,
system, and infrastructure. He has worked on
more than 50 projects in his career.
He has written several books, published
by O’Reilly and Packt, on popular fields within
blockchain, including Learn Ethereum (first
edition), Hands-On Smart Contract Development with Hyperledger Fabric
V2, Hyperledger Cookbook, Blockchain Quick Start Guide, Security Tokens
and Stablecoins Quick Start Guide, Blockchain By Example, and Seven
NoSQL Databases in a Week.
xi
About the Technical Reviewer
Imran Bashir has an MSc in information
security from Royal Holloway, University of
London. He has a background in software
development, solution architecture,
infrastructure management, information
security, and IT service management. His
current focus is on the latest technologies, such
as blockchain, IoT, and quantum computing.
He is a member of the Institute of Electrical
and Electronics Engineers (IEEE) and the
British Computer Society (BCS). He loves to write. His book on blockchain
technology, Mastering Blockchain, is a widely accepted standard text on
the subject. He is also the author of Blockchain Consensus, the first formal
book on the subject introducing classical, blockchain, and quantum
consensus protocols. He has worked in various senior technical roles
for different organizations around the world. Currently, he is living and
working in London, UK.
xiii
Acknowledgments
We thank everyone who made this book possible, including family and
friends who supported us, colleagues who encouraged us, and reviewers
and editors who polished our work.
xv
Introduction
Blockchain for Teens is a beginner-friendly guide for young people looking
to build a basic foundation in blockchain technologies. Similar to the
Internet in the 1990s, blockchain now promises to revolutionize the world
by reforming current business models. In this new era, economies will
become decentralized—a concept where every individual contributes
to and benefits from the network. Blockchain’s wide appeal comes from
its ability to ensure transparent, secure, and tamper-proof transactions
without the need for a central authority. With clear explanations covering
essential topics, including blockchain, cryptocurrency, cryptography,
Dapps, smart contract, NFTs, decentralized finance (DeFi), and the
Metaverse, Blockchain for Teens will help the reader develop various skills
to get them started on their Blockchain journey.
Chapter 1, “Blockchain: A Groundbreaking Technology,” will talk
about the basics of blockchain. First, we will discuss how the current
monetary system works and how blockchain technology impacts
money, business, and the modern world. Then we look into how a
blockchain works by going over each step in the transaction process and
the PoW and PoS consensus algorithms that form the backbone of the
blockchain. We continue with the evolution of monetary systems, from
barter to cryptocurrency. At the end of this chapter, we briefly introduce
cryptocurrency and some basic concepts of the crypto market.
Chapter 2, “Cryptography: The Backbone of Blockchain Security,” gives
a more thorough understanding of cryptography. This chapter will help
enrich your knowledge of symmetric key cryptography and asymmetric
key cryptography. You will also learn how digital signatures work.
xvii
Introduction
The chapter covers the hash algorithm, and we walk through elliptic curve
cryptography to understand how it works. At the end of this chapter, you
will learn how to generate an Ethereum address.
The main purpose of Chapter 3, “Bitcoin: The Future of Money,” is to
present a basic concept of the Bitcoin network. The chapter starts with a
discussion on the history of Bitcoin. Then we learn about the Bitcoin wallet
and Bitcoin network. Next, we also cover Bitcoin transactions to familiarize
you with the key concepts behind the Bitcoin blockchain. Lastly, we briefly
introduce Lighting Network.
Ethereum, the second-largest cryptocurrency after Bitcoin, is
considered a distributed Turing machine machine–you’ll learn more
about what this means in the book. In Chapter 4, “Ethereum: A Gateway
to Cryptocurrency,” you will learn about the history of Ethereum as well
as the key components behind Ethereum. The chapter also goes over
Ethereum nodes and Ethereum clients while providing examples. By
delving into the Ethereum architecture, you will understand how the
Ethereum Virtual Machine (EVM) works, how smart contract Opcode
is executed within the EVM, and the structure of the block, state, and
transactions in EVM.
The best way to understand how the Ethereum smart contract works
is to practice writing a smart contract and Dapps. Chapter 5, “Smart
Contracts and Dapps: From Theory to Practice,” will familiarize you with
smart contracts and Dapps through a hands-on learning experience. You
will write your first smart contract and deploy it to the public Ethereum
network. We also demonstrate the basics of Dapp and web3.js and
how Dapp interacts with smart contracts by connecting with the
Metamask wallet.
NFTs, or nonfungible tokens, represent the future of collectibles and
the expanding digital resource economy. NFTs will change not only art
but also business, finance, and culture as mainstream interest in NFTs
continues to grow. Chapter 6, “NFT: Crypto As Collectibles,” gives you a
xviii
Introduction
general introduction to what NFTs are. Along the way, you will learn the
applications of NFTs, the difference between fungible and nonfungible
items, and the selling points of NFTs. We also provide examples of NFTs
and cover the current NFT marketplace. By the end of this chapter, you will
create your own NFT in the OpenSea market.
Although the Metaverse is still in its early stages, it is rapidly gaining
more attention in recent years. The Metaverse will be a 3D Internet that
is based on new technologies including virtual reality (VR), mixed reality
(MR), augmented reality (AR), blockchain, artificial intelligence (AI),
and the Internet of Things (IoT). Chapter 7, “Metaverse: The World
Reimagined,” will help you understand the basics of the Metaverse. We
will also discuss immersive technology. By exploring the different layers
of the Metaverse, we will learn about different products or services in the
Metaverse landscape, including NFTs and cryptos. By entering a virtual
blockchain world, you will experience the current stage of virtual real
estate in the Metaverse. At the end of this chapter, we provide an overview
of the future of the Metaverse.
Decentralized finance (DeFi) represents an innovative way to reshape
the global financial industry. Chapter 8, “Decentralized Finance (DeFi):
Reinventing Financial Services,” will introduce you to DeFi’s core concepts
and structure, as well as provide an in-depth look at specific products in
DeFi. We will discuss the most popular decentralized stablecoin and deep
dive into the Maker stablecoin to understand how it works. Later, we also
explore the most popular DEX—Uniswap. Finally, we provide a complete
walkthrough on how to deploy your own ERC-20 token in the public
blockchain, create a liquidity pool, add liquidity, swap your custom token,
and get a staking reward in the Uniswap platform. In the decentralized
lending and borrowing platform, we demonstrate how to lend, withdraw,
swap, borrow, and repay crypto assets in the Aave platform. We also
discuss decentralized insurance.
xix
Introduction
xx
CHAPTER 1
Blockchain:
A Groundbreaking
Technology
In recent years, there has been a rising number of Americans who own
cryptocurrency. Even among those who don’t, most Americans have heard
of cryptocurrencies—does “Bitcoin” sound familiar? If you have heard
about blockchain, but you are unsure of how it works, then do not worry;
you are not alone! Although blockchain may seem like an intimidating
topic at first, we are here to help you become familiar with important
concepts of blockchain.
This chapter will begin with the basics of blockchain. Then, we will
discuss how the blockchain works and gain a solid understanding of
consensus algorithms. Next, we will learn about the evolution of the
monetary system and how blockchain technology impacts money,
business, and the modern world. Finally, at the end of the chapter, we will
provide an overview of cryptocurrency.
In this chapter, we cover the following specific topics on blockchain:
• What is blockchain?
• Consensus algorithms
• Understanding cryptocurrency
What Is Blockchain?
At the heart of all cryptocurrencies, we can find the revolutionary and
decentralized technology known as blockchain. It’s important to be clear
about what we mean by decentralization, as this concept is frequently used
in blockchain. Let’s start by looking at the opposite of decentralization:
centralization is when authority is held by a specific individual,
organization, or location.
Figure 1-1 shows an example of a centralized organization.
2
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end and not the end itself. The test for the pupil is to see if he can
put in his own words the vital meaning of the author. It should not be
his purpose to attempt to improve on the writer’s style. It is true that
some of the world’s greatest literary expressions would lose their
highest significance if put in any other than their original form. This
applies especially to verse form, for here the rhythmic movement is
an inseparable element in the full expression of the idea. Some one
has well said: “Style grows to the thought as the sea-shell to its
occupant.” But at this point the aim is not to teach the pupil the
mechanics of literature. He must be taught to think for himself and
use the knowledge he gains so that it will be valuable in his own life.
Is not the aim in both cases for the pupil to get the idea which the
authors wish to impress upon his mind? In other words, the authors
are not simply writing for art’s sake, as so many would have us
believe. The pupil must get the author’s messages, so that they will
help him in life, to be both independent or free from passion, and
reliable or dependable in whatever he undertakes.
Let us advance to the second step: The classification and
organization of facts mean more than the simple process of orderly
arrangement. This has to do with translating what the author
presents to the pupil in terms of his past experience. This is the
process of judging values. Before we pigeon-hole new information,
we pass judgment upon its relative importance. The pupil has
experienced the value of punctuality, courage, optimism, etc. Now,
when any new truth comes under his observation, it is not turned into
knowledge until it has gone through his mental gristmill. What he
hears, or sees, or feels, is not usable until it has been fitted into its
particular niche, and this fitting process is brought about by likening
the unknown to the known.
This brings us to the third step. Frederick Harrison has said:
“Man’s business here is to know for the sake of living, not to live for
the sake of knowing.” There is no better way of expressing the third
step in the development of the student in intelligent reading. After he
has learned to grasp the author’s thought readily, and then so reacts
upon it that it becomes a part of his very being, his next step is to
find an open market for the sale of his knowledge. This does not
mean to sell for money in the narrow sense, but to put his
understanding into actual daily life.
CHAPTER III
INVENTORY OF SPEECH EFFICIENCY
The Knowing
1. Do I realize that I use my voice almost constantly?
2. Do I realize that success in business or society depends largely
upon the convincing power of speech?
3. Do I realize how much of my speech is of no avail?
4. Do I realize the vital importance of inflection and the influence it
has upon those who hear me?
5. Do I realize the great delight that comes through the mastery of
correct vocal usage?
6. Do I realize that it is unnecessary to have a tired throat at the end
of the day?
7. Do I realize that in a very large degree a pleasing personality
depends upon a pleasing voice?
8. Do I realize that by attaining convincing power of speech I am
promoting my efficiency?
The Doing
1. Do I talk more than is necessary?
2. Do I pitch my voice too high?
3. Do I speak with a tense, set jaw and use a hard, metallic tone?
4. Do I talk in my throat instead of in my mouth?
5. Do I continually talk on the same key?
6. Do I talk too fast, or too slow, or too loud, or too low?
7. Do I use my voice as a medium by which I give vent to anger or
displeasure?
8. Do I speak quietly and softly, and thus indicate culture and
refinement?
9. Do I speak loudly in order to be persuasive?
10. Do I attract undue attention to my speech?
11. Do I enunciate with clearness and precision?
12. Do I harmonize tone with mood?
More items could be placed under these two headings, but the
above are sufficient to bring the student face to face with his speech
difficulties. We must know wherein we lack speech efficiency before
we can remedy the lack. The following chapters present adequate
exercises for needed improvement.
CHAPTER IV
ORAL READING
What Is Expression?
What is expression? We are told that all life is expression: The
sudden summer shower, the leap of the wild cataract, the springing
forth of early flowers, and the slow motion of the glacier all represent
Nature expressing herself. The musician over the keyboard, the
painter at his easel, the writer at his desk, represent art expressing
herself. This is all true. But what about mankind as a whole, what
about the vast majority of people who are not endowed with genius?
Have they no universal and common mode of expression?
—Lowell.
Just before Napoleon set out for the court of Belgium, he sent to
the cleverest artisan of his class in Paris, and demanded of him
whether he would engage to make a coat of mail, to be worn under
the ordinary dress, which should be absolutely bullet-proof; and that
if so, he might name his own price for such a work. The man
engaged to make the desired object, if allowed proper time, and he
named eighteen thousand francs as the price of it. The bargain was
concluded, and in due time the work was produced, and its maker
honored with a second audience of the emperor. “Now,” said his
imperial majesty, “put it on.” The man did so. “As I am to stake my
life on its efficacy, you will, I suppose, have no objections to do the
same.” And he took a brace of pistols, and prepared to discharge
one of them at the breast of the astonished artisan. There was no
retreating, however, and half-dead with fear, he stood the fire, and, to
the infinite credit of his work, with perfect impunity. But the emperor
was not content with one trial; he fired the second pistol at the back
of the trembling artisan, and afterwards discharged a fowling-piece
at another part of him, with similar effect. “Well,” said the emperor,
“you have produced a capital work, undoubtedly—what is the price
of it?” “Eighteen thousand francs were named as the agreed sum.”
“There is an order for them,” said the emperor, “and here is another,
for an equal sum, for the fright that I gave you.”
When a deed is done for Freedom, through the broad earth’s aching
breast
Runs a thrill of joy prophetic, trembling on from east to west,
And the slave, where’er he cowers, feels the soul within him climb
To the awful verge of manhood, as the energy sublime
Of a century bursts full-blossomed on the thorny stem of Time.
Through the walls of hut and palace shoots the instantaneous throe,
When the travail of the Ages wrings earth’s systems to and fro;
At the birth of each new Era, with a recognizing start,
Nation wildly looks at nation, standing with mute lips apart,
And glad Truth’s yet mightier man-child leaps beneath the Future’s
heart.
So the Evil’s triumph sendeth, with a terror and a chill,
Under continent to continent, the sense of coming ill,
And the slave, where’er he cowers, feels his sympathies with God
In hot tear-drops ebbing earthward, to be drunk up by the sod,
Till a corpse crawls round unburied, delving in the nobler clod.