An Overview of Bitcoin, Blockchains & Cryptocurrencies In The UAE By A Rookie

Please find below an objective compilation of my perusals through several laborious articles and books - the idea is to promote discussion on technology that has the potential be the 'dot-com boom' (and bubble) of our era. If you find any glaring mistakes in the text below, do drop me a message and I shall happily rectify it. I am a very nascent pupil of this field, with limited academic qualifications and through this blog post wish to encourage more people to get into the discussion of (and not necessarily investment in) blockchains and cryptocurrencies.

If I can understand bits of it, you definitely can get way, way more.

What this is:

- Your one-stop reference pool for diving into the basics, and not the technical details of cryptocurrencies. A lot of technical information has been omitted and ignored for the readability of this nerd-fest, so treat this as the Harry Potter movies in comparison to the novels.

What this not:

- A guide to cryptocurrency investment, because if you really sit and think about it why on earth would you take investment advice from a blatant rookie? (actually if you think even further, you'll find that you should definitely not be taking advice from purported industry experts as well, so I guess that makes my opinion just as valuable as a notorious economist's)

(not that valuable)

What is Blockchain?

A blockchain is a 'chain of blocks' - a series of digital blocks linked to each other to serve as a digital ledger of data. Each block contains within it data relevant to its application - in the case of Bitcoin each block contains transaction history. Additionally, each block contains data linking it to the previous block - consequently creating a chain. It is possible to trace the entire history of one element through its blockchain.

Blockchains are hosted and replicated across millions of systems, thereby decentralising the model and eliminating the possibility of any one person altering the records by hacking into one system.

Source: 'Blockchain Introduction', JWorks Tech Blog (accessible here)

In a future largely controlled by data (with Mukesh Ambani postulating that it is the new oil) the possibilities of blockchains are endless - decentralised network of data that can be applied to medical history, stock management or event history to name a few apart from digital transactions.

Further Reading

'What is Blockchain technology?', Blockgeeks

'What is Blockchain technology?', CoinDesk

Bitcoin, Ethereum & Cryptocurrencies

Bitcoin is a digital currency. Created by the anonymous Satoshi Nakamoto, bitcoin was created in the wake of the 2008 financial crisis which saw many people lose millions of dollars and served as a modern testament to the fallibilities of banks. Apart from Ripple and Stellar Lumens, most cryptocurrencies were created to combat the vices of banks - which means that if Jamie Dimon of JP Morgan is threatening to fire employees for investing in bitcoin, it is more out of fear of competition than fear of stupidity.

Bitcoins are stored in digital wallets which can be used for transactions. Currently, bitcoins can be obtained by:

• purchasing them on trade exchanges
• as a payment 
• as a reward for mining blocks in the blockchain.

Bitcoin is based on a public blockchain network. Think of blockchain as the operating system or the underlying technology and bitcoin as one possible application (in this case, a decentralized digital currency).

Ethereum is an open-source blockchain network that allows developers to create any application of their choice using blockchain technology. While 'smart contracts' is the most popular feature yet, the possibilities of expanding this platform are endless.

Smart Contracts

Source: 'What Is Ethereum?', Blockgeeks

Other notable cryptocurrencies: Ripple, Dash, Zcash, Monero, Bitcoin Cash, Litecoin

Further Reading

2008 financial crisis: The Big Short by Michael Lewis (or you can watch the movie, which might be a slightly more enticing option since it stars Ryan Gosling and Margot Robbie, inevitably endearing to your tastes no matter which way you flow)

Ethereum: 'What Is Ethereum?', Blockgeeks

Cryptocurrency Mining

If you care about how exactly bitcoins come into existence, how the number of coins is regulated, the processes ensuring a bitcoin network is secure and what is required to keep the network stable, safe and fast, this video might serve as a good introductory tool. 

The algorithms and hash code encryption techniques that form the core of the mining process might take this compilation of data beyond the realm of comprehensibility. Additionally, I have admittedly come up short in my technical knowledge and interest in the core algorithms defining each and every cryptocurrency, and I shall leave the onus of further research to the reader.

Advantages of Cryptocurrencies

(Bitcoin has been used in several examples but it should be noted that most advantages are not just linked to bitcoin alone - in fact, cryptocurrencies like Ethereum and Ripple have several additional advantages, and consequently, limitations)

Convenience: Imagine being able to instantly transfer money to relatives in a different country, without having to pay Western Union a fee for the service and a higher fee in currency conversion. Imagine not having to deal with change, withered notes and high credit card transaction charges. Imagine not having to wait on a public holiday for a bank to transfer cash the next day. Think about the convenience online banking and payments added to your life, and now expand that to daily transactions.

Counterfeits: With digital currency you combat the possibility of counterfeits as each bitcoin is in essence, an abstraction of digital addresses. Each address is unique and every bitcoin is linked to the blockchain - which means, there is no way to create a counterfeit of a bitcoin.

Identity Theft: The current model of credit card transfers works on a 'pull' mechanism. When you enter your pin at a card machine, you give access to your entire savings to this particular merchant to 'pull' a specific amount. This is analogous to offering your wallet to the merchant and asking them to take exactly the amount you owe them.

This linear bond of trust is susceptible to calamity if your card details fall in the hands of a crook - a crook with access to your entire earnings and the ability pull any amount he or she wishes to. The linearity of this bond of trust is further complicated if you consider that your card details are not just shared with the merchant, as in this process they are also shared with their IT network supplier, the acquiring bank, the issuing bank, any third-party processor, the card network and each employee who works for these entities and handles these transactions.

Suddenly, the argument that cryptocurrencies aren't as safe as current options starts to look ugly, does it not?

Source: 'Are 'Pull' Credit Card Transactions Making You Truly Vulnerable?', CryptoCoin News (accessible here) 

Bitcoin on the other hand uses a 'push' mechanism - it pushes an amount of your choosing to the merchant. In comparison to the prevalent pull mechanisms, the potential risks are significantly lowered, though not completely eliminated.

Decentralization & Inflation:

"Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman." - Ronald Reagan

"Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair." - Sam Ewing 

Say, for example, USA owes China a sum of $1 million dollars (all hypothetical, of course). The logistics of current fiat currency transactions ignore the significance of inflation - on paper USA owes China a million dollars regardless of the current value of the dollar.

Since the government controls the currency, they decide that in order to clear this debt they will print more dollar notes than necessary. While the government has literally conjured a million dollars out of thin air and paid off their debt, they have significantly altered the existent supply-demand value. The current value of the dollar is affected by the influx in supply - tipping the scales towards more supply and less demand. As a result, the value of the dollar starts to drop. Your $10 bill now gets you one burger instead of two - for the same bill.

We often underestimate the dangers of inflation - in this exact same scenario there is your average worker who had just accumulated a lifetime of savings worth $200,000. In a month, he watches his savings get diminished by half - as it now costs double to buy the exact same things he could have bought with the original value. Would you want to give an external authority that much power over your hard-earned money?

Bitcoin takes power away from a single, central authority and splits it over a million users that create, sustain and expand the network - which means that no one person can decide the value of your money overnight. The performance of currencies backed by governments is often parallel with the performance of the government itself. Are you willing to bet your money on your government, especially if you did not vote for the ruling party and have explicitly expressed zero faith in their ideologies?

An even more chilling question might be: do you have any other choice?

Source: 'Inflation The Evillest Theft', The Final Wake Up Call (accessible here)

Further Reading

Identity Theft: Are 'Pull' Credit Card Transactions Making You Truly Vulnerable?', CryptoCoin News

Inflation: Naked Economics by Charles Wheelan

Disadvantages Of Cryptocurrencies

Double-spend: Initially, due to the small size of the growing network it was possible for a user to gain control of the majority of the hash power - which in turn would allow him to spend the same bitcoin for two transactions. This kind of a scam is known as a double-spend, which gets more and more unlikely as the size of the bitcoin network grows.

Acceptance: We are still months, rather years, away from the day when cryptocurrencies would start getting accepted at your local grocery store. (never forget that one of the first bitcoin transactions was a pizza for 10,000 BTC ~ which would equal $43,000,000 today) The high volatility aspect further results in lack of trust in the currency, but this is expected to stabilise with time.

For a list of top companies that accept bitcoin as payment, click here. Currently, there are over 500 retailers in the UK itself that accept bitcoin as payment, which can be found here.

Deflation & Volatility: Since we will only have a fixed number of coins (21 million for bitcoin), it is possible and already the case that a bunch of investors might hoard up all the coins in hopes of selling when the time is right. The shortage of bitcoin would drive up the price, which would in turn align with the speculative investors' ambitions. This is a serious disadvantage of not having a regulatory body in charge.

The consequences can even be felt in the short term, where the small size of the market comes into play as well. Any multi-millionaire or investment fund can decide to drive the price of a coin up or down by indulging in mass selling or buying of coins. The 'pump and dump' scheme ensures that as an individual investor your coins are in the hands of manipulative traders (and ignorant speculators who simply follow the market blindly, thereby accentuating each swing)

Hacking, Scams & Lost Wallets: If you lose access to your digital wallet you lose your bitcoins. This has been rectified lately with wallets with multiple keys. Since bitcoins are digital, if your network crashes you lose access to your money.

There have been very popular cases of hackers changing the address of the wallet on popular crowdfunding websites - consequently directing all the donations into their personal digital wallets rather than the person or organisation raising the money.

Fuelled by the meteoric rise of bitcoin, there are thousands of cryptocurrencies out there in the market. Amongst them you will also find Dogecoin, which was created as a joke based on the famous dog meme. Despite the blatant mockery, Dogecoin saw bullish trends of around 1500% this year.

Most coins however, are scams, relying on speculators to purchase the sham coin in hopes of it rising 1000% and higher like other popular digital coins. China is the most recent example of governments getting aware of fraudulent ICOs and trying to clean up the mess that follows any promising venture.

Further reading

Pump And Dump: Wikipedia or The Wolf Of Wall Street (also starring Margot Robbie, so I would definitely recommend)

Cryptocurrencies In The UAE & Investment

Currently, one of the safest ways to obtain bitcoins in the UAE would be through BitOasis, a Middle-East centric trading exchange. With a beta trading exchange that allows you to trade bitcoins and ether, along with a digital wallet for storage of currency it can serve as a good starting point for anyone in UAE looking to join the fun. 

Additionally, you could also explore trading the bitcoins from your local wallet into a US-based trading exchange if you wish to deal with even more cryptocurrencies like Ripple. 

Recently, a local coin called OneGram was announced, back by a physical asset - gold. Being touted as the only Sharia-compliant cryptocurrency in a region where this market is still bubbling, it may seem as an easy entry into the world of crypto investment. 

Having read a bit about it and attended a seminar hosted by the founder and CEO, my personal take is that it is definitely not a currency I would be investing in ever, for multiple reasons. However, as with all investment advice, your best bet is form your own understanding based on your own research. Don't let my biased, ill-informed opinion influence your choices!

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In The Alleys And Valleys Of East India

To describe India, to attempt to describe India, to attempt to describe a region of India would in itself be a self-imposed imminent felony. Irrespective of your prowess in expression (of which I remain woefully amateur) the magic is such that words can try but would inevitably fall ridiculously short of expressing the essence of India.

I will still try as it would be another felony to leave these stories untold. You must understand the monsters I battle as I type this - the constant conflict of contrarian desires where I have to tell you about India, and yet cannot willingly destroy its sanctity by attempting to put it in words. You must understand the sacrifice I make in attempting to pen these thoughts, for it eternally puts me in that club of dreamers who could never truly describe India and once you understand that, I welcome you to construct a statue in my memory for posterity to remember my bravery.

I cannot tell you the best way to travel India because (highly pretentious while that may be) it just doesn't exist. India accepts, invites and warrants spontaneity; abhors formulaic wanderings. But we're not here to debate styles of wanderlust; each has their own and none of them are good enough for India.

I want you to look at this piece not as a travel guide (because really, I would not be so obliviously foolish to assume I have even touched the surface) but rather as a young man's outpour of thoughts. I look at you and invite you to take my proffered hand. Take my hand, and come drown with me in this ocean of colours, cultures, languages, history and emotions. See India as I see it and forever become one with the Quest.

Take my hand, and let us drown in the immense beauty of it all.

Before we begin this journey, you and I, writer and reader, before we transiently embark together on the Quest for a few moments, you need my context to see my India. An inherently Indian man with a lineage from the city of Taj, I have spent my entire waking life outside India. I view this country in short bursts, and it helps me to appreciate the abnormalities and not dwell on the shortcomings. The cracked roads and cacophonous traffic are art and music, and not imprecations I would fling to authorities. India is far from perfect, but to a traveller with no foreseen future in this country, the imperfection is the biggest appeal.

As an intrinsic stickler for the underdogs, I found in East India an untold chapter of the Indian story. Incredibly distinctive by South East Asian influences, it seemed to be a world of its own. Of course, when it comes to India every state with its language, culture and history was once upon a time (and still is) a complete world of its own. This family of seven sisters, however, was cut off from the ruckus, and it seemed to have carved valleys of serenity out of its state of national neglect.

It takes a while to get used, I assure you. A shopkeeper grins toothily, flashing blood-red paan-stained teeth while asking for 'pachaas rupaiya'. A boy walks in and asks for a 'phijut spinner', and receives dumbfounded stares.

Surprise is one element of this ride, as we move on to Meghalaya, where the official language is English in a country that is predominantly illiterate. A state that celebrates matrilineality in a nation of female prejudice. Where children under 14 are strictly prohibited from labour. Meghalaya, which translates to 'the abode of clouds', a state that shelters Mawlynnong, one of the cleanest villages in Asia in a country where educated city-dwellers need celebrities to inspire them to keep their streets clean.

The absurdly varied culture of it all.

I shall drag you up and down the sloping roads of Shillong, very San Francisco-esque in layout, very unheard in coverage, to the teeming Police Bazaar where decked out Mahindra Boleros zoom around with young men blasting Eminem. The Khasi tribe with their pimped out Maruti Suzukis and Bajaj Pulsars that adorn the winding roads. Taxi drivers that paste football club decals on their windshields to flaunt their loyalties.

"Yahan ke log apni gaadi ka bada khyaal rakhte hai." (The people here look after their cars really well)

Do you see it?

We trail through villages in the abode of clouds, honking dogs, cows and children out of the way. The little girl skips across the road mischievously and waves at us ecstatically, delighted at the sight of non-native humans. A little boy holds an umbrella for his younger brother as they hold each other and traipse to school. Wizened men sit on rocks watching the cars whiz past, collecting thoughts and memories that would probably die with them.

The profound depth of it all.

They say East India is the Scotland of the East. Having been to both, I wouldn't bring it upon myself to compare either in terms of beauty and history as they have their own individual charms. The Scotland of the East, however, was definitely lighter on the wallet and much harder to scale. I was able to scour the entire actual Scottish Highlands in less than a week, but could hardly journey through more than three of the seven sisters, which happen to be some of the smallest states in India. The might of India, in full display even in its region of seclusion.

Where seclusion lies, there must lie pain also. The pain is an inevitable part of every trip through India. You can only run from it for a while - you can look at the red traffic lights, imploring them to turn green so you can move on and not have to think about the broken families sleeping right under it. Families that live by a timer, a window of sixty seconds when cars stop to obey traffic rules. Their sixty seconds of glory misery, as sticks laden with colourful balloons, toys, trinkets, food and newspapers bob between cars, trying to make a sale as the timer ticks down. Surely this swarm of peddlers would delay the traffic, I wonder, as the cars on the other side of the junction sputter to a stop.

The signal turns green, and there are no peddlers in site. The whimsical circus that lasted a minute.

You can run from it, ignore the beseeching wails and cries as you walk on the streets until you are stopped in your tracks by a child with a bowl, standing right in front and staring right at you.

What do you do then?

There will come a point when you will have to, be forced to, look at their eyes. In that moment, you will understand the consequences of the Quest.

While we stand here, hand in hand, in the middle of the road in Guwahati and watch children with reproachful eyes, eyes that tell stories of dirt, death, poverty and neglect, outstretched hands and missing limbs circle us, I ask you to not ignore this. Don't fight these thoughts, don't suppress these emotions. Feel the pain they feel, fear the horrors they fear and dream the fantasies they dream.

I am he as you are he as you are me and we are all together. 

In East India destitutes were replaced by entrepreneurial destitutes - where they don't beg openly but try to survive the day by selling water or crisps to tourists. Huts upon huts, in villages upon villages, lined with Lays and Kurkure packets and tourist hats. Hordes of people trying to scrape their way through life and fighting for means to survive in order to ultimately die a painful, neglected and dissatisfied death.

The unrelenting, inescapable sadness of it all.

I must now gaze into your eyes, and ask you to let go of my hand. This is, after all, my party. Your experience and understanding of India will ultimately be your own. Your inferences of art in the muck and patterns in the aberrations have to be your own. The Quest is your own.

In retrospect, I have expelled thousands of words and yet I feel a certain dissatisfaction with the result. The magic seems elusive, probably fettered by the constraints of prose. I shall then attempt to infuse a bit of poetry; utter the poetic incantation that would summon the aura that seems unattainable.

Of the lands of India, I say this

A hundred thousand words would still not do it justice.

That I guess, is as much an appropriate description as it is a flawed one for the ethereal, mystical lands of India.

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If you liked what you read, then do help me by sharing this on social media platforms on your choosing. We're all artists somewhere, in some field, and this is just my form of art that would truly find expression if more people get the inclination to read it. 

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Adding Some Sadness To The Life Of Shyam Prasad

Right now, as he walked off into the sunset (or so to speak) from his latest job, he could conclude that his current circumstance could be equated to that of a hapless, thrashing fish out of water. This fascinating analogy, irrefutably and rather unfortunately, hit a small snag on further reflection: a fish out of water had a purpose - to get back in.

He, however, had none.

Ergo, it would be more fitting to equate himself to a dog chasing cars because much like Heath Ledger in The Dark Knight, he wouldn't know what to do if he caught one.

That would be it - a canine analogy for the ages. A dog frantically running pell-mell on the street, chasing car after car, each flashier than the one before it.

***

Every story needs context to make you, the reader, understand. To make you feel. To vicariously live out the precedent six months of our protagonist's life in the following words, so you can for a few minutes, until you finish perusing this piece, be our protagonist as he traipses off into the sunset, freshly unburdened from fetters of corporate bureaucracy yet sagging under an unshakable, irremovable load of guilt.

Six months back he was where most young university graduates find themselves - in the undesirable dome of unemployment. Some people find monotony in work, but he found it in his endless application-rejection cycle. The grindstones of hope, earnestness and desperation would whir into life, raucously churning out one job application after another, but to no avail. The din of these grindstones would grow louder with each day, with the grindstone of increasing desperation easily overpowering the faltering grindstone of diminishing hope.

It took multiple sparks, some sputtering and some spitting, to ignite a candle in the dark gloom of the dome of unemployment. The grindstones were silenced and after what seemed like ages, there was peace. The clawing nails had been snipped; the crying, wailing voices were muted. There was purpose. This brings us to a couple of months back as he walked into his new job, finally at peace, where on the threshold of his first task he met Shyam Prasad.

Innocuous, unassuming Shyam Prasad.

Shyam Prasad was as normal as normal could be. While our protagonist walked in with an aura of confidence, a penchant for time management and a desire to shine like a diamond, Shyam Prasad did none of those. Having done his undergraduate from a town in Tamil Nadu, he was unaware of the politics of corporate hierarchy. He should've established himself from day one. He just didn't know how.

Bumbling, inquisitive Shyam Prasad.

Our protagonist helped him in all his tasks, 'guided' him just so he could complete his work on time. Inspired by just good camaraderie, so that fearful, cautious Shyam Prasad could escape the wrath of the head honchos. A little bit of camaraderie to help reduce the woes of Shyam Prasad.

Yet, it seemed on the matter of woes that Shyam Prasad had none, for he seemed to hide every emotion under the widest of smiles. He quickly struck up a bond with all the Tamilians, sharing their food during the lunch break. If one were to simply stare at Shyam Prasad, uninhibited by prejudice, context or perspective, the joyful face of Shyam while he wolfed down balls of rice, content to just listen to the stories of his peers, would paint a serene portrait of satisfaction.

Seemingly satisfied Shyam Prasad.

However, despite managing to carve a niche for himself amidst this throng of employees desperate to shine, our protagonist grew increasingly unsatisfied. As a millennial educated at a globally renowned university and handed opportunities without ever asking for them, he felt entitled to more. Bound by the shackles of unintentional privileges, he felt entitled to more responsibility, more respect and a heavier paycheck.

This false sense of entitlement instigated our protagonist to quit prematurely a job that thousands were vying to secure. In doing so, he spat in the face of all those who sat up all night acquainting themselves with the exemplary etiquettes of immaculate interviewees. A massive, arrogant spit in the face of those who count their savings each day, just so one day they could give their families the comforts that were ruthlessly denied to them.

On his last day, as he was working with Shyam Prasad, Shyam, unaware that this might be his last day of camaraderie with his new friend who had quickly become his support in this confusing, illegible world of corporate bureaucracy, launched into the story of his life.

Shyam Prasad's father had abandoned him when he was in the first grade. He had grown up watching his uncles waste their lives away, succumbed to the vices of alcohol and cigarettes. His mother had valiantly tried to give him a childhood that would remain irreparably torn apart. He was sharing a room with his cousin in Karama, surviving on a broken, run-down phone until he could save enough money to buy a laptop to Skype home. He ate from the plates of fellow Tamilians at work to save some money. His mother had taught him to be a 'decent man', and having grown up engulfed in the apparent weaknesses of men all his life, he vowed to be everything the men supposed to look after him weren't.

He was here in a foreign land, away from his mother. Away from the only person in his life who never gave up on him, never failed him. He was here desperately trying to make her proud by trying to be a 'decent man'.

Strong, heroic Shyam Prasad.

Shyam Prasad had a purpose because he had no options. While our protagonist here mindlessly chased one fancy car after another, Shyam Prasad stood still, fettered by the unrelenting chains of destiny. While our protagonist was a rebellious challenger of fate - happily waltzing to the strings of temptation, Shyam Prasad was a victim of fate.

These were the thoughts plaguing the mind of our protagonist, as he lumbered off into the sunset. The wailing voices had found intensity once again. He did his best to clear his mind, yet somehow he couldn't shake off the image of a lonely Shyam Prasad ticking off days on a paper calendar, counting down the days until he would have saved up enough money to bring his mother to meet him.

He couldn't shake it off, because he just knew that as he broke the news of his resignation to his colleagues today, the saddest and the only genuinely sad person in the crowd was alone, alienated Shyam Prasad. Our protagonist was, while a privileged millennial to boot, now the latest addition to the list of people who had deserted Shyam Prasad, given up on him and ultimately failed him.

This was the baggage that he now carried back - a load of unshakeable, irremovable guilt.

The unshakable, irremovable guilt of adding some sadness to the life of Shyam Prasad.

Based on a true story.

-

If you liked what you read, then do help me by sharing this on social media platforms on your choosing. We're all artists somewhere, in some field, and this is just my form of art that would truly find expression if more people get the inclination to read it.

You can like this blog's Facebook page here, follow the Twitter feed here or follow me personally on Twitter here.

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