Bitgold’s IT Operating Technology Infrastructure
BitGold proposes a financial system that combines different elements of mining and cryptography to accomplish decentralization. This includes a timestamped block stored in a title registry and generated through proof of work strings; it aims to provide a secure and transferable function and analyzed it with ease. It comprises seven steps that start with developing a public challenge string using a benchmark function similar to the mathematical algorithm used to generate bitcoin (Moskov, 2018). The proof of work string is generated from this benchmark function and relates it to the transaction stored in a title registry. The system is designed such that the last set of strings is responsible for generating the next set, as the block creation process in bitcoins as hash addresses are used as headers that point to the next block set.
In this case, the title registry is similar to blockchain such that it offers an absolute record and a set of transactions that have occurred (Moskov, 2018). The Bitgold system combines different quantities of bit gold to make a single transaction. Its functions are decentralized and comprise a distributed system of individual nodes that form its network, meaning that it is not a centralized authority controlling levers. The system comprises a decentralized design of unforgeable work chain networks, each unique to the user’s public key through digital signatures and timestamps (Moskov, 2018). This would have been valuable, given that the proofs of work would be difficult to replicate and securely stored and transferred. This is because it would require real-world resources to produce them.
The proof of work system starts with a candidate string, which in most cases, is a random number. Through hashing, the string is mathematically combined with another, resulting in several random strings. The only way the hash can be identified is by creating it since it cannot be predicted or computed. The idea is to ensure that all hashes are not considered valid under the system’s protocol. This means that a valid hash must begin with a predetermined number of zeros. Because hashing is unpredictable by nature, finding a valid hash is only achievable through trial and error (Clements, 2018). The conclusion would be that a valid hash proves that its creator used computing power. Therefore, the valid hash would be the next system candidate string, growing into a chain of proof-of-work hashes, where there would be another candidate string to operate with.
An individual who finds or creates a valid hash would own it, just like owning a gold ore. Establishing this ownership would mean using a digital ownership registry where all hashes would be linked to respective creators’ public keys. Through this registry, an individual can transfer a hash to a new owner. They would do this by signing off on the transaction made through a cryptographic signature (Kim, 2019). The registry would be managed and maintained by a property club that would keep track of each public key and their respective hashes. This would be through a system designed to mimic airplane board computers’ security-critical systems, a system known as a Byzantine Quorum System. If one of the system’s computers should fail, the system would still be fully operational; A major event would need all computer systems failing simultaneously. However, the checks would be voluntary, meaning that it would not require a court of law or state monopoly to be conducted (Moskov, 2018). The system mimics Ethereum Classic, which maintains an original version of the Ethereum ledger and does not retract the DAO smart contract.
With the rise of inflation, modern technology improves over time, making it easier to generate valid hashes. Even though the hashes cannot be used as equivalents to money, their scarcity would steadily reduce yearly, meaning at some point they would be in abundance and dilate its value. To make it easier, it is advisable to timestamp all valid hashes with different timestamps, minimizing trust. The timestamp would disclose the difficulty in generating the hash (Clements, 2018). Older hashes would logically be harder to produce than newer ones. The date would determine the value of these hashes it was found. As such, a 2018 hash would be worth less than a 2008 hash.
One problem created through this system is that it would not equal any other unit, which would be a problem since most traders and business partners would want to accept payment without worrying about the date the money was created. Mitigating this problem would mean creating a banking system that would gather different hashes from different timeframes (Kim, 2019). Based on the value of these hashes, combine them into bundles of standard value. Even if a 2018 bundle had more hashes than a 2008 bundle, both would be of the same value. Therefore, the system is designed to be a standard gold layer that encourages free banking systems in the digital age.
The system has a security shortcoming. The proof-of-work was not connected to the peer-to-peer system to ensure no third-party breach when controlling most of the hashes within its security features. The system would be more effective with a fixed inflation schedule that would not be affected even when the hash powers increase at once (Tandel & Mestry, 2018). This would mean that if the system’s computing power increases, it would be harder to generate new hashes. The system was also unpredictable in terms of demand, a factor that would easily be solved by designing a security-agreeable algorithm that would adjust the difficulty of designing a new hash. There is also a problem with the machine structures’ innovations that could ultimately lead to centralizing the hashes, a problem that is similar to selfish mining. In blockchains, selfish mining involves hiding newly generated chains from the main blockchain, generating a separate string.
The system relies on users who solve cryptographically complex algorithms to generate hashes. The activity’s value would vary since it depends on different factors such as internet connectivity to the difficulty of generating a new hash. The system is designed so that it awards users based on their input, ensuring that the rewards or value of the hashes are dependent on the input of the public blockchain system (Tandel & Mestry, 2018). Selfish mining means that the users generate independent strings and make these blocks available on the system’s public blockchain, increasing their overall output.
Since the new string will be shorter than the public chain, it disrupts the system and hides the newly generated chains. The public chain, however, continues to generate new strings. This leads to a waste of resources, and the selfish miners benefit from a competitive advantage generated through this waste. This would affect the decentralized nature of the system, and the selfish miners would control the system.
Moskov, P. (2018). What Is Bit Gold? The Brainchild of Blockchain Pioneer Nick Szabo. Coincentral. Com, posted, 22.
Tandel, M. P., & Mestry, M. S. (2018). CRYPTOCURRENCY-THE WORLD OF CRYPTOCURRENCIES. Retrieved from https://www.semanticscholar.org/paper/Cryptocurrency-The-World-of-Cryptocurrencies-Tandel-Mestry/f13ae388c76df544dc7f1bcbbd98498814f20dde?p2df
Kim, J. (2019). A Survey of Cryptocurrencies based on blockchain. Journal of The Korea Society of Computer and Information, 24(2), 67-74. Retrieved from https://doi.org/10.9708/jksci.2019.24.02.067
Clements, R. (2018). Assessing the evolution of cryptocurrency: demand factors, latent value, and regulatory developments. Mich. Bus. & Entrepreneurial L. Rev., 8, 73. Retrieved from https://heinonline.org/HOL/LandingPage?handle=hein.journals/mijoeqv8&div=6&id=&page=
Clements, R. (2018). Evaluating the Costs and Benefits of a Smart Contract Blockchain Framework for Credit Default Swaps. Wm. & Mary Bus. L. Rev., 10, 369. Retrieved from https://heinonline.org/HOL/LandingPage?handle=hein.journals/wmaybur10&div=14&id=&page=
Module 4 – Case
MANAGING COMPLEX IT ORGANIZATIONAL CHANGE AND CAPSTONE PAPER
The Impact of Various Internal and External Organizational “Environments” on IT Management
The ability to understand various elements within and outside your topic organization and the extent to which they affect information technology are keenly important to the organization’s management. One facet of this ability is to be able to successfully scan various internal and external “environments” (social, economic, political, and technological, etc.) at numerous organizational levels (as well as the demands of their various publics). This module will focus on gaining a better understanding of the “environmental” conditions facing your chosen Capstone organization and how to assess the elements of required planned change.
This module will be primarily devoted to the careful review of your previous Capstone Case paper segments, assembling them into a cohesive finished product (with one overall case introduction and conclusion) which reflects careful discussion, as well as the comprehensive integration/citation of previous MSITM coursework and other relevant sources.
In this module, you will perform a careful review of your previous Case paper segments, assembling them into a cohesive finished product (with one overall case introduction and conclusion) which reflects careful discussion, as well as the comprehensive integration/citation of previous MSITM coursework and other relevant sources into your IT Governance Project. Also, you will produce a video where you present your project. Then post a link to the YouTube video with a presentation of your IT Governance project.
How to make a YouTube video: https://www.youtube.com/watch?v=Hsuy4cUJe9o