High Level Science Of Cryptocurrency

First, I want to thank Patrick McCorry for making all of this knowledge available to myself and others.

Second, I'd like to assert that I'm writing from a Bitcoin and Ethereum paradigm.

Overview

We'll be looking at cryptocurrencies from the perspective of three different computer science topics. The three topics will be (1) Data Structures and A Cryptographic Audit Trail, (2) Distributed Systems and Global Consensus, and (3) Applications.

(1) Data Structures and A Cryptographic Audit Trail

Q: What if there was a data structure to let someone re-compute an entire database from scratch and then compare it with others to verify its validity?
A: The data structure that makes this possible is the blockchain. The blockchain is a cryptographic audit trail that will allow anyone to re-compute the same database by verifying a sequence of transactions.

Q: How can one be sure they've re-computed the correct database (blockchain) on their local system?
A: The re-computation of "the" blockchain passed to us from a peer on "the" network alone doesn't guarantee that we've actually re-computed the "right" one- the one "everyone else" is using. That's where the idea of a distributed system and global consensus comes into play.

(2) Distributed Systems and Global Consensus

Q: What is a consensus protocol?
A: A set of computers that want to reach an agreement about a data item. You can imagine a set of questions (data) being propagated (bounced around) throughout a set of computers and then filtered through the protocol (rules) until there's a final decision made (true/false) on each question (data item).

Q: What is safety compared to liveness, and why are these terms relevant when it comes to a blockchain's consensus protocol?
A: In a centralized network, the focus is on safety; where as in a decentralized network, it's usually on liveness. Safety is based on "nothing bad should ever happen"; where as liveness is based on "something good happening eventually". No consensus protocol can guarantee both simultaneously. Networks based on safety are usually closed off from the public- requiring 2/3 nodes to be online; where as networks based on liveness are usually open to the public- requiring at least 1 node to be online.

(3) Applications

Ultimately what we get from a blockchain is a public consistent view for all parties; which have lead to applications that enable peer-to-peer electronic cash, smart-contracts, and the array of possibilities that come with smart-contracts such as auctions without auctioneers, voting without tallying authorities, gambling without casinos, and etc..

Conclusion

At a very high level, when it comes to cryptocurrency, we've covered (1) Data Structures and A Cryptographic Audit Trail, (2) Distributed Systems and Global Consensus, and (3) Applications.

If you have any questions or suggestions, then please leave them in the comment section below.