Decoding the Silicon Valley Bank Crash: the Collapse of America Banks Aparna Thakur

 Decoding the Silicon Valley Bank Crash: the Collapse of America Banks Aparna Thakur




The global financial system is built upon the foundation of banks, which serve as intermediaries between savers and borrowers, facilitating economic growth and stability. However, history has shown that banks are not immune to crises. One notable example is the collapse of the Silicon Valley Bank (SVB), a prominent American bank, which sent shockwaves through the financial industry. This case study aims to decode the SVB crash, examining the underlying factors and consequences that led to its collapse.

The Silicon Valley Bank Crash:

The Silicon Valley Bank was once hailed as a symbol of innovation and success, catering primarily to the technology and startup ecosystem. Its demise was a stunning blow to the financial sector, with far-reaching implications. The crash of SVB can be attributed to several key factors:

1.Overexposure to the technology sector: SVB had heavily invested in technology and startup companies, which had been the primary drivers of its growth. However, this overreliance on a single sector made it vulnerable to market fluctuations and downturns. When the technology bubble burst, SVB was left with a significant number of non-performing assets, causing severe financial strain.

2.Risky lending practices: In its pursuit of growth and market share, SVB engaged in risky lending practices, extending loans to high-risk borrowers without adequate risk assessment and collateral. This aggressive lending strategy, coupled with lax regulatory oversight, created a ticking time bomb that eventually exploded when the economy weakened.

3.Lack of diversification: SVB's heavy concentration in the technology sector and its reliance on a limited number of clients left it susceptible to systemic shocks. A more diversified portfolio could have provided a buffer during downturns in specific industries.

4.Weak risk management framework: The crash exposed significant flaws in SVB's risk management framework. There was a lack of proper risk assessment, internal controls, and oversight mechanisms, which allowed the bank to take on excessive risks without adequate safeguards. This failure in risk management further amplified the impact of the crash.

Consequences of the SVB Crash:

The collapse of the Silicon Valley Bank had wide-ranging consequences for the American banking system and the broader economy:

1.Systemic risk and contagion: The crash of SVB sent shockwaves throughout the banking sector, raising concerns about the stability of other banks. The fear of contagion led to a loss of confidence in the banking system, causing a credit freeze and hampering economic activity.

2.Financial market turmoil: The crash of SVB had a significant impact on financial markets, triggering a sharp decline in stock prices, particularly for technology-related companies. Investors faced substantial losses, and market volatility increased as uncertainty and panic spread.

3.Economic recession: The collapse of SVB was a contributing factor to a broader economic recession. The bank's exposure to the technology sector, coupled with its lending practices, resulted in a contraction of credit, reduced business investments, and layoffs, leading to a decline in overall economic growth.

4.Regulatory reforms: The SVB crash exposed regulatory weaknesses and loopholes that allowed excessive risk-taking and inadequate oversight. As a response, regulators implemented stricter regulations and enhanced oversight to prevent a recurrence of similar crises in the future.

The Silicon Valley Bank crash serves as a stark reminder of the vulnerabilities inherent in the banking system and the risks associated with excessive concentration and lax risk management practices. The collapse of SVB had severe repercussions on the American banking sector and the broader economy, highlighting the importance of robust risk management, diversification, and regulatory oversight. It also underscores the need for a balanced approach to lending and sustainable growth, rather than chasing short-term gains. By learning from the mistakes made in the SVB crash, the financial industry can strive to build a more resilient and stable banking system, better equipped to withstand future challenges.

Aparna Thakur

(Fin-Tech manager)







Email: info@10bestincity

#siliconvalley, #bayarea, #sanjose #sanfrancisco, #california, #siliconvalleylife, #technology, #tech, #realestate, #santaclara ,#paloalto, #sanjoseca ,#bayarearealestate, #siliconvalleyrealestate, #cupertino, #entrepreneur, #sunnyvale, #startup, #sanjosecalifornia, #realtor, #business, #southbay, #sfbayarea, #losgatos, #milpitas, #bayareaeats, #dtsj, #luxuryrealestate, #norcal, #fremont

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@Shekhar Gupta @10 Bestincity @Aparna Thakur

Income Proof Now Mandatory for Rs10 Lakh Investment in Small Savings Schemes

Income Proof Now Mandatory for Rs10 Lakh Investment in Small Savings Schemes

In a recent development, the Indian government has made income proof mandatory for investments of Rs 10 lakh or more in small savings schemes. The move aims to curb money laundering, tax evasion, and other illicit activities that may be facilitated through such investments. Small savings schemes, such as the Public Provident Fund (PPF), National Savings Certificates (NSC), and Post Office Deposits, have been popular among individuals looking for safe investment options with attractive returns. However, the new requirement of providing income proof adds an additional layer of scrutiny to larger investments in these schemes.

This article explores the details of the recent circular and its impact on investors.

1.New KYC Segmentation: Low, Medium, and High-Risk Categories To strengthen the know your client (KYC) process, India Post has introduced a three-tiered categorization for customers holding accounts with them. The categories are based on the maturity value of certificates and the balance in savings accounts.

a. Low-Risk Category: Investors with certificates or a balance up to Rs 50,000 fall into this category. They are required to provide two passport-size photographs and self-attested copies of Aadhaar and Permanent Account Number (PAN) as documentation.

b. Medium-Risk Category: Investors with investments ranging from Rs 50,000 to Rs 10 lakh belong to this category. Similar to the low-risk category, they need to provide the aforementioned documents along with additional address proof, such as a driving license or utility bills.

c. High-Risk Category: Investors with investments exceeding Rs 10 lakh are classified as high-risk. In addition to the standard documentation, they must furnish proof of the source of funds, including bank statements, income tax returns, succession certificates, sale deeds, or any other documents reflecting income or fund sources.

2.Guardian and Minor Accounts: If the investor is a minor, the guardian’s KYC and income proof requirements apply. The guardian must also provide the necessary documentation for the KYC process.

Regular KYC Renewal: Depositors in the low, medium, and high-risk categories are required to resubmit their KYC documents every seven, five, and two years, respectively. This ensures up-to-date information and compliance with regulatory standards.

Aadhaar and PAN Submission Deadlines: Existing India Post depositors who have not yet submitted their Aadhaar details must do so before September 30, 2023. Similarly, PAN details must be furnished within two months if the account balance exceeds Rs 50,000, aggregate credits exceed Rs 1 lakh in a financial year, or if the transfer or withdrawal from the account exceeds Rs 10,000 in a month.

3.Consequences of Non-Compliance: Failure to submit the required documentation will result in the account becoming non-operational.

Reporting Cash Transactions: Postal authorities have been entrusted with the responsibility of reporting cash transactions valued at Rs 10 lakh or above. Additionally, cash transactions below Rs 10 lakh, but totaling more than Rs 10 lakh within a calendar month, must be periodically reported.

4.Benefits and Considerations of Small Savings Schemes: Small savings schemes offer attractive interest rates and tax breaks under Section 80C. However, they often have lower liquidity. Investors should align their investment horizon with the duration of the chosen savings instrument to ensure compatibility.

The decision to mandate income proof for investments of Rs 10 lakh or more in small savings schemes is a significant step towards promoting transparency and combating financial irregularities. By imposing this requirement, the government aims to discourage money laundering, tax evasion, and the use of these schemes for illegal activities. While it may add an extra layer of documentation for investors, it ultimately contributes to a more accountable and legitimate financial system. As the implementation of this policy unfolds, it is expected to enhance trust in small savings schemes, protect investors' interests, and foster a healthier investment environment in India.

Aparna Thakur

(Fin-Tech manager)







Email: info@10bestincity

#investment, #luxury, #bhfyp, #business, #entrepreneur, #success, #money, #marketing, #realestate, #house, #luxurylifestyle, #forsale ,#entrepreneurship, #realtor, #startup, #bitcoin, #forex, #investment, #millionaire, #wealth, #realestateagent@State Bank of India @Union Bank of India @ Punjab National Bank @Canara Bank @Bank of Baroda @HDFC Bank @ICICI Bank @Yes Bank @Shekhar Gupta @10Bestincity@Aparna Thakur

lot of corruption in Mahakal Lok of thousands of crores

There was a lot of corruption in Mahakal Lok of thousands of crores

Metal idols were to be made, plastic idols were made...... Iron GI sheet was to be installed in the parking lot, but after changing the terms of the tender, poly was installed sheet of carbonate

Mahakal Lok could not withstand the first rain yesterday, the storm was blowing with a speed of 30-35 kilometers per hour!!!...... Many idols installed in Mahakal Lok were destroyed on the ground.

Mahakal Lok has been inaugurated by PM Narendra Modi on 11th October last year itself i.e. only 9 months have passed and since then the poor quality work done there has been exposed.

Significantly, the investigation is also going on in the Lokayukta regarding the shoddy work. This project has been built by Ujjain Smart City. An MLA from Ujjain had complained that the CEO of Ujjain Smart City misused his position and made a profit of one crore to the contractor by replacing the item of iron GI sheet with polycarbonate sheet against the rules. Have delivered. On the basis of this complaint, the chief engineer of the technical branch of the Lokayukta organization is also investigating.

The Lokayukta has sought answers from the officials running the Ujjain Smart City Company regarding disturbances in the tender process, arbitrary payment, giving tenders to favourites, shoddy construction work, misuse of office, harming the government.

In this 900 meter long Mahakal corridor, idols of metals were to be installed, which do not change for 100 years, but idols made of such materials were installed which did not last even for 10 months.

The idols fell only yesterday, but their color had already started falling off. Tourists who came to visit Mahakal Lok had spoken to the administrators many times in this regard, but the corrupt people did not even listen to them, and yesterday they insulted themselves at the national level.

Big claims were made at the time of making these idols of Mahakal Lok. It was said that these idols will neither be damaged by the storm nor will it be affected by the rain, but these idols made of Plaster of Paris and plastic got uprooted from their stand and fell on the ground in the first rain itself.

Apart from this, the depth of the idols engraved on the walls of Mahakal Lok, the Sanskrit verses engraved on them, is also very less, it is clearly known that the idols were not made in the way that was mentioned in the tender. That is, the main contractor has been benefited by changing the conditions in the tender.

The biggest thing is that this information has not come in the public domain that to which company the contract has been given, unconfirmed sources are telling that Gujarati company has been given the contract........

 हजारों करोड़ के महाकाल लोक में हुआ जमकर भ्रष्टाचार ......बननी थी मेटल की मूर्तिया, बन गई प्लास्टिक की मूर्तियां ......पार्किंग में लगनी थी लोहे की जीआई शीट लेकिन टेंडर की शर्तो में बदलाव कर लगाई गईं पॉली कार्बोनेट की शीट

महाकाल लोक कल पहली बारिश अंधड़ नही झेल पाया 30-35 किलोमीटर प्रति घंटा की तेजी से हवा क्या चली !!!......महाकाल लोक में लगी अनेक मूर्तियां जमीन पर धराशाही हो गईं। 

महाकाल लोक का उद्घाटन पीएम नरेंद्र मोदी ने पिछले साल 11 अक्तूबर को ही किया है यानी अभी कुल 9 महीने ही हुए है और अभी से वहां किए गए गुणवत्ताहीन कार्यों की पोल खुल गईं हैं

गौरतलब है कि घटिया काम को लेकर लोकायुक्त में जांच भी चल रही है। इस प्रोजेक्ट का निर्माण उज्जैन स्मार्ट सिटी ने किया है उज्जैन के एक विधायक की शिकायत की थी कि उज्जैन स्मार्ट सिटी के सीईओ ने अपने पद का दुरुपयोग कर ठेकेदार को नियम विरुद्ध लोहे की जीआई शीट के आइटम को पॉली कार्बोनेट शीट से बदलकर एक करोड़ का फायदा पहुंचाया हैं. इस शिकायत के आधार पर लोकायुक्त संगठन की तकनीकी शाखा के चीफ इंजीनियर जांच भी कर रहे है 

लोकायुक्त ने टेंडर प्रक्रिया में गड़बड़ी, मनमर्जी से भुगतान, चहेतो को टेंडर देना, घटिया निर्माण कार्य, पद का दुरुपयोग, शासन को हानि पहुंचाने को लेकर उज्जैन स्मार्ट सिटी कम्पनी चला रहे अधिकारियों से जवाब मांगा है। 

900 मीटर लंबे इस महाकाल कॉरिडोर में धातुओं की मूर्तियां लगनी थी जिन्हें 100 साल तक कुछ नहीं होता पर ऐसे पदार्थों से बनी मूर्तियां लगाई गई जो 10 महीने भी नही टिकी

मूर्तियां तो कल ही गिरी लेकिन इनका रंग रोगन तो पहले से झड़ने लगा था महाकाल लोक घूमने आए टूरिस्ट इस संबंध में व्यवस्थापको को कई बार बोल चुके थे लेकिन भ्रष्टाचार करने वालों के कानो में जू भी नही रेंगी और कल राष्ट्रीय स्तर पर अपनी बेज्जती करा ली

इन मूर्तियां महाकाल लोक के निर्माण के समय बड़े-बड़े दावे किए गए थे। कहा गया था कि यह मूर्तियां ना तो आंधी तूफान से खराब होंगी और ना ही इस पर बारिश का कोई असर पड़ेगा, लेकिन प्लास्टर ऑफ पेरिस और प्लास्टिक की बनी इन मूर्तियों में पहली बारिश में ही अपने स्टैंड से उखड़ कर जमीन पर गिर गईं

इसके अलावा महाकाल लोक में जो दीवारों पर मूर्तियां उकेरी गई है जो संस्कृत श्लोक उकेरे गए हैं उनकी गहराई भी बेहद कम है साफ पता लग रहा है कि मूर्तियों को उस तरीके से नहीं बनाया गया था जैसा की टेंडर में उल्लेखित था। यानी कि टेंडर में शर्तो में बदलाव कर मुख्य ठेकेदार को लाभ पूहंचाया गया है

सबसे बड़ी बात तो यह है कि यह जानकारी पब्लिक डोमेन में ही नही आई है कि ठेका किस कम्पनी को दिया गया है   

सूत्र बता रहे हैं कि गुजराती कम्पनी को ठेका बांटा गया है ........


Bad Debt vs Good Debt : Understanding the Distinction

Bad Debt vs Good Debt : Understanding the Distinction


Debt is a financial tool that allows individuals and businesses to access funds they may not have readily available. While debt is often associated with negative connotations, it is essential to understand that not all debts are created equal. In fact, debts can be broadly classified into two categories: bad debt and good debt. These categories are based on the potential long-term impact they can have on an individual's financial well-being. This essay aims to explore the distinction between bad debt and good debt, highlighting their characteristics and implications.

Bad Debt:

Bad debt refers to loans or credit that does not contribute to the individual's overall financial growth and carries a higher level of risk. Examples of bad debt include high-interest credit card debt used for unnecessary purchases, personal loans for luxury items, or loans taken for speculative investments. Bad debt is typically characterized by the following traits:

a. High interest rates: Bad debts often come with exorbitant interest rates, making it challenging to pay off the principal amount.

b. Depreciating assets: Bad debt is often associated with purchases that do not hold their value or have a potential for long-term appreciation.

c. No potential for income generation: Bad debt does not generate income or have the potential to increase an individual's earning capacity.

Example of Bad Debt                                                                                                                                                                                                                       

1.Payday loans

Payday loans generally offer short-term, high-interest loans, often without requiring a credit check. These types of loans can have higher interest rates, and you usually have to pay them back by your next payday. 

Payday loans usually don’t get reported to any of the major credit bureaus. That means even if you do make on-time payments, your credit scores probably won’t reflect it.

2.Debt that negatively affects your credit scores

Debt that affects your credit scores in a negative way is an example of bad debt. This can even happen to a good debt if it isn’t responsibly managed—say, if you fall behind on payments or if your credit utilization ratio increases.

Good Debt:

Good debt, on the other hand, refers to loans or credit that can contribute positively to an individual's financial well-being and potentially lead to long-term growth. Good debt is typically associated with investments in assets that have the potential to increase in value or generate income. Here are some characteristics of good debt:

a. Low interest rates: Good debt often comes with lower interest rates, making it more manageable to repay over time.

b. Appreciating assets: Good debt is typically used to invest in assets like real estate, education, or starting a business, which have the potential to increase in value or generate income.

c. Potential for income generation: Good debt can provide opportunities for individuals to increase their earning potential or generate passive income.

Examples of Good Debt


Monthly mortgage payments build equity. And this could lead to a higher net worth. And interest paid on a mortgage can sometimes be tax-deductible. 

2.Student loans

Financing education can be necessary to get a degree, and a degree has the potential to increase earnings. Student loans typically have lower interest rates, compared to other lines of credit. Plus, the interest can be tax-deductible.

3.Small-business loans

Taking on debt to start a business can be helpful for building wealth. But it’s a good idea to keep in mind the risks of starting a business before taking out a loan. 

4.Personal loans

A personal loan can be helpful for consolidating debt at a lower interest rate. And if it’s an unsecured personal loan, you may not need collateral—like your home—to secure the financing. 

5.Credit cards

With responsible use, credit cards can help build credit, which can help you do things like borrow money, get a credit card or rent an apartment. Making the minimum payment on your credit card over time may help keep your account current and in good standing.

How to avoid bad debt?

Debt happens. It’s what you do with it that determines whether debt could be good or bad. And while it’s not always possible, it can help to figure out whether the debt you’re taking on is something you can afford. Here are some tips to help:

1.Review your possible monthly payment. Would this new bill be something you can actually afford?

2.Look at the interest rate. The lower the interest rate, the less interest you could pay over the life of the loan.

3.Think about your long-term goals. Will borrowing this money help or hurt you in the long run?

Understanding the distinction between bad debt and good debt is crucial for making informed financial decisions. Bad debt can burden individuals with high interest rates and depreciating assets, leading to financial stress and limited opportunities for growth. In contrast, good debt, with its lower interest rates and potential for income generation or asset appreciation, can be used strategically to enhance an individual's financial position over the long term. It is essential to exercise caution when taking on debt and prioritize investments that align with personal financial goals. By distinguishing between bad and good debt, individuals can make informed choices to build a stronger financial foundation and work towards their desired financial future.


Aparna Thakur

(Fin-Tech manager)







Email: info@10bestincity


@SBI @HDFC @PNB @Bank of Baroda @Canara Bank @Axis Bank @ICICI Bank @Union Bank 

@Shekhar Gupta @1OBestincity @Aparna Thakur

Blockchain and Cryptocurrency: Revolutionizing Startups and Finance

 Blockchain and Cryptocurrency: Revolutionizing Startups and Finance

#Blockchain,   #Cryptocurrency, #Revolutionizing,  #Startups,  #Finance

Blockchain and cryptocurrency have indeed revolutionized the startup ecosystem and the finance industry in several ways. Let's explore how they have made an impact:

Decentralization: Blockchain technology allows for decentralized systems, eliminating the need for intermediaries such as banks or payment processors. This decentralization brings increased transparency, security, and efficiency to various processes.

Fundraising through Initial Coin Offerings (ICOs): Startups can raise funds by creating their own cryptocurrencies or tokens and selling them through ICOs. This method of crowdfunding provides opportunities for early-stage companies to access capital globally without traditional venture capital or banking channels.

Smart Contracts: Blockchain platforms like Ethereum enable the creation of smart contracts, which are self-executing agreements with predefined rules. These contracts automatically execute when the conditions specified within them are met, reducing the need for intermediaries and streamlining processes such as legal agreements, supply chain management, and financial transactions.

Tokenization of Assets: Blockchain technology allows for the tokenization of real-world assets like real estate, artwork, or commodities. By representing these assets as digital tokens on a blockchain, they can be easily bought, sold, and traded, providing greater liquidity and accessibility to investors.

Cross-Border Payments and Remittances: Cryptocurrencies enable fast and low-cost cross-border transactions, eliminating the need for traditional remittance services. This benefits startups by reducing transaction fees and settlement times, facilitating global business operations.

Financial Inclusion: Cryptocurrencies and blockchain technology have the potential to provide financial services to the unbanked and underbanked populations globally. With just a smartphone and internet access, individuals can participate in the digital economy, access banking services, and make transactions without relying on traditional financial institutions.

Disrupting Traditional Banking: Cryptocurrencies challenge the traditional banking system by providing an alternative form of storing value and making transactions. This has pushed banks to explore blockchain technology themselves and adapt to changing customer demands.

Enhanced Security and Transparency: Blockchain technology offers enhanced security through cryptographic techniques, making it difficult for malicious actors to tamper with transaction records. Additionally, the transparent nature of blockchain enables anyone to verify transactions, increasing trust and reducing the risk of fraud.

Peer-to-Peer Lending and Crowdfunding: Blockchain platforms have facilitated the emergence of peer-to-peer lending and crowdfunding platforms. Startups can access funding directly from individuals or small investors, bypassing traditional lending institutions.

Data Privacy and Ownership: Blockchain provides a framework for individuals to have greater control over their personal data. Startups can leverage decentralized identity solutions on the blockchain, empowering users to manage and share their data securely.

While blockchain and cryptocurrencies have introduced transformative possibilities, it's worth noting that regulatory frameworks and scalability challenges still need to be addressed to fully realize their potential. Nonetheless, their impact on startups and the finance industry is undeniable, opening up new avenues for innovation, efficiency, and inclusivity.

What Is the Difference Between Cryptocurrency and Blockchain?

The crypto world is full of jargon. Let’s see if we can untangle a couple of closely related topics that are often not expressed clearly: the difference between Cryptocurrency and Blockchain.

A Cryptocurrency is a form of Digital money. Bitcoin, Ether, Litecoin, and Tether are examples. Units of cryptocurrency are called coins or tokens.

A blockchain is a distributed peer-to-peer database that has strict rules for adding data. Each cryptocurrency is associated with a blockchain that serves as its open ledger.

Behind the Bitcoin Cryptocurrency is a Blockchain known as the Bitcoin Blockchain. Ether runs on a blockchain database called Ethereum. Litecoin has its own blockchain, which is derived from the open source Bitcoin blockchain.

Tether doesn’t have its own blockchain. Tether tokens exist on the Ethereum blockchain, and that’s where Tether transactions are recorded. Ethereum was designed for maximum flexibility, and many tokens are hosted there.

Ethereum is so flexible that in addition to cryptocurrencies, the Ethereum blockchain hosts most of the market’s most popular non-fungible tokens, or NFTs. Those tokens are like cryptocurrency coins and tokens except that each NFT has a unique identity, like a serial number, so individual tokens can have different values.

See how simple that is? Now when you are asked “What is blockchain, and cryptocurrency – isn’t that the same thing?” you will be able to answer with confidence.

What Is Blockchain Technology and How Does It Work?

What is Blockchain? American comedian Stephen Colbert says that “it’s gold for nerds.” Well, the nerds are now the popular kids on the block, and blockchain technology is becoming one of the most prominent trends in finance and digital innovation since the creation of the Internet.

What is Blockchain? American comedian Stephen Colbert says that “it’s gold for nerds.” Well, the nerds are now the popular kids on the block, and blockchain technology is becoming one of the most prominent trends in finance and digital innovation since the creation of the Internet.

Blockchains are databases. Instead of being stored on a central server that’s accessed by all users, blockchain records are stored on users’ computers all over the world. That makes blockchain a distributed database with a peer-to-peer architecture. “Distributed” means that the data is stored in multiple locations and “peer-to-peer” means that there is no central authority that holds a master copy of the data.

Satoshi Nakamoto’s Bitcoin blockchain is not the first distributed database and it is not the first peer-to-peer database. It isn’t the first blockchain. But it serves as the basis for the first modern cryptocurrency and it is the starting point for the blockchains that have come after it.

How Does Blockchain Work?

Let’s say we want to store data about a poker hand in a database. We’ll start by assigning each of the cards in the deck a number: 1 is the ace of spades, 2 is the 2 of spades, 3 is the 3 of spades, all the way up to 52, the king of hearts. Your hand might look like this:

Record Card value

1 12

2 44

3 4

4 31

5 27

Think of record numbers as the row numbers in a spreadsheet. Database programmers call them records, and blockchain programmers call them blocks. Row, record, block – they all refer to a single chunk of data.

Your opponent’s hand would occupy rows 6-10, another hand might be stored in 11-15, and so on. So if you want to specify which hand you’re talking about, you need only tell the database which row holds the first card.

Links in the Chain

Of course, in a distributed peer-to-peer database, other users may be dealing hands at the same time you are. Your cards are unlikely to appear in consecutive rows. So we can add pointers to the previous and next cards to link the data in a chain:

Record Card value Prev card Next card

15 12 0 37

37 44 15 118

118 4 37 121

121 31 118 199

199 27 121 999

The first card in your hand is stored in row 15. The card value is 12, which makes it the queen of spades. There’s no previous row in your hand, so we put a 0 in the “Prev card” column. The next card is stored in row 37.

So we take a look at row 37. It, too, specifies a single card, points to the row where the previous card can be found (15) and points to the next card, which is stored in row 118.

In computer science, this structure is known as a doubly linked list because it links both forward and backward. The pointers are stored in the database as data along with the card values.

Securing the Data

There is nothing to stop us – or hackers – from changing card values. This database makes cheating easy. Anybody with access to the database could change the values of your hand’s first four cards to 1, 14, 27, 40 – that’s four aces.

We can guard against data errors and hackers by adding a column. For each row, we’ll add a column that contains the sum of card values, like this:

Record Card value Prev card Next card Checksum

15 12 0 37 12

37 44 15 118 56

118 4 37 121 48

121 31 118 199 35

199 27 121 999 58

See how this works? For our second card, the checksum value is 56, which is the sum of the values of the first two cards, 12 and 44. The checksum for card three is the sum of the next two cards. Every time we read a card value we can calculate the checksum and compare it to the checksum stored in the database. If they aren’t the same, we know the data has been tampered with.

The memory chips inside your computer and smartphone detect errors using this system. This system is also used for finding errors on your hard drive.

This simple checksum system is an essential part of blockchain technology. It is well known to first-year computer-science students.

It’s also laughably vulnerable to hackers. Anyone who has sufficient access rights to change card values could also alter the checksums to cover up his work. Or the hacker could alter the “previous card” and “next card” pointers to replace a card in your hand with a card stored in a different row.

Nakamoto anticipated these vulnerabilities in his blockchain architecture. Instead of employing simple addition to create checksums and track links in the chain of data, he used a cryptographic process called “hashing.”

Hashing and Encryption

Hashing creates a unique identifier by combining the previous record’s value with the current record’s value in a one-way mathematical process resulting in a hash value like 06C4D99F32047. It’s called one-way because there is no matching mathematical process to turn 06C4D99F32047 back into the original data.

In a blockchain, the hash value for each block is based on the previous block’s hash value, which is based on the hash value of the block before that, all the way back to Nakamoto’s block 0. You can compute the hash value for any block and compare it with the hash value that is stored in the block. If they don’t match, the data has been tampered with.

In a conventional database, one could tamper with data, then compute new hash values and inject them into subsequent blocks or records to hide the effects. That doesn’t work with a distributed peer-to-peer blockchain database, because the hacker would have to simultaneously change copies of the database that are stored on hundreds or thousands of computers.

One consequence is that although it is possible to add new data blocks to the blockchain, previous blocks can’t be deleted or altered. This means that you can’t send yourself $100,000 in Bitcoin and erase the transaction

Every transaction on the blockchain is validated using this hash mechanism.

In addition, Nakamoto set encryption in place to ensure that data stored in the blockchain would be viewable by every user but decipherable only by those who had the proper decryption keys. Without the key, all you see is a stream of nonsense characters.

The Power of Blockchain Technology

Blockchain technology makes data private, permanent, and verifiable. The record of data and transactions is public, but encryption protects it from prying eyes and alteration. This is why the Bitcoin blockchain is often referred to as Bitcoin’s “open ledger.”

All that hashing and encryption takes a lot of computing resources. It’s slow. Worldwide, the entire Bitcoin blockchain network is limited to processing 4.6 transactions per second. Credit card companies routinely process an average of 1,700 TPS and claim they are capable of handling 56,000 TPS. The 4.6 TPS limit is the main source of Bitcoin’s scalability problem. Computer scientists are working on it.

The network of computers validating Bitcoin transactions is said to be consuming more electrical power than Switzerland.

Many of Bitcoin’s transaction-validating nodes hold the entire blockchain, which is currently about 250 GB of data. These are known as full nodes. The network also includes SPV nodes that perform simplified payment verification. There is no straightforward way to count the nodes. A website called Bitnodes provides an updated count of nodes currently online and reachable, but a quick Google search demonstrates that experts provide estimates of the number of nodes ranging from 6,000 to 200,000. No one really knows how many there are.

All About Ethereum

The most widely used blockchain is Ethereum, which includes modifications that make it more flexible than the Bitcoin blockchain. Ethereum has its own cryptocurrency – Ether – but developers have created many additional cryptocurrencies that run on the Ethereum blockchain. The platform is also used for many kinds of applications in addition to virtual money.

One of the main benefits of Ethereum is that it can hold executable programs in addition to data. These programs are known as “smart contracts.” For example, a smart contract for tithing could add up all the Ether added to your account this month and send 10% to the church as a donation.

Like the Bitcoin blockchain, Ethereum is tamper-proof. Luxury watchmaker Breitling gives owners of its watches digital certificates that prove authenticity. If you sell the watch, you can transfer the certificate to the new owner, establishing a verifiable chain of ownership. The technology can also be used to trace the provenance of food in the grocery store, tracking every transfer. More and more people care about ethical sourcing, and blockchain can be part of that.

In 2020, the Associated Press posted minute-by-minute American presidential election results to the Ethereum blockchain to create an immutable record of verified official vote counts.

The Ethereum blockchain handles about 30 TPS. Developers are hard at work on future versions of Ethereum that will use a technique called sharding to run multiple blockchains at once, with consolidated transactions posted asynchronously to the central blockchain. Developers hope new versions of the Ethereum blockchain will handle as many as 100,000 TPS.

Because Ethereum runs smart contracts, it serves as a platform for many blockchain-related applications. Most blockchain-based decentralized applications – especially decentralized financial apps – are based on the Ethereum main chain or private Ethereum blockchains.

Ethereum is also a top choice for corporations looking to implement token-based economies. For example, a company might implement a loyalty program in which customers receive Acme Coins with every purchase. Then there could be a gift shop in which Acme Coins could be traded for benefits. The company could create a network of companies that also accept Acme Coins, giving the tokens a de facto value although they cannot be exchanged for dollars or euros.