Create Company Profile | Contribute Content | Advertise | Email Newsletter ... A corporate records book is the place to keep important corporate papers all in one place, including Articles of Incorporation, bylaws, meeting minutes, the stock certificate ledger, stock certificates, stock certificate ...

What Is a Corporate Records Book? - AllBusiness.com

It&#x27;s also a special moment that marks the beginning of an exciting business journey. To professionally and formally organize all of your corporation&#x27;s documents in an attractive manner, you may want to consider a corporate kit. One way to think of a corporate kit is as a corporate record book ...

What is a corporate kit and do I need one? | Legalzoom

A familiar sight in any office is that bookcase filled with minute books. It is a monument to how most companies have managed their corporate record keeping for years. But in today’s virtual working environment, many companies are reviewing how they track their information and update physical ...

Best Practices in Corporate Record Keeping & Minute Books | Wolters ...

Some corporations have a corporate records &quot;book,&quot; which includes all the required documents. In other cases, the corporate records are kept online or in a file cabinet. The records should be in one place and available if the Internal Revenue Service audits your corporation.

What a Corporate Records Book Is and How to Keep It Updated

Your company’s minute book is where important paperwork such as state filings and meeting minutes are kept. Keep it up-to-date to remain compliant with the law.

Keeping Your Company Minutes and Record Book Current

If you’re looking to create an independent record label, this book written by J.S. Rudsenske and J. P. Denk is a great choice. The authors have provided a detailed guide of the process you need to follow to realize this goal.

Best Books on Starting a Record Label | BookSummaryClub

All companies report annually to the Companies Office. ... You need to keep a record of minutes from board and committee meetings, as well as resolutions from shareholders.

Keeping company records | Companies Register

The basic organization of an operational document that every corporation and LLC should keep and maintain in their corporate record book include the original filing documents, any document from the Secretary of State authorizing and granting the creation of the corporation, all annual reports ...

The 4 Types of Records that Every Corporation and LLC Should ...

Alan McGee hates it, decrying it as “the accountants’ story”, but it remains arguably the greatest book ever written about an independent record label. Thankfully it is not until the final chunk of the book that Oasis show up and the company shifts from being a freewheeling indulgence ...

The 15 Music Industry Books You Must Read - Music Ally

Single shareholder, single director corporations are no exception to this record keeping requirement. While the New Hampshire Revised Limited Liability Company Act does not contain the same record keeping mandate, all LLCs should maintain a record book as a matter of sound business practice.

Know The Law: Do I Need to Maintain a Corporate Record Book? - ...

RecordBook

recordbook

Build Your Own BEP-20 Token in a Single Afternoon—No Prior Experience Needed

Warp Core of Confidence: How Blockchain Creates Trust in the Digital Frontier

Much has been said about blockchain, about how it is the technology of the century and the future, and about its potential and how it can disrupt several niches ranging from supply chain management to finance. It has gathered a lot of traction and criticism from high-profile individuals and institutions, ranging from J.P. Morgan of Chase Bank to the average John on the street to the average Mike on Twitter. Cryptocurrency, especially its grandfather, Bitcoin, has also made waves across headlines and different social media feeds, as it gained an all-time peak high of 67,000 USD some months ago. An important use case of Blockchain: However, to many people, the mention of blockchain equals Bitcoin and cryptocurrencies, a case of a mix-up between technology and its use case. What is the difference between blockchain and cryptocurrency? Will I be able to understand this? Don't worry. It will be interesting. I promise! Blockchain is a and of transactions that imminently records data or transactional information so that recorded information can't be altered or modified. It is a distributed database that is shared among all connected computer networks, also known as nodes. decentralized distributed public ledger A blockchain can be thought of as an electronic database that holds information but in a digital format. The innovative idea brought about by a blockchain is that it ensures the accuracy and safety of data records and establishes confidence without the requirement of a third party or centralized bodies that can be relied upon. Do you know .? Yes, the same Google doc. Google doc Reductively, the Google doc is the best illustration tool and model for comprehending the know-how and what blockchain technology is. On Google doc, when we make a document and then share it with a group of colleagues, the document is shared with everyone rather than copied or transferred to any recipients. This results in the formation of a decentralized distribution of the document, granting simultaneous access to everyone on the document. This document (now a live document), grants everyone the ability to see the changes made by any party; not only this but also the document history of those changes may be viewed at any time by anyone. This makes the process of making changes entirely open and accessible. The blockchain is, without a doubt, more intricate than a Google Doc; yet, using the latter as a comparison helps to illustrate three key concepts underlying the blockchain technology, which include: Decentralization Distributed Public Ledger Immutability Decentralization Decentralization is the process, act, or system of taking away governance or authority from a centralized entity and handing it over to every user in an ecosystem. It conceptualizes disintermediating the dominance of a powerful central body as oversight and eliminates third-party interference. In the case of blockchain technology, the decentralization feature keeps it aloof from being controlled and censored by a government or a handful of users who stand as middlemen or third parties. The information recorded on the blockchain technology is not stored centrally on a single server or archive; instead, it is distributed across all nodes—interconnected computers—in its ecosystem. Distributed Public Ledger A ledger is a record book that records day-to-day transactions, from buying to selling. A public ledger can be regarded as an open ledger available for every Tom and Harry to study and scrutinize. The blockchain is referred to as a public ledger because all transactions recorded on it as a ledger are distributed across all nodes in its ecosystem. Every node on a blockchain gets a replica or duplicate of every transaction recorded. This is why blockchain is immutable. Immutability Immutability is the ability of something not prone to being changed or manipulated. Transactions recorded on the blockchain network are immutable, i.e., they can’t be altered, modified, or hacked; once it’s recorded, the data stays forever. Since blockchain transactions are time-stamped, it is almost impossible to be hacked or changed unless the hacker can hack 51% of nodes on the blockchain at the same time and alter the recorded transactions at the same time (which is nearly impossible). . Blockchain technology is sometimes referred to as Distributed/Decentralized Ledger Technology—DLT—due to the earlier features discussed. The name “blockchain” was coined owing to how transactions are recorded HOW? Transactions are recorded every second on a blockchain; during this, records are taken into account with respect to their time frame. All transactions taking place are recorded chronologically and cryptographically stored on top of one another in a block. If a block has been filled with records of transactions, another block is created to continue taking records of transactions. The newly created will have a part of the last transaction recorded in the previous block as its first transaction; this will create a linking both blocks together. It goes for all transactions recorded in blocks continuously to form a . block chain, Blockchain Do you understand now? Many companies and organizations have developed their blockchains to serve various use cases. This has led to the emergence of quite a number of blockchains like Bitcoin, Ethereum, Solana, Tron, Polkadot, and so on. Blockchain has hitherto been employed in various sectors cutting across medicine, logistics, real estate, supply chain, banking, and finance, amongst a few. The financial use cases of blockchain brought it to the limelight with the advent of cryptocurrency What is Cryptocurrency? Cryptocurrency is a virtual or digital currency that solely depends on cryptography technology to function. It is a form of currency inclined to blockchain technology as a native token. Like every nation has its generally accepted fiat currency, every blockchain also has its native token, which serves as a payment medium within its respective blockchain ecosystem. Although some tokens were developed on a single blockchain, this is only common and possible with blockchains with smart contracts—a self-executing and self-enforcing set of pre-defined rules or agreements encoded in a computer code- chiefly, the Ethereum solidity language. Cryptocurrencies can be gotten through mining or exchange platforms, like Binance and CoinBase, to mention a few, by exchanging them with fiat money. Blockchain technology birthed cryptocurrency as it serves as the crypto bedrock. Bitcoin cryptocurrency is the first and most popular cryptocurrency that brought both crypto and blockchain to the limelight in 2008. Bitcoin was developed by a developer with the pseudonym Satoshi Nakamoto. Several cryptocurrencies and blockchains have been developed since then; thousands of cryptocurrencies and tokens are currently in circulation. Cryptocurrencies, or coins, are of two kinds, which are: Stablecoins These are crypto coins pegged to fiat or physical money value, i.e., they have the same value as the original physical currency. Examples are USDT, DAI, BUSD, USDC, TUSD, and their ilk. These mentioned coins are less volatile and are usually pegged to the U.S. dollar. Unstable Coins These are volatile crypto coins or tokens; their respective price varies due to complex market factors and marketing hype. Generally, cryptocurrencies are volatile digital assets that can rise and fall in price or value within seconds or minutes. Examples of these coins are Ethereum, TRX, XRP, XLM, Dogecoin, Litecoin, and other altcoins— all coins except Bitcoin. What are the Differences Between Blockchain and Cryptocurrency? In a tabular form, Blockchain Cryptocurrency Blockchain is a distributed public ledger used for storing data in a decentralized ecosystem. Cryptocurrency is a digital currency or asset based on the blockchain. It has no monetary value and can’t be used as a medium of exchange. It has monetary value and can be adopted as a medium of exchange. Its application goes beyond cryptocurrency. It can’t exist without blockchain. Blockchain is transparent; anyone can join and view transaction information. Cryptocurrency is not transparent like a blockchain; you can only see the crypto source or destination wallet, and the wallet owner remains anonymous. A blockchain can accommodate other tokens aside from its native crypto owing to its smart contract. Cryptocurrency can’t accommodate any other tokens but can be exchanged for an equivalent of other tokens. Types of blockchains include Public, Private, Hybrid, and Consortium blockchains. Types of crypto include stable coins, unstable coins, and fungible and non-fungible assets. Examples of blockchains are Bitcoin, Ethereum, Tron, Cardano, Binance smart chain, Polkadot, Solana, Ripple, etc. Examples of Cryptocurrencies are Bitcoin, ETH, BNB, TRX, ADA, DOT, SOL, XRP, etc. Blockchains are built and owned by giant tech companies with huge finances. Crypto can be owned by anyone with a little amount of money. You can purchase some crypto for a fee as small as a dollar or $2. What are Tokens? Crypto tokens are digital assets that are developed in a smart contract of other blockchains. Only blockchains that feature smart contract enables other tokens to be built on them aside from their native crypto. An example of such a blockchain is the Ethereum blockchain. The Bitcoin blockchain has no smart contract and doesn’t allow another token to be built on it. There are two kinds of tokens, namely: : These are tokens that can be interchanged or exchanged for another of its kind or equivalent. 1 BTC is equivalent to another 1 BTC and can be exchanged for one another. Examples are USDT, TRX, BNB, and so on Fungible Tokens Non-fungible tokens—NFTs— are unique and customized digital assets that can’t be interchanged with one another. An NFT can be any digital piece like Arts, Images, documents, journals, music, etc. An NFT can’t replace another NFT because each has properties that are peculiar to them and make them unique. Non Fungible Tokens: Conclusion Blockchain is different from cryptocurrency in that it is a public ledger that records transactions. It is a kind of decentralized storage that extends beyond finances. On the other hand, cryptocurrency is a form of money in the digital sphere. It is one of the numerous use cases of the blockchain in the financial industry. Photo by on Robert Zunikoff Unsplash

Blockchain 101: Blockchain for Dummies

Like most millennials, I like things explained in the simplest way possible — Tweet-length, IG-story format. So the first time I heard the word “blockchain,” I immediately turned to Google for an all-encompassing, one or two-liner about the technology that was supposed to eliminate diseases, overthrow the government, and replace my bike with a lambo all in one fell swoop. Unfortunately, every article I read was sprinkled with terms I’d never heard of before, like “nodes,” “hashrates,” and “permissionless distributed ledger technology.” Each article and YouTube explainer made me more and more confused. Is blockchain really THAT complicated? Do you really need to have a masters in computer science from MIT to understand how it works? The answer, thankfully, is NO. Despite what many people think, blockchain is not a difficult concept to grasp. The problem is actually the way it’s currently being explained. Right now, most of the explainers out there are way too technical, leaving non-techy folks (like me) in the dust. But you shouldn’t have to be a coder to understand the VALUE a technology can provide. Take the internet, for example. You can explain it like this: “The internet is a globally connected network system that uses TCP/IP to transmit data via various types of media. The internet is a network of global exchanges — including private, public, business, academic and government networks — connected by guided, wireless and fiber-optic technologies.” But most of us would explain it this way: “The internet is a way for us to send and receive information digitally.” Or if we’re being honest: “The internet is a way for us to creep on our ex’s Facebook and binge watch Netflix” Value understood — check. So what about blockchain? My goal is to explain blockchain in a way that even your grandpa who doesn’t trust ATMs can understand. If you strip blockchain down to its core, you’ll find that it‘s just a record-keeping tool. Today we keep records for all sorts of reasons. Stores keep a record of all its stock and sales to manage inventory. Banks maintain a record of your deposits and withdrawals to keep track of how much money you have. And the bar down the street keeps a record of that tab you never intend to pay. We’re all very familiar with the record-keeping examples above. But what do they have to do with blockchain? Let’s take a closer look at the bank example and expand on it a bit. Let’s say your Aunt Carla lives abroad and wants to send you money here in the Philippines. You and Aunt Carla have bank accounts with the same international bank. Aunt Carla goes to her bank and says, “I want to send 100 USD to my nephew in the Philippines!” The bank first checks to make sure Aunt Carla has enough money and then records the transaction “Aunt Carla: -100 USD, You +100 USD**”** in its big bank record book. Kinda old-school. But believe it or not, this was the “best” way to send money across the world…up until now. The process of sending money through banks poses three major problems: We need to trust a middleman (i.e. the bank) to keep track of all our records and to make sure that no one (including bank employees) makes a mistake or messes with the records. The bank wants a sizeable cut of the transaction. Let’s say the bank fee is 15% (this is an actual rate some institutions charge!). Instead of getting that 100 USD from Aunt Carla, you’re only going to get 85 USD. The bank takes the remaining 15. The transfer takes time, often days, for you to even access the money your aunt sent you. By the time you get your 85 USD — 5 days later — you’ll probably be thinking: Blockchain technology can end all that frustration. Just imagine: Instead of relying on one middleman to keep track of all the records, what if all the records are instead public and can therefore be checked by everyone and anyone? On the blockchain, that record of -100 USD from Aunt Carla and +100 USD to you is sent to EVERYONE on the network. Because everyone now has a copy of that record, there is no one person who controls it. This means it’s impossible to give yourself extra money or steal from other people. The process removes bank fees and allows money to be moved instantly because it’s now going directly from Aunt Carla to you. It also prevents any accidental or intentional tampering of records. If your cousin Diane for example tried to fudge the record to give herself a little extra cash — typical Diane — she’d be denied. Why? Because the record she tweaked would not match anyone else’s. Now the idea that everyone can see how you get or spend your money may make you a bit nervous. You probably don’t want anyone else to know what you’re spending your money on. That’s okay, because on the blockchain, your identity is . Instead of your names, you and your Aunt Carla will be identified using a randomly generated string of alphanumeric characters. completely protected Now let that sink in for a second. With blockchain technology, we now have a foolproof way of storing digital records, that can NEVER be hacked or manipulated, allowing us to send money securely to anyone — instantly and virtually for FREE. THAT, my friends, is something we have never seen before. But sending money isn’t the only application of blockchain technology. And here is the Key Takeaway: ANY process that relies on trusting a middleman, regardless of industry, can potentially be improved with blockchain — which is why everyone’s so excited about it! Here’s a quick list of other ways blockchain can be applied to improve our lives. Eliminating voter fraud With blockchain technology we can tie every vote to an actual person while keeping their identity safe, completely eliminating any voter fraud and ensuring the person who gets elected REALLY WAS elected. Reducing subscription fees What if you could watch your favorite shows at a cheaper price? Service providers like Netflix are considered middlemen for distributing video content to paying customers. Blockchain can connect users directly to content providers, letting you binge freely on your favorite shows at a fraction of the current cost. Tracking product quality The process for shipping produce from farm to table can be a logistical nightmare. Shipments can get misplaced, stolen, or accidentally swapped with lower quality produce. That bag of organic Colombian dark roast you just paid a fortune for at Starbucks may actually contain synthetic beans from elsewhere. Blockchain’s foolproof record system ensures the origin and quality of products, including the beans in your morning coffee. Now get out there and impress all your friends with your new found blockchain knowledge!

A Millennial’s Guide to Blockchain (with GIFs and memes)

Last Thursday’s event, Blockchain Adoption in Business and Enterprise, held at eBay NYC on August 23rd, was one of the best quality events of the year. Organized by , the largest blockchain group in New York City, it was completely a sold out event with audience members from R3, IBM, Microsoft and more. BlockchainNYC.org While the networking opportunities were phenomenal, the highlight of the event was the stellar panel of speakers from Hyperledger, Consensys/Ethereum, EOS, and BlockchainDriven. Audience members had the opportunity to speak with these insightful leaders of blockchain afterwards, but the real gem was the panel discussion. Each of the speakers spoke about their respective companies, then moved onto the bulk of the event, discussing blockchain and distributed ledger technologies on an enterprise level. For those who missed it, here’s a full coverage of what these tech giants and what they had to share. Here’s Full Video Coverage of the Event: Karen Ottoni from cleared up some common misconceptions. “Hyperledger is a consortium, not a blockchain. It has 250 members plus an open source community of developers, 10 technologies, 5 frameworks and tools, most famously, Fabric.” Hyperledger When asked about how Hyperledger can be applied as a blockchain solution for enterprises she responded that Hyperledger is a codebase for anyone to use that’s open source and for any industry. While not a blockchain and limited in scaling potential, there are tools to link frameworks, such as Quill, and in the future companies that start on Hyperledger may be able to hopefully scale to a blockchain. Kevin Rose talked about , a dApp development platform with only 21 nodes, which increases transaction per second having only a half second of block time for the end user. His stance for the evening was that, “blockchain is the foundation that nations will be built on. Innovation should be guided and fostered, not persecuted.” EOS Peter Borovykh, a consultant at (BCD), discussed his recent work travelling to emerging countries in Latin America, Central Asia, Eastern Europe, and more recently the Middle East. “Emerging countries are the ones with higher need and interest in blockchain. Few US companies are using revolutionary thinking to take data and transactions into the future. The US is severely lagging behind.” BlockchainDriven Phil Kelly from , the largest blockchain company in the world and focused on Ethereum, cited that the blockchain field lacks talent, both in developers and in user experience/user interface (UX/UI). Consensys Getting into questions many people ask, they gave their insights on what exactly a private blockchain is. Private blockchains are not as scalable though with currency fluctuations and privacy concerns, businesses such as those in highly regulated industries like healthcare are turning to distributed ledger technology (DLT) instead of blockchain, some with the intent to shift over to blockchain later in order to grow and scale up. Perhaps in the future it will be possible to scale up with DLT according to Karen, but Peter believed that custom built blockchains are the better solution for enterprises. Kevin’s definition of blockchain was pretty open ended. “It allows anyone to store and exchange data and information that’s cryptographically secure while cutting out middlemen.” By Peter’s definition however, to decentralize and diffuse decision making for cost reduction across all layers, would mean that there really is no such thing as private blockchain as it lacks decentralization. The opinions here clearly differed and companies looking to explore blockchain may ultimately have to decide what’s right for them keeping both short and long term benefits in mind. Blockchain and DLT have the capabilities and potential to solve any number of issues companies face. “It increases efficiencies between parties. It’s a database we all agree on without trusting each other” said Kevin. On this the speakers Karen and Peter agreed calling blockchain a master record and reconciliation to ensure such and such happened without the back and forth. One record book, one network, which can ensure events and transaction. Phil went deeper, citing identities as an an example of the cryptographic capabilities of blockchain. It is proof and information that you are in control of, you can choose what to disclose, to whom, and always have that information. “You can automate to trust without having to go through all the levels.” But why should businesses consider blockchain? “Basically it’s a database on crack.” Peter couldn’t emphasize this point enough and all the speakers came back to this statement. “Every detail is posted. It really is a database on crack. It can literally be applied to any industry where info is shared. But the privacy concern is unwarranted as everything is encrypted and you can choose what information is visible.” “Combined with IoT, Ai, Smart contracts, you’ve got automation, accessibility, better visibility, transparency. So you’ve got new capabilities enabled beyond efficiency.” -Karen Ottoni, Hyperledger Blockchain reduces transaction friction and costs. You can tokenize paper processes, and it’s easier to track and reconcile. Even for payroll. It’s easier to move funds without intermediaries drawing out the process. “Incentives for validators are democratizing data within industries, businesses can focus on the human element and other efficiencies. On the enterprise level there’s so much happening that people don’t see. UX/UI is miles away from what it needs to be.” - Phil Kelly, Consensys On an interesting note, Consensys has responded to that issue by employing video game developers for UX/UI, a brilliant idea as they consider all aspects of user interaction and seamless engagement. Peter was asked recently if there’s a UI for blockchain to help businesses understand what it is and what it can do. It’s capable of so much and that information is getting lost. Taxes, real estate identity, finances, retail, hospitality, logistics, shipping, so many decision makers aren’t sure what blockchain can do within these very different industries. It’s hard for people to wrap their head around it, like all new technologies, and while blockchain can do so much, it’s still far from complete. Giving an interesting example of how blockchain is already changes lives, Kevin said, “In gaming, unique non fungible tokens exist which can represent in game items that can be traded and exchanged in real life. We have this already and it offers real life value to rare digital items, blowing up huge interest in collectibles translated into digital assets.” Where is blockchain now and what are the limitations? According to Peter, we need to build custom solutions as the existing are expensive. When Ethereum is down it’s the best thing for businesses because of gas, it’s cheaper, decentralized, public transactions. Kevin added that demand for use affects price. As new dApps come out, it drives the prices up. Phil agreed that we are seeing a huge new wave of growth. Kevin brought up a very poignant issue that not many people in blockchain discuss: “Smart contracts. How smart are they? Can they handle disputes? Who do I go to in an automated process? There’s still real logistical issues in dispute resolution.” - Kevin Rose, EOS Peter felt confident that blockchain technology will see major improvements in the years to come however, as it’s a chance for emerging countries to catch up and surpass the developed world that hold 90% of the world’s capital, taking advantage of under utilized resources and wealth. As the panel drew to a close, the speakers gave their final statements as the audience was eager to speak with them personally. “EOS is an open software and customizable. I see EOS being the blockchain of choice.” -Kevin Rose, Co-Founder of EOS New York “Hyperledger is a codebase for anyone to use that’s open source and for any industry with community driven development.” -Karen Ottoni, Ecosystem Manager at Hyperledger “Ethereum is public, frictionless, trustless. One level that brings about decentralization and avoiding censorship.” -Phil Kelly, National Director of Business Development at Consensys “As a blockchain consultant with BlockchainDriven, I’ve realized the importance of going to the field and talking to stakeholders to figure out the problems. Using open source coding to build and find solutions and figure out what they are. Not pitching solutions, but talking to decision makers who are strong and brave enough to recognize the issues and seek to solve them.” -Peter Borovykh, Consultant and Solution Architect at BlockchainDriven

Exclusive Event Coverage of EOS, Hyperledger, Ethereum [Video]

Blockchain: A Digital Revolution The digital revolution in any form is a step forward to make the world a better place to live in. It all started in 1960’s with the development of from manual and analog to a digitalized platform. The most remarkable impact is ‘globalization’ which has led to effective and efficient business productivity. Later when Internet evolved, it was a disruptive, game-changing force for many industries. technology One such invention is the ‘ ’ technology. Invented by a group of engineers in 2008, this digital revolution is not a widely known term. This article explores the Blockchain technology deep within along with knowing some of its uniqueness and features. In addition, you also get to know how the Blockchain wave is the frontrunner in today’s digital world. Blockchain : Understanding the term In a very simplest way, Blockchain is a record book for multiple forms of virtual currencies that circulate in digital transactions. It combines the security of cryptography, stores and transmits the data in a coded form in a ‘peer-to-peer’ network to create a shared database. The block represents the present and ongoing transactions. Every transaction connects to the one before and the one after it, leading to a traceable history of every record. Once a transaction is complete, it’s linked to the chain making it a permanent entity, which neither you can delete or alter. The USP of Blockchain is that anything important can be stored digitally, without needing an equivalent in the real world. This electronic mode of transaction is widely trusted, as everyone in the network has an access to an up-to-date version of the record, keeping the data safe and transparent. Key benefits: : The association of multiple computers connected to the same network creates a new chain. Being an ‘open-source’ model, there is no central authority or a single party which monitors or authorizes any changes in the chain. Decentralization : In the current framework, a P2P transaction is not possible without the assistance of 3rd parties like banks or financial agents. Blockchain technology can revolutionize the process by removing all the ‘assistance’ and making it as easy as sending an e-mail. It saves time and the ‘extra’ service charges which you incur while processing payments. It will be a seismic change to the way the world currently operates. No intermediary : The creation of records is in a chronological and sequential manner. Moreover, following the highest standards of encryption, you can’t get the details or the origin of a transaction in terms of name, identity or address of a person. Reliable and Robust Database Every transaction has a unique digital ID, which makes it reliable for the parties involved. : Since the creation of a new block and for the rest of the period, all parties can view the block. A public log creates with every transaction which is permanent in nature. This minimizes any scope of fraudulent activity. Rigging a particular block is not possible as you require correcting the previous block too. The decentralized pattern creates more transparency in transactions. Transparency : Blockchain saves your time and energy by full access and control of your digital transactions. You can set up your digital wallets within the comforts of your home. Filling up forms, or visiting financial institutions are becoming a thing of the past. User-friendly New wave Of Digital Revolution: New technologies offer great potential in various sectors, but they must adopt the process in a balanced way. The Blockchain is clearly a way of future development. The possibilities of applying this technology to other industries such as healthcare, retail, or real estate have opened great expectations about its use. The Blockchain is a mechanism, which is safe and transparent to carry out operations between two regions and even countries. At the bigger picture, it can assist governments to collect taxes, deliver benefits, issue passports and ensure the integrity of official records and services. Basically, this technology is a step forward to eliminate the traditional way of storing records. Blockchain has the power to enhance entrepreneurship among developed and developing countries by removing the barriers built from embedded bureaucracy and corruption. Now, you have the ability to secure your online privacy by storing your digital footprints and also control the access to it. It will be easier and convenient to fight crime and counterfeiting as every transaction can be independently verified and traced. Apart from financial services, Blockchain is useful in the below areas of work, which will ultimately transform the future: -Commodities -Data management -Diamonds -Digital identity and authorization -Organizational governance -Retail -Social network -Supply chain management -Energy The Challenges ahead: Even though Blockchain has the potential to take digital technology to next level, there are few hiccups initially. Some of the major issues related to this technology are below: : Blockchain is still in the progression stages. New technology There is still a lot of scope for invention and innovation. People need to be educated about the usage in the respective sectors where this technology can do wonders. It will take some time before people shift their focus towards a decentralized technology which is robust and secured. : There are some countries in the world where this technology is not in use or not even known by many. The Government has to promote this innovative and secured platform among the citizens. A regulatory system has to be in place which monitors the progress and help the government in changing the existing structure. Regulatory system : Even though Blockchain technology ensures secure and transparent transactions, in order to make it successful among the people, business houses or at government institutions, issues related to security, privacy, encryption details and personal data have to be more secure and stable. Security issues Conclusion: The 21st century is thriving on the internet and digital revolution, in which Blockchain will play a vital role. It will revolutionize economic transactions; however, it will not change the economy. To simplify things, Blockchain magnifies your capacity and makes the existing standard procedures more efficient. This technology will be a game changer, but it will require all the constituents in the network to participate and agree on the basic principles of the idea. Source: Linkedin post from Varun Shah

Blockchain: A digital revolution

We're running an e-commerce platform, where people publish products and other people purchase those products. Our backend has some highly scalable microservices running on well-designed Lambdas, and there's a lot of caching involved. Our order processing microservice writes to a DynamoDB table. We're using DynamoDB provisioned capacity mode with auto-scaling. We did a great job and everything runs smoothly. Suddenly, someone's product goes viral, and a lot of people rush in to buy it at the same time. Our cache and CDN don't even blink at the traffic, and our well-designed Lambdas scale amazingly fast, but our table is suddenly bombarded with writes and the auto-scaling can't keep up. Our order processing Lambda receives , and when it retries it just makes everything worse. Things crash. Sales are lost. We eventually recover, but those customers are gone. How do we make sure it doesn't happen again? DynamoDB ProvisionedThroughputExceededException is to change the DynamoDB table to On-demand, which can keep up with Lambda when scaling, but it's over 5x more expensive. Option 1 is to make sure the table's write capacity isn't exceeded. Option 2 Let's explore option 2. AWS Services involved: Our database. All you need to know for this post is . DynamoDB: how DynamoDB scales A fully managed message queuing service that enables you to decouple components. Producers like our order processing microservice post to the queue, the queue stores these messages until they're read, and consumers read from the queue in their own time. SQS: An email platform, more similar to services like MailChimp than to an AWS service. If you're already on AWS and you just need to send emails programmatically, it's easy to set up. If you're not on , need more control, or need to send so many emails that price is a factor, you'll need to do some research. For this post, SES is good enough. SES: AWS Content Overview What is Amazon SQS? Types of SQS Queues How to Implement an SQS Queue for DynamoDB Synchronous and Asynchronous Workflows with SQS Best Practices for SQS and DynamoDB What is Amazon SQS? SQS is a fully managed message queuing service. A messaging queue is a data structure where items can be read in the same order as they were written: First-In, First-Out (FIFO). Queues allow us to decouple components by making the consumer (that's the component that reads from the queue) unaware of who wrote the item (the writer is called producer). Additionally, in software architecture we usually focus on another characteristic of queues: The reading of the item can happen sometime after the writing. This lets us decouple producers and consumers in time: Consumers don't need to be available when Producers write to the queue. The queue stores the messages for a certain amount of time, and when Consumers are ready, they the queue for messages and receive the oldest message. poll For our solution, we're going to use a queue so that our order processing microservice can send a message with the order, the queue stores the message, and a consumer can read it at its own rhythm (i.e. at our DynamoDB table's rhythm). Types of SQS Queues There are two types of queues in SQS: queues are the default type of queue. They're cheaper than FIFO queues and nearly infinitely scalable. The tradeoff is that they only guarantee (meaning you might get duplicates), and the order of the messages is mostly respected but not guaranteed. Standard at-least-once delivery queues are more expensive than Standard queues, and they don't scale infinitely, but they guarantee ordered . You need to set the property in the message since FIFO queues only deliver the next message in a MessageGroup after the previous message has been successfully processed. For example, if you set the value of to the customer ID and a customer makes two orders at the same time, the second one to come in won't be processed until the first one is finished processing. It's also important to set , to ensure that if the message gets duplicated upstream, it will be deduplicated at the queue. A FIFO queue will only keep one message per unique value of MessageDeduplicationId. FIFO exactly-once delivery MessageGroupId MessageGroupId MessageDeduplicationId Most people who think of queues are thinking of guaranteed FIFO orders and exactly-once delivery. The only way to actually get those guarantees is with FIFO queues. How to Implement an SQS Queue for DynamoDB Follow these step-by-step instructions to implement an SQS Queue to throttle writes to a DynamoDB table. Replace and with the appropriate values for your account and region. YOUR_ACCOUNT_ID YOUR_REGION Create the Orders Queue Go to the SQS console. Click "Create queue" Choose the "FIFO" queue type (not the default Standard) In the "Queue name" field enter "OrdersQueue" Leave the rest as default Click on "Create queue" Update the Orders service to write to the SQS queue We need to update the code of the Orders service so that it sends the new Order to the Orders Queue, instead of writing to the Orders table. This is what the code looks like: const AWS = require('aws-sdk');
const sqs = new AWS.SQS();
const queueUrl = 'https://sqs.YOUR_REGION.amazonaws.com/YOUR_ACCOUNT_ID/OrdersQueue';

async function processOrder(order) {
  const params = {
    MessageBody: JSON.stringify(order),
    QueueUrl: queueUrl,
    MessageGroupId: order.customerId,
    MessageDeduplicationId: order.id
  };

  try {
    const result = await sqs.sendMessage(params).promise();
    console.log('Order sent to SQS:', result.MessageId);
  } catch (error) {
    console.error('Error sending order to SQS:', error);
  }
} Also, add this policy to the IAM Role of the function, so it can access SQS. Don't forget to delete the permissions to access DynamoDB! {
  "Version": "2012-10-17",
  "Statement": [
    {
      "Effect": "Allow",
      "Action": "sqs:SendMessage",
      "Resource": "arn:aws:sqs:YOUR_REGION:YOUR_ACCOUNT_ID:OrdersQueue"
    }
  ]
} Set up SES to notify the customer via email Open the SES console Click on "Domains" in the left navigation pane Click "Verify a new domain" Follow the on-screen instructions to add the required DNS records for your domain. Alternatively, click on "Email Addresses" and then click the "Verify a new email address" button. Enter the email address you want to verify and click "Verify This Email Address". Check your inbox and click the link. Set up the Order Processing service Go to the Lambda console and create a new Lambda function. Add the following code: const AWS = require('aws-sdk');
const dynamoDB = new AWS.DynamoDB.DocumentClient();
const ses = new AWS.SES();

exports.handler = async (event) => {
    for (const record of event.Records) {
        const order = JSON.parse(record.body);
        await saveOrderToDynamoDB(order);
        await sendEmailNotification(order);
    }
};

async function saveOrderToDynamoDB(order) {
    const params = {
        TableName: 'orders',
        Item: order
    };
    
    try {
        await dynamoDB.put(params).promise();
        console.log(`Order saved: ${order.orderId}`);
    } catch (error) {
        console.error(`Error saving order: ${order.orderId}`, error);
    }
}

async function sendEmailNotification(order) {
    const emailParams = {
        Source: 'you@simpleaws.dev',
        Destination: {
            ToAddresses: [order.customerEmail]
        },
        Message: {
            Subject: {
                Data: 'Your order is ready'
            },
            Body: {
                Text: {
                    Data: `Thank you for your order, ${order.customerName}! Your order #${order.orderId} is now ready.`
                }
            }
        }
    };

    try {
        await ses.sendEmail(emailParams).promise();
        console.log(`Email sent: ${order.orderId}`);
    } catch (error) {
        console.error(`Error sending email for order: ${order.orderId}`, error);
    }
} Also, add the following IAM Policy to the IAM Role of the function, so it can be triggered by SQS and access DynamoDB and SES: {
  "Version": "2012-10-17",
  "Statement": [
    {
      "Effect": "Allow",
      "Action": [
        "sqs:ReceiveMessage",
        "sqs:DeleteMessage",
        "sqs:GetQueueAttributes"
      ],
      "Resource": "arn:aws:sqs:YOUR_REGION:YOUR_ACCOUNT_ID:OrdersQueue"
    },
    {
      "Effect": "Allow",
      "Action": [
        "dynamodb:PutItem",
        "dynamodb:UpdateItem",
        "dynamodb:DeleteItem"
      ],
      "Resource": "arn:aws:dynamodb:YOUR_REGION:YOUR_ACCOUNT_ID:table/Orders"
    },
    {
      "Effect": "Allow",
      "Action": "ses:SendEmail",
      "Resource": "*"
    }
  ]
} Make the Orders Queue trigger the Order Processing service In the Lambda console, go to the Order Processing lambda In the "Function overview" section, click "Add trigger" Click "Select a trigger" and choose "SQS" Select the Orders Queue Set Batch size to 1 Make sure that the "Enable trigger" checkbox is checked Click "Add" Limit concurrent executions of the Order Processing Lambda In the Lambda console, go to the Order Processing lambda Scroll down to the "Concurrency" section Click "Edit" In the "Provisioned Concurrency" section, set "Reserved Concurrency" to 10 Click "Save" Synchronous and Asynchronous Workflows with SQS Architecture-wise, there's one big change in our solution: We've made our workflow ! Let me bring the diagram here. async Before, our Orders service would return the result of the order. From the user's perspective, they , and they see the result on the website. From the system's perspective, we're constrained to either succeed or fail processing the order in the timeout limit of API Gateway (29 seconds). In more practical terms, we're limited by what the user is expecting: we can't just show a "loading" icon for 29 seconds! wait until the order is processed After the change, the website just shows something like "We're processing your order, we'll email you when it's ready". That sets a to the user. That's important for the system, because now we could actually have our Lambda function take 15 minutes, without hitting the 29 seconds limit of API Gateway, or without the user getting angry. It's not just that though, if the Order Processing lambda crashes mid-execution, the SQS queue will make the order available again as a message after the visibility timeout expires, and the Lambda service will invoke our function again with the same order. When the maxReceiveCount limit is reached, the order can be sent to another queue called Dead Letters Queue (DLQ), where we can store failed orders for future reference. We didn't set up a DLQ here, but it's easy enough, and for small and medium-sized systems you can easily set up SNS to send you an email and resolve the issue manually, since the volume shouldn't be particularly large. different expectation Once the order went through all the steps, failed some, retried, succeeded, etc, then we notify the user that their order is "ready". This can look different for different systems, some are just a "we got the money", some ship physical products, some onboard the user to a complex SaaS. For this solution I chose to do it via email because it's easy and common enough, but you could use a webhook and still keep the process async. Best Practices for SQS and DynamoDB Operational Excellence You know how to monitor Lambdas. You can monitor SQS queues as well! An interesting alarm to set here would be number of orders in the queue, so our customers don't wait too long for their orders to be processed. Monitor and set alarms: Be ready for anything to fail, and architect accordingly. Set up a DLQ, set up notifications (to you and to the user) for when things fail, and above all don't lose/corrupt data. Handle errors and retries: We're complicating things a bit (hopefully for a good reason). We can gain better visibility into that complexity by setting up X-Ray. Set up tracing: Security That's all you need to do for an SQS queue to be encrypted at rest: check that box, and pick a KMS key. SQS communicates over HTTPS, so you already have encryption in transit. Check "Enable server-side encryption": The IAM policies in this issue are pretty restrictive. But there's always a nut to tighten, so keep your eyes open. Tighten permissions: Reliability With a FIFO queue, the next message won't be available for processing until the previous one is either processed successfully or dropped (to the DLQ if you set one) after maxReceiveCount attempts. If you don't set these, one corrupted order will block your whole system. Set up maxReceiveCount and a DQL: This is the time that SQS waits without receiving the "success" response, before assuming the message wasn't processed successfully and making it available again for the next consumer. Set a reasonable value, and set the same value as a timeout for your consumer (Order Processing lambda in this case). Set visibility timeout: Performance Efficiency More memory means more money. But it also means faster processing. Going from 30 to 25 seconds won't matter much for a successfully processed order, but if orders are retried 5 times, now it's 25 seconds we're gaining instead of 5. Could be worth it, depending on your customers' expectations. Optimize Lambda function memory: As discussed earlier, you should consider processing messages in batches. Use Batch processing: Cost Optimization Remember that this could be fixed by using our DynamoDB table in On-demand mode. It's 5x more expensive though. Same goes for relational databases (if we use Aurora, then Aurora Serverless is an option). Provisioned vs. On-demand for DynamoDB: In this case, we're trying to get all orders processed relatively fast. If the processing can wait a bit more, an auto scaling group that scales based on the number of messages in the SQS queue can work wonders, for a lot less money. Consider something other than Lambda: Also published here.

Using SQS to Throttle Writes to DynamoDB

Introduction If you are looking at the state of software development you can see that serverless is starting to go mainstream. As complexity grows in software and more integration is introduced to produce a more dynamic and effective application you are bound to need more tooling. In this article, I want to introduce a serverless framework that might make you think again when looking at going serverless. Architect is an opinionated serverless framework that focuses on reducing the complexity of working with multiple AWS cloud services. It prioritizes speed with fast local dev, smart configurable defaults, and flexible infrastructure as code. Architect When you see the config file you should be able to tell what is going on and what resources are available. Architect supports multiple runtimes, but for the sake of simplicity, we will be using Node.js. In this introduction to Architect, we will be building creating a REST endpoint that takes user data converts it into QR code and sends email out using with my url. SES 💡 Please be sure that the email you use for this is example is authorized with SES Prerequisites AWS account Node.js Some cloud knowledge Step 1 First you will have to create a new architect app with the following command, which should create your boilerplate project with an file. app.arc npm init @architect architect-qr-email-service cd architect-qr-email-service Your app.arc file is your configuration files, which will be used to create your resources such as lambdas, database, queues as you can see in the code below. There is not much going on but with time this file will grow with time. Architect takes the complexity of cloud formation, AWS's schema language, and refines it down into a declarative specification. When you look at the app.arc file, you are able to determine exactly what is going on and what resources were created. @app
architect-qr-email-service

@http ## http endpoint get
get /

# @aws
# profile default
# region us-west-1 Step 2 Now that we have a starting point let’s start creating some services. First, we will need a POST endpoint that will take some user data so we can store it for record-keeping. This will not only be your route, but also the name in your directory as that is used by architect to determine what to build for what resource. record-creation Configuration File @app
architect-qr-email-service

@http
post /record-creation ***Folder Structure *** Let’s install some so you can see a bit more tooling from arc, which will help us parse body json and more. architect helper functions npm i @architect/functions -S Now let’s add starter code that will take user data and return a helping message that it is running. let arc = require('@architect/functions')


exports.handler = async function http(req) {

 const body = arc.http.helpers.bodyParser(req)

 if (!body || !body.email, !body.name) {
 return {
 statusCode: 400,
 body: 'Missing user email and or name'
 }
 }


 console.info({ ...body })


 return {
 statusCode: 200,
 headers: {
 'content-type': 'application/json;'
 },
 body: JSON.stringify({
 message: `User Data Received`
 })
 }
} One of the benefits of using architect is the simplicity of running serverless locally as it manages its own sandbox. Just run and if your files and app.arc file is correct should start service running on . Now that that is done just hit the post npm run start http://localhost:3333 The response should look something like this: So let’s take a step back and realize what we just did. We created API gateway locally that pointed to a directory that holds a lambda function called . record-creation Step 3 Now let’s do a bit more with this. We should take advantage of AWS lambda and utilize one of the best tools serverless echo system has to offer queues, which in the AWS world that resource is called . Amazon Simple Queue Service (SQS) This we will be doing Creating two queues functions creating a dynamodb table that takes a index combination of (email and name) You app.arc configuration file will have to be updated to add 2 new queues called and . notification-handler record-handler Now that we have updated the configuration file. We will create a similar file structure, but instead of adding an http directory we will be creating under a queues directory. You can do this manually or run this command will read app.arc file and create all new corresponding files. npx arc init If you look at the app.arc file you will notice that each queue has its own corresponding directory. So directory will handle all record-handler queue events that are published to it. record-handler Let’s modify the so it publishes to a queue . record-creation record-handler let arc = require('@architect/functions')

exports.handler = async function http(req) {
 const body = arc.http.helpers.bodyParser(req)

 if (!body || !body.email || !body.name || !body.twitter) {
 console.error(body, 'Missing user email, name, twitter handle')
 return {
 statusCode: 400,
 body: 'Missing user email and or name'
 }
 }


// publish to the record-handler queue based on our config
 await arc.queues.publish({
 name: 'record-handler',
 payload: { ...body },
 })

 console.info('message published to record-handler')

 return {
 statusCode: 200,
 headers: {
 'content-type': 'application/json;'
 },
 body: JSON.stringify({
 message: `User Data Received`
 })
 }
} Now let’s modify the record handler that will save it to dynamo db and push it to a new queue as this function is only responsible for saving the record. You can see we use @architect/functions , which allows us to connect to dynamo db instance and save events for more on this see arc.codes docs. let arc = require('@architect/functions')

exports.handler = async function queue(event) {
 console.info('incoming message to queue record-handler', event)

 let client = await arc.tables()
 // handle incoming event, which could come in as a array
 await Promise.all(event.Records.map(async record => {
 //save a record for each one and publish new event

 const parsedBody = JSON.parse(record.body)
 const body = { ...parsedBody, id: Math.random() }

 await client.records.put(body)

 await arc.queues.publish({
 name: 'notification-handler',
 payload: body,
 })
 }))

} Now that we are publishing to queue let’s do a little more let’s handle the event and push out an email using aws-sdk , with a qr of your Twitter handle. notification-handler let QRCode = require('qrcode')
let AWS = require('aws-sdk');

exports.handler = async function queue(event) {
 try {
 console.info('incoming message to queue notification-handler', event)
 const AwsSes = new AWS.SES({ apiVersion: '2010-12-01' })

 // handle incoming event, which could come in as a array
 await Promise.all(event.Records.map(async record => {

 //save a record for each one and publish new event
 const parsedBody = JSON.parse(record.body)
 const qrcodeString = `https://twitter.com/${parsedBody.twitter}`

 const base64qr = await new Promise((resolve, _reject) => {
 QRCode.toString(qrcodeString, { type: 'terminal' },
 function (err, QRcode) {
 if (err) return console.error("error occurred")
 // Printing the generated code for your debugging purposes
 console.info(QRcode)
 })

 QRCode.toDataURL(qrcodeString, function (err, code) {
 if (err) return console.error("error occurred")
 resolve(code)
 })
 })


 const sendPromise = await AwsSes.sendEmail({
 Destination: {
 ToAddresses: [
 parsedBody.email,
 ]
 },
 Message: {
 Body: {
 Html: {
 Charset: "UTF-8",
 Data: `<img src="${base64qr}" alt=${parsedBody.twitter} />`
 },
 Text: {
 Charset: "UTF-8",
 Data: qrcodeString
 }
 },
 Subject: {
 Data: 'Architect QR Email Service ' + parsedBody.twitter
 }
 },
 Source: parsedBody.email,
 }).promise();

 console.info("Email Sent", sendPromise)
 }))


 } catch (error) {
 console.error('Failed to handle notification message', error)
 throw new Error('Failed to handle notification message')
 }
} Step 4 Let’s test what we have now locally by running and triggering the same rest endpoint as before your result should be QR code in your terminal and email. num run start I would like to note that the email you use should be authorized in AWS SES for this to work. So any issues go to get this done. here The result in your email should be something like the following Step 5 One additional thing you will need to do is create a custom AWS policy to give you access to SES service. Simply go to IAM in your AWS console and create a policy under SES service so you can manually add the JSON policy. Please name the policy as you will need it to match your custom macro later. ArcSESPolicy {
 "Version": "2012-10-17",
 "Statement": [
 {
 "Effect": "Allow",
 "Action": "ses:*",
 "Resource": "*"
 }
 ]
} What is a macro ? A macro extends the functionality of your architect app with standard CloudFormation. It allows developers to add any resources or modify existing ones extending Architect into the entire AWS ecosystem supported by CloudFormation So for us, we will add a new field in app.arc and add a new directory called macro. In the macro directory add . add-policies.js Configuration File @app
architect-qr-email-service

@http
post /record-creation ## http endpoint that will listen for our rest call

@queues
record-handler ## handle message that is publish by record-creation endpoint and saves it
notification-handler ## triggers email notification

## configuration to create a dynamo db 
@tables 
records
 email *String
 name **String


@macros 
add-policies ## modify your cloudformation during build timeto add SES policy permission File structure add-policies.js code to be added /**
 * Add Managed Policies
 *
 * @param {object} arc - Parsed `app.arc` value
 * @param {object} sam - Generated CloudFormation template
 * @param {string} stage - Deployment target runtime environment 'staging' or 'production'
 * @returns {object} Modified CloudFormation template
 */

module.exports = async function macro(arc, cfn) {
 if (cfn.Resources.Role) {
 const newPolicies = [
 {
 PolicyName: 'ArcSESPolicy', // remember this should match your ses policy
 PolicyDocument: {
 Statement: [
 {
 Effect: 'Allow',
 Action: ['ses:*'],
 Resource: '*',
 },
 ],
 },
 },
 ]
 cfn.Resources.Role.Properties.Policies = [...cfn.Resources.Role.Properties.Policies, ...newPolicies]
 }
 return cfn
} Step 6 Let’s deploy this baby to AWS for that all you have to do is run , which will deploy a QA stack for you. This deploy command reads your app.arc configuration files and creates your cloudformation file that will be used to create all resources. npx arc deploy Once that is completed you can verify all the resources we're created. SQS queues: Lambdas: Dynamo table: API Gateway: Now that we verified all the resources let’s test the url that your deploy script should have produced. Mine looked something like this . https://ka3ube9vj6.execute-api.us-west-2.amazonaws.com With that, I will just trigger gateway with the same route as before of record-creation curl --request POST \
 --url https://ka3ube9vj6.execute-api.us-west-2.amazonaws.com/record-creation \
 --header 'Content-Type: application/json' \
 --data '{
	"email": "martin@gizmodlabs.com",
	"name": "Martin Patino",
	"twitter": "thisguymartin"
}' If everything works correctly you should be getting qrcode email from your aws service same as before. 🛑 If for some reason you do not get a email. This could be do to a error possibly permission reason. I would recommend that you purge your queue with dangling message and debug the issues if not your message will be dangling their until the issue is resolved. . See cloudwatch for logging information Step 7 Once you are done and no longer want the project in your aws account simply run and should delete all resources and dynamodb tables. npx arc destroy --app architect-qr-email-service --force Thank you for joining me on this serverless journey of yours and I hope this gave you a small taste of the power of . Architect Here is the GitHub repo if you require further info: or assistance. https://github.com/thisguymartin/architect-qr-email-service Also published on: https://dev.to/thisguymartin/architect-a-easy-way-to-jump-into-the-serverless-world-285h

How to 'Architect' an Easy Way into the Serverless World

Bitcoin was created in the midst of the 2008 financial crisis, and the economic impacts of the coronavirus pandemic are setting the stage for Bitcoin’s greatest test yet. ( : ) Disclaimer The author works at Ryze Financial The 2008 financial crisis exposed weaknesses in the US banking system. Seemingly indestructible monoliths such as Lehman Brothers and Bear Stearns were taken as casualties. Americans lost $9.8 trillion in wealth. However, an entirely was born as a product of this crisis — : decentralized, deflationary, digitally-native money. The ’08 recession set the stage for Bitcoin’s creation, and the economic impacts of COVID-19 could set the stage for Bitcoin to shine as a hedge against inflation and store of value. new kind of money Bitcoin In an attempt to mitigate the economic repercussions of the coronavirus pandemic, central banks are bailing out industry-leading corporations, small businesses, and individual consumers alike. Governments have announced over $7 trillion in total relief spending, with $2.3 trillion from the US, equivalent to roughly 11.2% of US GDP. A significant portion comes from central banks printing money to buy bonds and other financial instruments. Printing new money to buy bonds, or “quantitative easing (QE),” increases the money supply. In addition, governments are effectively handing out money to their citizens, which may cause inflation even with the US Dollar. Increasing the supply of any asset decreases its value unless demand increases at the same rate. This opens up an opportunity for Bitcoin since its inflation rate will be cut in half as a result of the Bitcoin’s value may rise as a result of this quantitative tightening, while government-backed currencies across the world could lose value due to inflation. May 2020 Bitcoin Halving. The economic impacts of COVID-19 will test two key narratives for Bitcoin: its use as a hedge against inflation and store of value, and its potential to replace government-controlled fiat currencies. Rewind: FDR, Nixon, and Inflation How did we get here in the first place? The story starts in 1913 with the passage of the Federal Reserve Act. This created the Federal Reserve, an independent central bank in charge of monetary policy. The Fed was given control of money supply and interest rates and tasked with the goals of lowering and . In the decades to follow, The Fed didn’t always meet these 3 objectives. unemployment inflation Getting Rid of Gold From 1913–1919, the US Dollar underwent a period of nearly 20% annual inflation. This was a product of vast government spending during WWI and a shortage of resources, which led to high production costs and prices. During WWII, we saw upwards of 13% annual inflation, even with measures in place to freeze wages and prevent inflation. Between the wars, however, the USD underwent periods of massive deflation during the recession of the early ’20s and the Great Depression of the ’30s. These deflationary periods balanced out the inflationary ones, resulting in average annual inflation of ~1% from 1913–1960. A causal element that enabled such rampant government spending was the abandonment of the . Prior to the Great Depression, the US allowed the redemption of any amount of paper money for its value in gold. This enabled large transactions to be completed without the physical transfer of gold bullion. The value of paper money was guaranteed by gold reserves held by governments. gold standard At the start of the Great Depression, depositors didn’t trust financial institutions with their money, so they started hoarding gold to preserve their wealth. In 1933, FDR passed an executive order forcing banks and consumers to give up their gold to the US government in exchange for paper money, effectively eliminating the gold standard. The gold standard discouraged government debt, budget deficits, and inflation. Since then, the Fed has been able to issue money at will, without having to back new money with any real assets. Black Gold & the Nixon Shock Nixon furthered FDR’s actions beyond the domestic sphere in 1971 when he ended international fixed-rate conversions between the dollar and gold. Subsequently, the 1970s were the most recent period of high inflation in the US. Unlike previous periods of high inflation, which were caused by wars, inflation in the ’70s was largely a result of an economic shock. In 1973, an oil embargo enacted by OPEC against the US caused oil prices to quadruple. This increased consumer gas prices, the cost of transporting goods, as well as the cost to manufacture oil-dependent goods such as plastics. As a result, prices across industries went up, causing double-digit inflation. In response to rising prices, demand for goods and services decreased, causing lower utilization and lower revenues for businesses. Faced with lower demand and higher costs, companies were forced to lay off workers. Rising unemployment resulted in lower demand, forcing more layoffs and creating a vicious cycle. The combination of and is called high inflation high unemployment stagflation. To combat stagflation, the Fed initially increased the money supply and lowered interest rates, with the hope of increasing aggregate demand. Higher demand decreased unemployment, but increased prices and cost of living. As a result, unions demanded higher wages, causing higher costs for businesses. Higher labor costs led to layoffs and more unemployment, causing demand to fall again. In response, the Fed continued to increase the money supply and lower interest rates to increase demand, restarting the cycle, and ultimately resulting in runaway inflation and higher and higher unemployment. By ’73, inflation was at 8.8%, and by the end of the decade, it had increased to 14%. Politicians were focused on decreasing unemployment and putting people back to work in order to garner votes. Paul Volcker was appointed chairman of the Fed in 1979, and unlike his Keynesian predecessors, Volcker’s focus was on curbing inflation. He reversed monetary policy and interest rates to as high as 20% and decreased the money supply. This initially led to a massive reduction in demand, and substantial unemployment, causing the recession of ‘81-’82. However, inflation eventually slowed and prices fell, increasing demand and bringing the economy out of stagflation. raised COVID-19: A New Kind of Economic Shock Similar to the ’70s, we find ourselves in an economic shock, this time as a result of a global pandemic as opposed to an oil shortage. Social distancing and other public health measures taken by policy-makers have disrupted the flow of people, goods, and services globally. Disrupted manufacturing and distribution has resulted in a supply shock. This is occurring in tandem with a demand shock caused by consumers being stuck in their homes. As a result, businesses large and small have decreased revenue, and are forced to lay off employees. So far, 33 million Americans are filing for unemployment, nearly 20.5% of the workforce, the highest since 1934. For context, we didn’t see double-digit unemployment during the Great Depression for nearly three years. Investors are in a scramble for cash, causing equities, corporate and other non-government bonds, commodities, and even cryptocurrencies to fall. The Dow Jones Index is down >30% from peak to trough. To mitigate economic damage, central banks have responded in true Keynesian fashion (just as they did in the ’70s) by lowering interest rates and engaging in quantitative easing (QE). QE entails purchasing debt in the form of mortgage-backed securities and Treasury bonds, and printing money for corporate and individual taxpayer bailouts. Interest rates have a lower bound of 0%. Negative interest rates, which have been tested in the last decade by European and Asian countries, can incentivize consumers to pull their money out of commercial banks. Money sitting in savings accounts would have a storage charge as opposed to earning positive interest, incentivizing consumers to hoard physical cash outside of banks. Officials at the Federal Reserve, European Central Bank (ECB), and Bank of Japan (BoJ), among others, agree that we are at a pivotal moment in the history of monetary policy and fiat currency. Interest rates have steadily declined over the last 50 years since Volcker raised the rates. Volcker raised rates when inflation was high. Now, inflation is low and interest rates have reached lower bounds. The Fed must either follow the footsteps of the ECB and BoJ by entering negative interest rate territory or follow the footsteps of Volcker and hike rates to reset the economy. Neither are particularly attractive options, and the government is instead resorting to fiscal stimulus. Money Printers Going “Brrrrr” Over $2.3 Trillion (11% of US GDP) is being printed by the US government and pumped into the economy through the CARES Act. This money is helping expand unemployment benefits, provide one-time checks for consumers, and support SMBs, hospitals, and state/local governments. The funding from the CARES Act comes from the sale of Treasury bonds. Who’s buying $2.3 Trillion in government debt? The Federal Reserve, which has announced unlimited QE to fund the Treasury’s operations. QE generally entails the purchase of Treasury bonds and mortgage-backed securities, but this time, the Fed is following in the footsteps of the ECB and BoJ by also buying up corporate debt. Japan, however, is no stranger to QE. The BoJ first started injecting money into its economy in the early 2000s to fight deflation. Initially, banks were flooded with extra liquidity by the government to encourage lending, and thus, consumer spending. QE in Japan hasn’t resulted in significant inflation, potentially because it was limited to public and private debt markets. This time around, we’re seeing governments issue new money and distribute it directly through individual stimulus payments to consumers. This is more likely to cause inflation than buying treasury or corporate bonds. Bitcoin’s Greatest Opportunity A Hedge Against Inflation Money printing and low interest rates across the world could cause fiat currencies to lose purchasing power as inflation increases. Increasing supply decreases value if demand doesn’t increase at the same rate. In comparison to traditional stores of value such as gold, fiat currencies have lost >80% of their purchasing power in the last decade alone. Traditionally, gold has been a hedge against inflation, and during times of economic crisis, investors flock to assets such as gold to preserve value. Unlike fiat currency, it has limited supply and scarcity. Bitcoin shares both of these properties, as its maximum supply is finite, and it has “unforgeable scarcity” due to the costliness of its creation. Just like gold, new Bitcoin can’t be arbitrarily created as fiat currencies can. Moreover, Bitcoin is becoming more scarce as a result of the , a preprogrammed functionality of the Bitcoin protocol that reduces the rate of supply by 50% roughly every 4 years. Scarcity is not just a function of the current supply, the rate of supply is also a factor. Bitcoin’s annual inflation rate will also decrease to 1.8%, lower than the global average inflation, and lower than the inflation rate of Gold. May 2020 Bitcoin Halving This increase in scarcity can be modeled through or SF, the ratio between the amount of Bitcoin in existence (stock) and the amount that is created each year (flow). SF is used as a fundamental measure of value in precious metals, and was first applied to Bitcoin by pseudonymous analyst Plan B. Gold has the highest SF at 65, and after the 2020 Halving, Bitcoin’s SF will be 58, significantly higher than all precious metals other than gold. stock-to-flow Developing Countries: Weak Central Banks and Bitcoin Adoption Bitcoin’s potential as a store of value could be actualized first in developing nations with weak central banks. A COVID outbreak will devastate 3rd world countries, especially as the Southern Hemisphere heads into winter. Single-product economies such as Venezuela’s may collapse (again), leading to central bank failure and currency devaluation. Central banks in developing countries have a poor track record of curbing inflation. During colonialism, local currencies were pegged to the colonizer’s currency at fixed rates. Post-colonialism, from 1946–1971, money in developing countries was pegged to the US Dollar at fixed rates. This arrangement, known as the Bretton Woods system, fell apart in 1971 after the US abandoned the gold standard. During the ’70s, developing countries faced 3x higher inflation on average than their first-world counterparts. While the US was able to curb its inflation starting in the early ’80s, developing countries have seen average annual inflation of 75.7%. The Bretton Woods system and other post-colonial monetary exchange policies acted as barriers against inflation. The abandonment of the gold standard and collapse of the Bretton Woods system meant that central banks in these developing countries had to curtail inflation on their own. Objectively, most countries have failed miserably. Only a handful of developing nations with central banks haven’t experienced significant currency devaluation. Extreme cases of inflation include the Russian ruble, which is worth 1/4000th of its USD value in 1970, along with Venezuela, Argentina, and Zimbabwe, all of whom have experienced central bank failures. Monetary theorists maintain that “the best thing [developing countries] can do to reverse their poor monetary and economic performance of recent years is to abolish their discretionary central banks and fix their currencies to foreign currencies with relatively good records of low inflation.” Instead of foreign currencies with inflation, central banks in these countries may benefit by fixing their currencies to Bitcoin, the only money in the world. Countries such as Venezuela, Brazil, and Argentina where central banks have failed are already seeing increased Bitcoin adoption. low deflationary Another possible avenue for Bitcoin adoption in developing countries rests on a modification of the Dollar Milkshake Theory, first posited by Brent Johnson, CEO of Santiago Capital. In a nutshell, Johnson purports that liquidity injected into the global financial system will all eventually be sucked into the US Dollar. However, the dollar isn’t globally accessible, as governments impose controls on exchange amounts. Since Bitcoin is more versatile than gold, and more accessible than the dollar, as anyone with a cell phone and internet access can own Bitcoin. Some portion of the liquidity injected into the global economy will find its way into Bitcoin. Looking Back, and Looking Forward COVID-19 has far-reaching economic impacts, and we’re just seeing the tip of the iceberg. The economic shock of the 1970s was, at first, unsuccessfully combated with lower interest rates and increased money supply. It took a whole decade of rampant inflation and unemployment until policymakers enacted contractionary measures and raised interest rates, which ultimately brought stagflation to an end. The coronavirus pandemic has brought on the worst economic shock since the ’70s, and we’re reacting in the same way we initially did 50 years ago. Interest rates are reaching their lower bounds, and trillions of dollars in fiat currency are being created out of thin air. We’ve never pushed the fiat system to this extent, and it’s impossible to predict the long-term repercussions of the actions governments and central banks are taking. As BitMEX CEO Arthur Hayes stated, “Inflation like this has been eradicated from our collective memories. Inflation has been low and stable for over 30 years and politicians and the public are unaware of the risks.” Bitcoin, as a construct outside existing financial systems, poses a potential solution to the fundamental problems with fiat money that have been created over the last 50 years. Its value as a hedge against inflation will shine as it undergoes quantitative tightening as a result of the 3rd Halving in May. We could see adoption in developing countries where central banks are likely to fail or have already failed. Smart-money sees this coming, and institutions are paying more attention to Bitcoin. Grayscale, which provides avenues for institutions to invest in crypto, reports $500M+ in new investment in Q1 2020, more than double the previous record.Bloomberg, in a recent report, commented on Bitcoin’s convergence with gold, furthering its narrative as a store of value. Bitcoin was created in the midst of the 2008 financial crisis, and the economic impacts of the coronavirus pandemic are setting the stage for Bitcoin’s greatest test yet. ( : ) Disclaimer The author works at Ryze

Stories, News & Mentions about RECORDBOOK

Categories

Trending Topics

Stories, News & Mentions about RECORDBOOK

Recordbook’s Stories on HackerNoon

Recordbook's News & Mentions

Categories

Trending Topics