Book Report # 53 – Digital Economy.
Begin: 11/4/2024
Finish: 2/8/2025
Title: Digital Economy
Author: Michael Santos
Prison Professor
Why I choose to Read this book:
Learn about the rapidly evolving digital economy. Understand how business is conducted in the digital economy so I could start my business to generate income. Stay current with new technology and adapt to the changing world.
What I learned from this book:
Digital Economy:
It is a rapidly evolving technology and the topics include: a) cryptocurrency, b) Decentralized Finance (DeFi), c) Smart Contract, d) Blockchain, e) Artificial Intelligence, f) Machine Learning, g) Social Media, h) Influencer Marketing, and i) More. Becoming familiar with digital economy will allow us to participate in the growth. We have to understand the new terminology of the Digital Economy to participate in it.
Cryptocurrency:
A digital currency in which transaction are verified and records maintained by a decentralized system using cryptography, rather than by a controlled authority. Examples of Cryptocurrencies are: Bitcoin, Ethereum, Ripple, Litecoin, FTT and others. FTT is a cryptocurrency, it stand for “FT” FTX Exchange “T” token. Thus FTT is a digital token that belongs to the company FTX. It entitled owners of the token to specific rights. A token is a crypto asset issued and hosted on an existing blockchain infrastructure, as opposed to having its own stand alone blockchain network. Satoshi Nakamoto proposed Bitcoin as a currency based on math,or cryptography verified by a decentralized network. Transactions would be recorded on a public ledger (blockchain). To prevent fraud and ensure every transaction is legitimate they use a system called “Proof of Work (POW)”. This required individuals or miners to use their computer to solve complex puzzles. The first to solve the puzzle would validate the transaction and in return be rewarded with newly minted bitcoin. Bitcoins halving approximately every 4 years. The limit of 21 million Bitcoins.
Crypto Terms:
To learn about the digital economy, we have to broaden or vocabulary.
Altcoins – Alternative cryptocurrencies to Bitcoin, eg. Ethereum, Litecoin, ripple and others. Each Altcoin operates according to its own rules and protocol.
Blockchain – A public ledger of all transactions that have been executed. It’s constantly growing as completed blocks are added to it with a new set of recording.
Decentralized Applications (dApps) – Applications that run on a peer-to-peer network of computers rather than a single computer.
Decentralized Finance (DeFi) – Financial services such as borrowing, lending, or asset trading without the need for a traditional financial intermediary and are instead conducted on a blockchain.
Public Key – It is akin to your bank account number or email address. It’s the address you share with others to receive cryptocurrency.
Private Key – It’s akin to your pin or password, providing the ability to access and manage cryptocurrencies.
Non-Fungible Tokens (NFTs) – A type of cryptographic token on a blockchain that represents a unique asset. They can be used to prove ownership of digital items like artworks or collectible.
Tokenization: The process of converting rights to an asset into a digital token on a blockchain.
Decentralized Finance (DeFi):
Blockchain works similarly to a community shared notebook but in a digital format, it’s a digital ledger. Blockchain is a revolutionary way of keeping records that are transparent, secure and decentralized. Bitcoin’s primarily purpose was storage of value. The Bitcoin blockchain primarily recorded transaction data, serving as a decentralized ledger for currency. Ethereum developed its cryptocurrency for decentralized application (Dapps) and smart contracts. The Cryptocurrency ETH serves as a global , decentralized computing platform. Ethereum’s blockchain not only records transactions but also hosts and execute smart contracts and Dapps and a wide range of applications from Decentralized Finance (DeFi) platforms to Non-Fungible Tokens (NFTs). What makes Ethereum different : smart contracts – they are executed automatically when conditions are met, without the need for a middleman, example – agreement creation, escrow functionality, condition verification – smart contract is programmed to verify if certain conditions are met, transaction completed – the smart contract release the funds, and record of transaction. Ethereum has the ability to mint Non-Fungible Tokens, ideal for digital arts, collectibles and other type of items.
Non-Fungible Tokens (NFTs):
For digital and collectible, NFTs have opened a new frontier for creators and artists to create NFTs:
A) Create Digital Assets – Art or digital files or Audio.
B) Choosing a blockchain and market place – Select a marketplace that supported by Ethereum – based NFTs like OpenSea for a large user base. 1) Create an account with Metamask for digital wallet an it is compatible with OpenSea. Purchase Ethereum from an exchange like Coinbase and transfer some ETH (Ether) to the digital wallet on Metamask to cover the minting and listing fees. 2) Link Metamask wallet to OpenSea, which automatically create an account on OpenSea. 3) Create a new collection of digital art, audio books or collectibles to attract potential buyers. 4) Click “Add New Item” to upload collectible and stats that describe the NFT. Set up royalties for future sales. 5) List NFT for sale, set price choosing to sell at a fixed price or through an auction.
C) Marketing – share listing on Social Media to attract potential buyers.
D) Managing sales and royalties – NFT is transferred to highest bidder or new owner and also receive royalties from future sales.
Altcoins:
Altcoins have emerged, each offering unique functionalities, innovations an solutions to the limitations of Bitcoin.
Digital Wallets:
To participate in the digital economy, we need to have a digital wallet. It stores the public and/or private keys for cryptocurrency transaction.
Public Key – is your account number to receive cryptocurrency.
Private key – is like your Pin number providing the ability to access and manage your cryptocurrencies.
Sending cryptocurrency – the wallet uses the private key to sign transactions, providing the ownership of the related public key. The transaction is broadcast on the network and recorded on the blockchain.
Receiving Cryptocurrency – provide sender with your wallets public address. once the transaction is confirmed by the network, the balance in your wallet is updated.
Metamask- Is a software cryptocurrency wallet used to interact with Ethereum blockchain.
OpenSea – An NFT Marketplace:
To convert a digital manuscript or digital art into a revenue generating product, such as a NFT, we use different types of technology. We need to list the NFT in a marketplace. OpenSea is a leading decentralized marketplace for buying, selling an trading Non-Fungible Tokens (NFTs). It plays a crucial role in the NFT by providing a platform where creators, collectors, and traders can interact. The platform is; a decentralized marketplace; wide range of NFTs; minting platform – provide tools to creators to “mint” new NFTs directly on the platform. Minting is the process of turning digital files into blockchain assets; and smart contracts.
Social Media:
Many types of social medias: YouTube, Facebook, Instagram, Twitter, LinkedIn, TikTok, and others. Social media can be a useful resource for success in the digital economy.
How will this book contribute to my success upon release:
Knowledge of the digital economy is important for me to keep up with the latest development and how to use it to earn a living using digital technology. I will use the knowledge learned to start my business to generate an income stream so I won’t be a charge to society and seamless reintegration to the community.
