Finance

Stanford Physicist Finds That Bitcoin Transactions Mirror the Laws of Nature

Stanford Physicist Finds That Bitcoin Transactions Mirror the Laws of Nature

In the wake of Bitcoin’s meteoric rise in popularity, interest in the dynamics of Bitcoin and other cryptocurrencies has skyrocketed over the past year. With bank-based blockchain projects poised to revolutionize the world of financial services, researchers continue to study the new technology to better understand the inner-workings of the blockchain, as well its economic, social, and technological implications.

One such researcher from Stanford University recently uncovered a parallel between cryptocurrency transactions and the structure of swirling liquid that may help develop more advanced digital security, help validate precise procedures used in drug development, and even further our understanding of physical processes in nature.

In a study published Monday in Proceedings of the National Academy of Sciences, Stanford applied physics doctoral student William Gilpin explains how swirling liquids like coffee follow the same principles as cryptocurrency transactions. Cryptocurrency transactions are encrypted through a complex mathematical function called a cryptographic hash. Hash functions work by “mathematically transform[ing] digital information into a unique output that disguises the input. Hash functions are deliberately designed to be complex, but they also remain consistent so that the same input always produces the same output. However, two similar inputs will likely produce very different outputs.

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