Let's talk about Bitcoin and our future

My slide as a discussion during monthly meeting of Die Linke Lag Netzpolitik members

Transcript

1. Let’s Talk About Bitcoin and Our Future
2. Value
3. Objective • Labor value • Exchange value • Monetary value • Power value Subjective • Value depends on the consumer
4. Supply & Demand
5. Money “...a medium of exchange “ ...represents value
6. Money Creation and Regulation
7. A very simple magic
8. Money cycle
9. Central Banks Cons: • Monopoly • Quis custodiet ipsos custodes?
10. Commercial Banks One mission: Make money is loaned into life.
11. Digital Money
12. Bitcoin is not about digital money
13. We already use digital money without Bitcoin
14. Zahlungsdiensteaufsichtsgesetz
15. E-money: is created by commercial banks by issuing new loans
16. Commercial banks actively in - Inflation - Deflation war - Risk management for loans; high interest rate for the poor, low interest rate for the rich - Decision of the amount of money going to be created
17. • Commercial banks are commercial and can be “selfish” • Central banks create a monopoly on money control
18. There is a need of money system that is not centralised and can be used without depending any commercial entity
19. Bitcoin A distributed system that uses blockchain to implement decentralized ledger for payments
20. Distributed Systems “a collection of independent computers that appears to its users as a coherent system.” - Tanenbaum and Steen There are multiple heterogeneous components communicating with each other, but from a user’s point of view it is a single system. So like the internet
21. Decentralised Distributed systems ⊆ Decentralised Systems Decentralized means that there is no single point where the decision is made. Every node makes a decision for its own behaviour, and the resulting system behaviour is the aggregated response This means no central company or person owns the system, everyone can use it and make it run. This will make that difficult* for any person to take down the network or to corrupt. * But not impossible
22. Decentralised Ledger
23. Decentralised Ledger The ledger is decentralised in Bitcoin. You can download entire chain into your hard drive. It is around 212 GB as today, September 2018
24. Decentralised Ledger Also means anybody can see all the transactions and wallet balances.
25. All the users = The bank
26. Blockchain Blockchain is a design concept for a growing list of records, called blocks, which are linked using cryptography. It guarantees immutable data chain. Bitcoin uses blockchain, and stores the blockchain data across a network of computers, making them not only decentralised but also distributed. The blockchain is public in Bitcoin. In a way Blockchain provides an open decentralised database, of every transaction.
27. Blockchain
28. How it works?
29. End Users The design is suitable that anybody can use Bitcoin without any 3rd party services. But End users tend to use 3rd party services because the recommended way of using a Bitcoin wallet can be complex or time consuming for the end users.
30. Traders Trading is the backbone of every economic model. In Bitcoin field traders are the worst but also necessary to create volume. People are buying houses, cars, foods with bitcoin but currently it is not enough to create a meaningful volume without cryptocurrency traders. A trader’s perspective : “get rich quick and then get out before the bubble bursts”
31. “Coin” Generation Miners in the centre of this system. Miners are devices that are responsible to verify every transaction that is broadcasted to the network. The transactions are verified by miners and miners get rewarded with new coins by creating new blocks.
32. A Mining Farm CPU -> GPU -> ASIC A small mining farm which runs graphic cards
33. Mining Centralisation
34. The Future
35. Problems • Not scalable ◦ In case of demand increase, Bitcoin ecosystem can not handle it with the current situation • Slow, 7 transaction per second. • Limited amount of total bitcoin ◦ There can be only 21 million bitcoin in the ecosystem ◦ This will prevent inflation but also cause some dramatic changes when the time comes and miners can not mine or do not want to mine. The future is not clear. • New concept of money = possible scammers for end users • People are trying to solve the problems by new experimental solutions, like Lightning network to increase speed. There is no mainstream adoption.
36. Bitcoin is the first bike
37. Bitcoin is the first bike So the development of bitcoin is like bike design development. Listen to the users, add new features, improve.
38. Bitcoin is the first bike But we are still in this phase
39. Questions to humanity
40. What was the problem with fiat money? Is there a problem with the current fiat money or fiat e-money? Why are we searching for a new* kind of money and economic model? * It is not new. The philosophy behind the economic model was already defined by Kropotkin. Mutual aid and voluntary association.
41. A nightmare for capitalism or just an utopia? Do we want to change the capitalist economic models? Can we do it by adopting and implementing a decentralised money system?
42. Can cryptocurrencies be banned? In terms of regulations, yes. But technically no. As long as you have computers or equivalent devices you can create a micro economy based on a cryptocurrency. Like a local network that you are able to create without any third-party institutions.
43. Can a government regulates its own cryptocurrency? Yes. Come countries are experimenting, they also have central bank for their cryptocurrency. A cryptocurrency can be also centralised. But that will not be called Bitcoin. Ripple is already in the market and adopted by many of the banks. It is designed to be private and centralised cryptocurrency.
44. The main question Do we need central institutions to for exchange?
45. Thanks http://hasantayyar.net @htayyar
46. Credits I usually find most of the images for my slides from Unsplash. They offer usage of the images on their platform free. • https://unsplash.com/photos/qaUMOLJwb48 • https://unsplash.com/photos/0G8M3LVT5Ds • The od, ledger picture : http://www.http://www.horniman.info/DOCUMNTS/HOWTO.HTM.com/captain-kenneth-g-smiths-wwii-logbook.html • Small minig farm: http://www.archajaindia.com/marketcap-ico/lost-and-found-bitcoin-ethereum-farm-mining/