Bitcoin Barons

A lightning talk given at HASK about what bitcoin is in terms of the technology and the theory behind why it works.

1.  Speakers Julien, Mike, Evan  This talk is about theory  Not here to sell you something  Not telling you how to get rich Bitcoin Barons
2. What is Bitcoin?  What is currency?  Role of the state  Different types of currency  Gold standard (stored labour)  FIAT system (declared value)
3. What makes something valuable?  Scarcity  Stability  Liquidity  Markets  What someone else is willing to pay  Very situational
4. What’s the inherent value?  What’s the inherent value of FIAT currency?  What’s the inherent value of gold?  What’s a BitCoin’s worth beyond that of a currency?  Do commodities have inherent value?
6. Proof of work  Cryptographic hash (sha256)  Stored computational work, can’t cheat  Hash functions are one way  Because it’s difficult we create scarcity  Difficulty scales with mining power
7. Illustration of hash function John Alice Bob Henry Add up values of characters 47 30 19 70
8. Transferability  Global public ledger  Single signer ledger  Think package management  Enter blockchain  Immutable ledger  hash (last block hash + transactions + nonce)  Looking for a hash that’s numerically smaller than difficulty  Each block stores list of transactions + hash
9. HASH Function HASH < Difficulty Increment NONCE Mining reward Transactions (you pick) NONCE HASH of last block YES NO
10. Peer to peer / decentralization  All prior systems were centralized  How does blockchain solve this?  Byzantine fault tolerance  Competition  Anyone can mine  Mining is done to find nonce
11. What’s a Bitcoin address?  160bit hash of a public key  Specifically RIPEMD-160 of a SHA256 hash  Why do we need pubic/private keys?  Wallets have multiple keys
12. Who created Bitcoin?  No one knows  Reaction to 2008 credit crisis and quantitative easing  A few theories  Is Satoshi Nakamoto here tonight?