MAP Bitcoin Workshop

Transcript

2. I’m Ryan Zhou • Second Year student at the University of Melbourne. Studying Finance & Economics. • Bitcoiner since early 2011 (1 BTC was worth about $1 at that time). • Previously built the world’s first margin trading platform for Bitcoin.
3. I’m also the co-founder of CoinJar • Australia’s leading Bitcoin platform. • Transacted A$50 million in spot BTC/AUD exchange during the first 12 months of operation. • Processed over A$160 million worth of digital currency payments outside the traditional banking systems.
4. What’s money? • Store of value • Medium of exchange • Unit of account
5. What’s not-so-great about traditional money? • Counterfeiting (cash) and fraud (electronic) • Risks associated with fractional reserve banking • Difficulty of international money transfer • Clearing speed of electronic payment systems • Cost of electronic transactions
6. What if we have a currency like this? • Counterfeiting (cash) and fraud (electronic) Irreversible payments • Risks associated with fractional reserve banking You control your own money • Difficulty of international money transfer Easy cross-border payments • Clearing speed of electronic payment systems Instant money transfers • Cost of electronic transactions Free to send and free to receive
7. Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Satoshi Nakamoto Bitcoin: A Peer-to-Peer Electronic Cash System
8. How’s Bitcoin different? • It’s decentralised and it runs on a peer-to-peer network • Secured by cryptography • Bitcoin transactions represent part of the global ledger
10. Bitcoin Address 19rbGttFXPZoYAGohgKMkdbtsq9mNr994G or
11. Alice
 1Alice5Kx2Psy Balance: 2.0 BTC Bob
 1BobEr89sDp7 Balance: 0.0 BTC I own 1Alice5Kx2Psy. I want to send 1.2 BTC to 1BobEr89sDp7 and get the 0.8 BTC returned to 1Alice5Kx2Psy.
12. Digital Signatures Signing Function Verification Function M, Private Key SM M, SM , Public Key True/False
13. Alice
 1Alice5Kx2Psy Balance: 2.0 BTC Bob
 1BobEr89sDp7 Balance: 0.0 BTC I own 1Alice5Kx2Psy. I want to send 1.2 BTC to 1BobEr89sDp7 and get the 0.8 BTC returned to 1Alice5Kx2Psy. Signature: 319c3af4fb1ae4a3d57c2a
14. Signed Inputs Outputs Chain of ownership Signed Inputs Outputs Signed Inputs Outputs
15. Alice
 1Alice5Kx2Psy Balance: 2.0 BTC Bob
 1BobEr89sDp7 I own 1Alice5Kx2Psy. I want to send 1.2 BTC to 1BobEr89sDp7 and get the 0.8 BTC returned to 1Alice5Kx2Psy. Signature: 319c3af4fb1ae4a3d57c2a Eve
 1EveB2Agu5aT I own 1Alice5Kx2Psy. I want to send 1.2 BTC to 1EveB2Agu5aT and get the 0.8 BTC returned to 1Alice5Kx2Psy. Signature: 806a39d23ba6258da10371
16. Tx (coinbase) Tx Tx Tx Block Hash Previous Block Hash Nonce Block
17. Hash Hash Function M
 (Arbitrary length) D
 (Fixed length)
18. Hash Hash Function M
 (Arbitrary length) D
 (Fixed length) hello 2cf24dba5fb0a30e 26e83b2ac5b9e29e 1b161e5c1fa7425e 73043362938b9824 hello world b94d27b9934d3e08 a52e52d7da7dabfa c484efe37a5380ee 9088f7ace2efcde9 SHA-256 SHA-256
19. Tx (coinbase) Tx Tx Tx Block Hash Previous Block Hash Nonce Block
20. Proof of Work Hash Function M
 (Arbitrary length) D
 (Fixed length) 0ba58c7525e1f7464ecda540070f6d2e 65ecc70ff937c6b6d3ec2c94341f7ee9 2fb5e226450750096e90ff1fa72ed234 41196e31237e7a59b5f314199a398461 Block 1A
 Nonce = 632562 Block 1B
 Nonce = 632563 Block 1C
 Nonce = 632564 002ff4b134c22cbdad8a1ab7c9932d0b cd4b13ea8632d4cfb74c13088da25fb8
22. Block chain Tx (coinbase) Tx Tx Tx Block Hash Previous Block Hash Nonce Tx (coinbase) Tx Tx Tx Block Hash Previous Block Hash Nonce Tx (coinbase) Tx Tx Tx Block Hash Previous Block Hash Nonce
23. Block chain Block Block Block Block Block Block Main chain Orphaned chain
24. 0 5250000 10500000 15750000 21000000 2009 2021 2033 2045 2057 2069 2081 2093 2105 2117 2129 2141 Bitcoins in Existence
25. Peer-to-Peer network Block Block Block Block Block Block Block Block Alice
 1Alice5Kx2Psy Bob
 1BobEr89sDp7
26. Wallets
30. Buy and Sell Bitcoins
31. Spend Bitcoins
32. Size of Bitcoin economy $6 billion Bitcoin
33. Size of Bitcoin economy $3 trillion Bitcoin M1 of US Dollar Scale: $15 million/px2
34. Q&A
35. Open a CoinJar today and we will give you $5 of bitcoins when you get identified. https://www.coinjar.com/invite