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Bitcoin & the Blockchain—an Introduction
The document serves as an introduction to Bitcoin and the blockchain, explaining Bitcoin as a consensual currency supported by community belief, rather than a physical coin. It discusses how Bitcoin operates through a decentralized ledger system known as the blockchain, which ensures secure transactions without the need for banks or governments. The paper also touches on the broader applications of blockchain technology beyond Bitcoin, such as smart contracts and asset transfers.
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Bitcoin & the Blockchain—an Introduction
- 1. Transcript Bitcoin & theBlockchain An Introduction by Christopher Allen <ChristopherA@LifeWithAlacrity.com> June 6, 2015 1
- 2. Hidden Transcript What isBitcoin? 2 Is it a coin?
- 3. Hidden Transcript What isBitcoin? 3 Is it a coin?
- 4. Hidden Transcript What isBitcoin? 4 Is it a coin? Is it a commodity?
- 5. Hidden Transcript What isBitcoin? 5 Is it a coin? Is it a commodity?
- 6. Hidden Transcript So whatis Bitcoin? 6
- 7. Hidden Transcript So whatis Bitcoin? 7 Bitcoin is a consensual fantasy!
- 8. Hidden Transcript So whatis Bitcoin? 8 But so is this!
- 9. Hidden Transcript So whatis Bitcoin? 9 Both are a consensual reality!
- 10. Hidden Transcript This paperis currency because someone stands behind it… 10
- 11. Hidden Transcript A community,a consensus of people, decided to believe in it 11
- 12. Hidden Transcript These bitsare currency because someone bought a pizza… 12 May 22nd 2010, one pizza for 10,000 BTC ($2,249,000 today)
- 13. Hidden Transcript A community,a consensus of people, came to believe in Bitcoin 13 May 22nd 2010, one pizza for 10,000 BTC ($2,249,000 today)
- 14. Hidden Transcript …and Bitcoinhas been a currency ever since. 14
- 15. Hidden Transcript Before therewas currency ancient cultures could only barter 15
- 16. Hidden Transcript But youcould only barter if someone wanted your goods 16
- 17. Hidden Transcript The inventionof currency allowed trade across distance and time 17 North America The Mediterranean
- 18. Hidden Transcript These currencieswere hard to obtain or duplicate 18 North America The Mediterranean
- 19. Hidden Transcript So whatprevents Bitcoin from being duplicated? 19
- 20. Hidden Transcript You can't,because the secret of Bitcoin is… 20
- 21. Hidden Transcript …there isno such thing as a Bitcoin! 21
- 22. Hidden Transcript The secretof Bitcoin is that it is really only ledger! 22
- 23. Hidden Transcript Ledgers arealmost as old as currency 23
- 24. Hidden Transcript But inthe 14th-century: Double Entry Accounting! 24
- 25. Hidden Transcript Invented in2008: The Blockchain Ledger! 25
- 26. Hidden Transcript Bitcoins don'texist, because they are just a balance 26
- 27. Hidden Transcript In aledger, all debits must equal credits 27 Debits Credits -25 +25 -100 +70 +30
- 28. Hidden Transcript If everythingmust balance, where does the first credit come from? 28 Debits Credits -25 +25 -100 +70 +30
- 29. Hidden Transcript via aTetris-like puzzle game called mining 29
- 30. Hidden Transcript There isa winner every 10 minutes… 30
- 31. Hidden Transcript …and thepuzzle gets harder every two weeks 31
- 32. Hidden Transcript This gameincentives 5698 players to keep fair copies of the ledger 32
- 33. Hidden Transcript Redundantly, allover the world. 33
- 34. Hidden Transcript There isno center, no controls them—there is no “One ring to rule them all” 34
- 35. Hidden Transcript Instead, wehave have achieved a consensus, about a consensual currency, where no one can cheat, and everyone can participate. 35
- 36. Transcript But the Blockchainis not only for Bitcoin… •Self-auditing books •Shares of other kinds of assets (stocks, commodities, etc.) •Financial instruments and insurance •Smart contracts •These consensus techniques can also be used for many other things. Bitcoin is only the first app of the Blockchain 36
- 37. Hidden Transcript In someways, Bitcoin is like this bank of lockers 37
- 38. Each locker has… •An identifyingnumber •A slot that money can be put in •A window to see inside •A lock that requires a key Hidden Transcript 38
- 39. •These lockers are secure •Thewindows are unbreakable •The metal can't be cut •All the lockers are bolted to the ground •There are almost an infinite number of lockers Hidden Transcript 39
- 40. •The lockers arein a public place •Anyone may see what is inside any locker •Anyone can put money in a locker •Anyone can see the identifying number, but not who owns it Hidden Transcript 40
- 41. •Each locker isfree of charge •Anyone may claim an unused locker, for which they get a key •You may have as lockers as you choose •The keys are unforgeable Hidden Transcript 41
- 42. •You many onlyopen the locker with the key •Once you open a locker, you take out the money and throw away the key (the lockers are free!) •If you loose the key, the money is locked away forever Hidden Transcript 42
- 43. •Transactions can be donewithout people meeting in person •No banks or governments are involved •Anyone peeking can only know that a transaction was made Hidden Transcript 43
- 44. •As of today,there Bitcoins worth $3,373,831,169 in the lockers •Today, over 130,000 lockers transfered money •There are currently 5687 people guarding these lockers Hidden Transcript 44
- 45.