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Understanding Blockchain Technology
This document provides an overview of blockchain technology and its significance, particularly in relation to bitcoin. It describes the key concepts of blockchain, how it works, and its advantages over traditional financial systems, including transparency and decentralization. The document also touches on the challenges of the current financial model, the mining process, and the importance of secure wallets for storing cryptocurrency.
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Understanding Blockchain Technology
- 1. The Blockchain - TheTechnology behind Bitcoin Asim Rais Siddiqui
- 2. Blockchain TechnologyOverview Participant Exposure The Technology Behind Bitcoin 4 Key Concepts of Blockchain How Blockchain works Blockchain and Mining Principles Miners Rewards Wallet Agenda
- 3. • A blockchainis a distributed database that maintains a continuously- growing list of records called blocks secured from tampering and revision • The blockchain is a secured protocol enabling peer-to-peer exchanges on a distributed network in a secured, public and non-repudiable way. Blockchain Overview
- 4. How many ofyou: •Have heard of bitcoins? •Own cryptocurrency? •Feel you understand the underlying blockchain technology? •Feel you can summarize for us the benefits of the “trust economy”? •Are involved in projects that involve blockchain technology implementation or related activities? Participant Exposure
- 5. Where It AllStarted Blockchain technology was first introduced in a whitepaper entitled: “Bitcoin: A Peer-to-Peer Electronic Cash System,” by Satoshi Nakamoto in 2008. • No reliance on trust • Digital signatures • Peer-to-peer network • Proof-of-work • Public history of transactions • Honest, independent nodes control majority of CPU computing power • Rules and incentives enforced through consensus mechanism https://bitcoin.org/bitcoin.pdf
- 6. The Technology BehindBitcoin • Think of Bitcoin as an electronic asset (as well as a digital currency) • A network of computers keeps track of Bitcoin payments, and adds them to an ever-growing list of all the Bitcoin payments that have been made, called “The Bitcoin Blockchain” • The file that contains data about all the Bitcoin transactions is often called a “ledger” • Bitcoin value is created through transaction processing, referred to as “mining,” which is performed by distributed processors called “nodes” of the peer-to-peer network A Gentle Introduction to Bitcoin by Antony Lewis, https://bravenewcoin.com/assets/Reference-Papers/A- Gentle-Introduction/A-Gentle-Introduction-To-Bitcoin-WEB.pdf
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- 8. • The financialsystem is opaque and lacks transparency and fairness. • All these intermediates are no volunteers. They work for money and get paid for their services. - The transaction costs money to both the buyer and the seller. - There are interest rates, fees, surcharges, etc. - EFTs in Europe can cost 25 euros. - Credit transactions can cost several percent of the transaction. • All these exchanges are error prone. - Credit card informations are often stolen. - Banks make mistakes. • An account holder is eventually not even the actual owner of his account. - The bank really owns the account. - Funds can be garnished, even frozen completely. - Banks and other payment processors like PayPal, Visa, and Mastercard may refuse to process payments for certain legal entities. • Financial exchanges are slow. - Checking and low cost wire services take days to complete. The problems with this model The problem with this model
- 11. Distributed Ledger insteadof Centralized Ledger
- 12. • The blockchainnetwork is a peer-to-peer network of independent nodes communicating together by message broadcasting. • A node is not necessarily connected to every other node, but at least some of them.
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- 15. 4 Key Conceptsof Blockchain
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- 19. • A walletis basically the Bitcoin equivalent of a bank account. It allows you to receive bitcoins, store them, and then send them to others. - The name "Bitcoin wallet" is a bit of a misnomer. Bitcoin wallets don't hold actual Bitcoins, those are essentially stored on the blockchain. - Instead, Bitcoin wallets hold the private keys that give users the right to use those coins. - Each Bitcoin wallet comes with at least two keys : one public, and one private. • A Bitcoin address, or simply address, is an identifier of 26-35 alphanumeric characters, beginning with the number 1 or 3, that represents a possible destination for a bitcoin payment. - Addresses can be generated at no cost by any user of Bitcoin. Bitcoin Wallet
- 20. • Purchase custommining hardware • Obtain a bitcoin wallet • Secure your wallet • Decide between joining a pool or going alone • Download a mining program • Keep an eye on temperatures • Check your profitability. How to Mine Bitcoins
- 21. Value of blockchaintechnology
- 22. • Bitcoin isa form of digital currency. • No one controls it, it is a decentralized currency, which means that no • big bank or institution can get a hold of your money. • It is the very first form of a growing category of money called cryptocurrency, created in 2009. Bitcoin, what is it?
- 23. Value of Bitcoinsince its creation (2009-2017)
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Editor's Notes
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