Bitcoin 101: The Currency, The Network, The Community
6 likes5,986 views
The document provides a comprehensive introduction to Bitcoin, explaining its nature as a decentralized currency and payment network, alongside its operational principles. It discusses Bitcoin's advantages, including lower transaction fees and secure transactions through a public ledger, while addressing misconceptions and varied perspectives on its value and future. The text also outlines Bitcoin's history, technical details, and potential applications for local economies and beyond, emphasizing its role as a revolutionary payment medium.
![Bitcoin Perspectives
“Bitcoin is a technological
tour de force.
~ Bill Gates, Microsoft Founder
“Bitcoin is the beginning of
something great: a currency
without a government, something
necessary and imperative.”
~Nassim Taleb, Scholar
“Bitcoin is Evil”
~ Paul Krugman, Economist
“A virtual currency scheme”
~ European Central Bank
“I think [each Bitcoin] could
be easily worth $100,000
Chris Dixon, VC with
Andressen Horowitz
"Disruptive to our economy”,
“Ban Bitcoin”, “Well, maybe
it’s ok after all.”
US](https://image.slidesharecdn.com/bitcoin-101-presentation-by-joeyshep-140831164525-phpapp02/85/Bitcoin-101-The-Currency-The-Network-The-Community-13-320.jpg)
Bitcoin 101: The Currency, The Network, The Community
- 1. Bitcoin 101 the currency, the network, the community
- 2. About Me By day, I run Earthsite, a web agency for sustainable brands By night, I’m a Bitcoin enthusiast JoeyShepp.com
- 3. Disclaimer This lecture is not a pitch to invest in bitcoin This information is intended for informational purposes only I am not a licensed financial advisor and this is not investment advice That said, I do hope to inspire you to get involved in the Bitcoin community
- 4. Roadmap What is Bitcoin and how does it work? The currency, the network, the platform. How do you use Bitcoin? For businesses and individuals. What’s next for Bitcoin? The next generation of the Internet. Discussion: How can Bitcoin be used for local economies?
- 6. First, came the Computer Who would want a computer in their home? What would you do with it?
- 7. Then, came the Internet Let anybody publish? It would be total anarchy! Email anybody in the world?
- 8. Now Bitcoin Innovations in the science of cryptology has lead new ways of connecting people in a decentralized network. The foundations of Bitcoin technology is laying the groundwork for a truly equitable global governance platform. “The Internet of Money”
- 10. What is Money? A medium of exchange A unit of account A store of value: Stable supply, durable, securable, stable value Also… widely accepted, recognizable, fungible, divisible, transportable, transferable, hard to counterfeit
- 11. What is Bitcoin?
- 12. Bitcoin Popularity Google Trends and Search Volume
- 13. Bitcoin Perspectives “Bitcoin is a technological tour de force. ~ Bill Gates, Microsoft Founder “Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative.” ~Nassim Taleb, Scholar “Bitcoin is Evil” ~ Paul Krugman, Economist “A virtual currency scheme” ~ European Central Bank “I think [each Bitcoin] could be easily worth $100,000 Chris Dixon, VC with Andressen Horowitz "Disruptive to our economy”, “Ban Bitcoin”, “Well, maybe it’s ok after all.” US
- 14. “It may not be the perfect global currency of the future yet, but it’s the pioneer of a global currency.” ~ Sir Richard Branson Business magnate and investor Virgin Galactic Accepts Bitcoin
- 15. GreenBank Capital Inc. First Public Company to Invest in Bitcoin ! “I believe that Bitcoin is in the early stages of becoming a revolutionary payment medium, and GreenBank intends to be actively involved as a bitcoin incubator and investor.” ! Danny Wettreich CEO of GreenBank
- 17. So, what is Bitcoin? Bitcoin is a decentralized payment network and new kind of currency based on cryptographic innovations.
- 18. How Bitcoin Works Bitcoins are generated by anyone with a Bitcoin Mining application. A certain amount of work is required for each block to be mined. The total amount of Bitcoins is predictable and limited. Bitcoins are stored in a digital wallet, similar to online banking. Transactions are verified by Miners and permanently and anonymously stored on the network. Bitcoin software is Open Source, meaning anybody can review the code. https://bitcoin.org/en/how-it-works
- 19. Bitcoin Advantages Delivered person to person without a bank Much lower fees in transferring money Can be used in any country Account cannot be frozen No prerequisites or arbitrary limits
- 20. What does Bitcoin look like? A 256 bit number of 64 characters (your wallet password) Wallets can be stored as an encrypted file on your computer or a hidden SD Card Online Cloud Storage (requires you trust a company to hold) Cold Storage (store offline to reduce risk of hack) QR Codes & Paper Notes Brain-Wallets (Memorization) Soon: Swipe Cards and Phones 1CC3X2gu58d6wXUWMffpuzN9JAfTUWu4Kj
- 21. The Bitcoin Blockchain A distributed asset ledger shared by all participating in the Bitcoin protocol (Currently near 10,000 “nodes”) A full copy of a block chain contains every transaction ever executed With this information, one can find out how much value belonged to each address at any point in history The Genesis Block was the very first block that started the Blockchain we have today. The Bitcoin Blockchain is currently 16.6gb in size and contains almost $10B USD in value. Animated Visualization
- 22. Deflationary Currency Bitcoin is programmed to have a fixed number of bitcoin (21m) that will ever exist and a fixed rate of releasing those bitcoin: 25 bitcoin created every 10 minutes. Predictable and stable. The theory is that bitcoin will only gain in value over time because of the limited supply and increasing adoption. The last 5 years have proved this albeit a rocky climb. We are used to a world where a Dollar can’t buy what it used to. Infact the US Dollar in inflated over 2275% since 1900. InflationData.com Argentina’s currency currently loses 30% of value per year, a decision made by the central bank. - Wall Street Journal What would a world look like where saving bitcoin made you money rather than loosing it?
- 23. Satoshi Nakamoto Anonymous person or group of people who designed the original Bitcoin and goes by the pseudonym Satoshi Nakamoto. Released the ground-breaking White Paper “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008. The smaller unit of Bitcoin, 1/100,000,000 has been named “Satoshi” in homage. Likely has a lot of Bitcoin, maybe 1,624,250 Bitcoin, or close to a $1 Billion USD.
- 24. Bitcoin History 2008 • Bitcoin.org registered by “Satoshi Nakamoto” • “Bitcoin: A Peer-to-Peer Electronic Cash System” paper posted October • Bitcoin projected registered at Sourceforge 2009 • Satoshi mines “genesis block” of 50 BTC – January • Bitcoin v0.1 released on cryptography@metzdowd.com and Usenet • First bitcoin transaction, #bitcoin-dev on Freenode, v0.2 released 2010 • First offline transaction: 10K BTC for two pizzas • v0.3 announced, Slashdotted, Mt Gox founded – July • First specialized GPU hash miners and pooled mining operations 2011 • Bitcoin takes parity with US dollar. • $31 top of first "bubble", followed by the first price drop • Dec: $2, minimum after few months 2012 • Dec: $13, slowly rising for a year 2013 • Silk Road busted, arrests for money laundering. • November: Bitcoin breaks $1,000 in second bubble • December 2013: Price crashes to $600 2014 • Price fell following the shutdown of MTGOX • Price continued to fall due to a false report regarding Bitcoin ban in China • Now (April) stabilizing at $450
- 25. What gives Bitcoin value? • Intrinsic Values • No or low transaction fees • Anonymous, if you want • Public Ledger (Blockchain) • Platform for future Apps • Adoption and Demand • Limited Supply (21m) • Deflationary Currency Current Bitcoin Price ~$500.00 USD (August 2014) Current Market Capitalization $7 Billion USD Estimated Network Value $400 Billion USD (Winklevoss)
- 26. Bitcoin Legal Status Samples from April, 2014 United States: Tax as Property China: Bank Restrictions Germany: Private Money Wikipedia Thailand: Illegal… Australia: Legal, Tax Guidelines Brazil: Tax as Property
- 27. Using Bitcoin
- 28. Bitcoin Uses Store Value Transact Move Money Limited Supply Lower Fees No or Low Fees Compared to Gold 60,000+ Businesses Accepting International Remittances More Fungible Pseudonymous Pseudonymous No Storage Costs No Chargebacks Circumvent Government Control
- 29. Business Benefits Accepting is free and requires no approval Can be converted immediately into local currency No chargebacks No or low processing fees Open to a global market Trackable for easy and transparent reporting Support the growth of a “people’s money”
- 30. Bitcoin Wallets More secure, but more technical Requires trust, but easier
- 31. Buy Bitcoin Currently, the easiest way to buy bitcoin is through Coinbase. Coinbase is San Francisco based, supported by $25m in VC funding and makes the process as easy as online banking. You simply setup an account and verify your bank can support direct transfer of funds. Then you can purchase bitcoin for the now current exchange rate. Coinbase also works as an online wallet to safely store your bitcoin. In the coming year technologies will advance to make it easier to you to manage your own bitcoin and not have to trust a company. Until then, I trust Coinbase with my coin.
- 32. Bitcoin Exchanges Exchange currency for Bitcoin and Bitcoin for currency. Usually local to nations and currencies. Requires connecting a local bank account to transfer money to. Requires trusting exchange to transact on your behalf
- 33. Support Local Businesses coinmap.org provides a map of local businesses that accept bitcoin. yelp.com just announced that businesses can report if they accept bitcoin. Bitcoin ATMs are popping up everywhere and will soon make it easy to exchange bitcoin for local currency where ever you are.
- 34. Donations Scientific Research: Einsteinium altecoin is dedicated to raising funding for cutting edge scientific research worldwide Natural Disaster: 13 bitcoin ($6,000+) donated in bitcoin Tips: Tip small fractions of bitcoin for good comments or content Political Campaigns: Federal Elections Commission just ruled to allow $100 or less in bitcoin value.
- 35. Retail Shopping Buy “Gyft" Cards with Bitcoin to shop at major retailers including Target, Whole Foods, Amazon, CVS and more. http://www.gyft.com/bitcoin/
- 36. Merchant Services No or low transaction fees No chargebacks No exchange rate risks Easy setup No minimums International payments
- 37. The Future of Bitcoin
- 38. Disruption Category Disrupted Businesses Disrupted Remittance Western Union Digital Payment Paypal, Google, Apple, Amazon Purchasing VISA, Mastercard, American Express, Discover Donations Campaign Finance Soon… Trusts, Property Transfer, Stocks
- 39. AltCoins There are 20+ “altcoins” (alternative bitcoin-inspired) with market caps over $1 million USD. Each vary their technology based on offering different benefits and markets. Because the technology is open source, anybody can launch a new type of “coin”. But the challenge is adoption and that is where Bitcoin is winning.
- 40. Etherium Decentralized Contracts Ethereum can be used to codify, decentralize, secure and trade just about anything: voting, domain names, financial exchanges, crowdfunding, company governance, contracts and agreements of most kind, intellectual property, and even smart property thanks to hardware integration. https://www.ethereum.org/ Crowd fund success: Raised $14 million and still going
- 41. DACs Decentralized Autonomous Communities / Corporations A Distributed Autonomous Community (DAC) is an "entity" without any central point of control, with a certain agenda, business plan, and protocol.
- 42. MaidSafe Decentralized Internet The MaidSafe vision is to replace today's existing server centric and intrusive systems with a fully distributed, safe, secure and private network. A network with no third party being able to intercept, copy, steal, sell or otherwise access the network’s data. http://maidsafe.net/ Crowd fund success: Raised $7 million in 5 hours!
- 43. This Year Investment Interest Regulation Welcomed Reliable Companies ?? Mainstream Adoption ?? Bitcoin ATMs (some) Price Stabilizing ??
- 44. The Future Redefining “local” Developed world leap-frogs traditional banking Integrated with current payment systems DACs
- 45. Conclusion
- 46. Bitcoin Summary Decentralized - No central authority, based on a networked system Anonymous - You control your identity Transparent - Complete transaction history is stored as a public ledger Integrity - Transactions are verified by a distributed network of miners and stored in a distributed network of user nodes Distributed - Network is supported by user’s computers all around the world, cannot be shut down without shutting down the Internet Open - Anybody can participate without permission
- 47. A Human Currency International Currency: Developing world can leapfrogs banks, and developed world will unBank themselves. Decentralized: No central bank or government. Network Effect: The value of the network is greater than the sum of the individuals in the network. Deflationary: Because of the fixed number of bitcoin, value will grow over time. No more printing money to get out of debt crisis. Math Rules: Current Fiat currency is controlled by a central authority. Bitcoin is controlled by consensus through equitable mathematical equations. Beyond Currency: Bitcoin has currency features, but viewing it solely as a currency ignores its more widespread application
- 48. Resources
- 49. Bitcoin Foundation Bitcoin Foundation standardizes, protects and promotes the use of Bitcoin cryptographic money for the benefit of users worldwide. Business and Individual Memberships support Bitcoin development. https://bitcoinfoundation.org/
- 50. Bitcoin Meetup Groups Local groups to meet others interested in Bitcoin Largest groups in: New York, London, Tel Aviv- Yafo, San Francisco, Buenos Aires, Sunnyvale, Toronto and Santa Monica. http://bitcoin.meetup.com/
- 51. Let’s Talk Bitcoin In late April 2013, Adam B. Levine founded Let’s Talk Bitcoin! as a twice weekly audio show along with co-hosts Andreas M. Antonopoulos and Stephanie Murphy, PhD. It has now evolved into a content network of talkshows about Bitcoin. Highly recommended for Bitcoin commentary and discussion. You can subscribe via podcast for free! http://letstalkbitcoin.com/
- 52. Bitcoin News CoinDesk: The Voice of Digital Currency NewsBTC: Bitcoin News Service Bitcoin Magazine: Bitcoin News and Culture
- 53. Bitcoin Discussion Bitcoin Subreddit: Links and Discussion on Bitcoin Bitcoin Talk: Discussion forum about all things Bitcoin.
- 54. Video Lectures Khan Academy: Bitcoin Lectures Udemy: Bitcoin or How I Learned to Stop Worrying and Love Crypto Oditorium University: Introduction to Bitcoins
- 55. Permacredits Permacredits are the first true asset-backed decentralized cryptocurrency, backed by permaculture. When you buy Permacredits you are buying a membership in a global network of Eco resorts, Sustainable living spaces, Permaculture farms, Retreat centers, Eco Developments, Permaculture Design Schools, Vegetables, Apps, and more. Buy them, sell them, trade them, vote with them, get paid with them http://permacredits.com/
- 56. Coinality will work for coins Coinality is a job board where employers and job seekers can connect for job opportunities that pay in digital currencies such as Bitcoin, Litecoin, and yes, even Dogecoin. Jobs range from one-time to full-time and negotiations are handled independently between the two parties. https://coinality.com/
- 57. Discussion How could your business use bitcoin?