Bitcoin 101
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Bitcoin is a decentralized digital currency that is not controlled by any single entity; the document provides an introduction to Bitcoin including what it is, common misconceptions, how to obtain, use and secure Bitcoin, as well as an overview of how Bitcoin transactions work at a technical level using public/private keys and blockchain technology. The presentation also discusses Bitcoin services for merchants including Coinvoice which allows invoicing in Bitcoin and automatic payouts in BTC or fiat currency.
Bitcoin 101
- 2. Agenda Introduction What is bitcoin? Misconceptions How would I use Bitcoin? How do I get Bitcoin? How do I use Bitcoin? Nuts and bolts Security Security & Risks Questions?
- 3. Introduction Marco Peereboom CTO 20+ years of industry experience Conformal Systems LLC Fanatical privacy advocates with a crypto problem Coinvoice Cyphertite Alternative bitcoin full node implementation
- 4. What is Bitcoin? What is Bitcoin? Bitcoin is a global decentralized digital currency What does that even mean? Decentralized - Not controlled by a single entity such as a central bank, the king, federal reserve etc Digital currency - Internet cash
- 5. Misconceptions Isn’t it illegal? Bitcoin is NOT illegal and there is a growing body of jurisprudence to prove it But bad people use it for bad things! Yes they do and have since the dawn of money Inflationary/Deflationary But it isn’t backed by anything!! Neither is fiat currency. Security Bitcoins are only as secure as your process Anonymous Despite popular belief bitcoin is NOT anonymous
- 6. Why would I use Bitcoin? Tap into an increasingly large economy ~$6B market cap (at $500/btc) Operate world wide without bank accounts Always open, unlike banks No charge backs Lower fees than traditional banking More resilient against identity theft and fraud
- 7. How do I get Bitcoin? Purchase them from a bitcoin exchange Earn them through competitive mining Accept them as payment for goods or services Withdraw from a bitcoin ATM Use a bitcoin payment processor
- 8. How do I use Bitcoin? Digital wallet Bitcoins are stored in digital wallets Spending Send payments globally with minimal fees
- 9. How do I use Bitcoin? Use bitcoin to buy real stuff overstock.com Virgin Atlantic Tiger Direct WordPress Donate to charity Capital Area Food Bank of Texas Investment Stuff them under your digital mattress
- 10. Nuts and bolts Making a payment Obtain an address (email, published on net etc) Send BTC Receiving a payment Give people an address Simple! or is it?
- 11. BobAlice Alice and Bob Message MessageBob public key Alice private key Digest Alice private key Bob private key Alice public key Alice public key Digest Encrypted message Digital signature Hash Hash
- 12. Crypto Currency Letter of intent I, Alice, want to pay Bob 1 bitcoin Digitally sign letter of intent Prevent double spend by adding a serial number to each coin Use public ledger The network is the bank Proof of work Minting bitcoin and obtain fees Incentivizes organizations to maintain network
- 13. Security Many horror stories about theft, mismanagement and bankruptcy etc What you can do? Encrypt everything Cold Storage Multisig Backups backups backups!! Do think about end of life planning
- 14. Risks Volatility Transactions need to settle Amateur hour Easy to lose Government interference Bitcoin is still experimental
- 15. Interested but afraid? Fear not, there is a growing list of options Merchant solutions Payment gateways Consultancy Picking a trusted partner is important Security and privacy concerns Transparent process
- 16. How to use Coinvoice? Sign up! The sign up process only takes a few minutes to complete and requires basic information about your business. We review all account applications and typically approve or deny accounts within 2 business days. Create an invoice! After your account is approved you will be able to add Bitcoin addresses, banking information and customer addresses to your Coinvoice account. Once you have added this information, you can create invoices and send them to your customers. Get paid! Receive your invoice payouts in either BTC or USD: we can handle both options. Coinvoice pays out BTC in 1-5 business days from the date your customer pays their invoice and locks in the BTC/USD rate once funds clear at our bank account.
- 17. Merchant tools API JSON API to pragmatically enter invoices into Coinvoice backend PHP reference implementation that is used by several plugins Plugins Relatively simple to add to new carts/e-commerce solutions Sandbox mode for test and development
- 18. Questions? More information: bitcoin.org Visit a local meet up such as Bitcoin Austin