Dom & Tom Presents: The Basics of Cryptocurrency & Blockchain

FEBRUARY2018
LUNCH & LEARN 
SERIES 1
THE BASICS OF
CRYPTOCURRENCY  
& BLOCKCHAIN
An Introduction to What They Are, Why They Exist,
and How They Could Change the Future.

Co-Founder & CEO of Dom & Tom
@domtancredi@dtancredi
DOMINIC TANCREDI
2012
Got involved in the cryptocurrency space.Got involved in the cryptocurrency space
Started with Bitcoin at $30  
and it quickly dropped to $7
Currently consulting and advising in the
Cryptocurrency and Blockchain spaces
Began mining
with an ASIC
machine from
Butterﬂy Labs
2018
DOM & TOM INC DOMANDTOM.COM NEW YORK: 646 741 5049 / CHICAGO: 773 377 5585 / LOS ANGELES: 323 510 2696

THEBASICSOFCRYPTOCURRENCY&BLOCKCHAIN
WHAT IS
CRYPTOCURRENCY?

Cryptocurrency is a digital or virtual currency designed to
work as a medium of exchange. It uses cryptography to secure
and verify transactions as well as to control the creation of new
units of a particular cryptocurrency. Essentially, cryptocurrencies
are limited entries in a database that no one can change unless
speciﬁc conditions are fulﬁlled.1

E-currency at
participating
retailers.
Close but no
cyberbuck.
"Oldest, safest and
most popular…”3
90’S TECH BOOM
The virtual gift
certiﬁcate.2

SATOSHI NAKAMOTO
Satoshi Nakamoto Introduced Bitcoin
“A lot of people automatically dismiss e-
currency as a lost cause because of all the
companies that failed since the 1990’s. I
hope it’s obvious it was only the centrally
controlled nature of those systems that
doomed them. I think this is the first time
we’re trying a decentralized, non-trust-based
system.”
“ “
Satoshi Nakamoto, Founder of Bitcoin4
2009

SILK ROAD
» Known as the “eBay for illegal drugs”
» First online black market on the dark web.
» Online users were able to browse and
purchase drugs anonymously and without
trafﬁc monitoring.
» In 2013 the FBI shut down the website and
arrested the Founder Ross William Ulbricbht
who is now serving life in prison without the
possibility of parole.
» It has been reported that the FBI claimed the
proceeds from the sale of 144,000 bitcoins,
valued at just over $1.44 Billion at today’s price
Image Screenshot from TechRepublic.com: “How the founder of the Silk Road made millions on
his illegal startup on the Dark Web”5

Bitcoin is a technological tour de force.
“Bill Gates, Co-founder of Microsoft
TYPES OF
CRYPTOCURRENCIES
Bitcoin 
(34.8% Dominance)
 
Ethereum
Ripple
Litecoin
Dogecoin
Data and screenshot from Feb. 13, 2018 from CoinMarketCap.com
Cryptocurrencies: 1528
Markets: 8697
Market Cap: $423,292,094,493
24h Vol: $17,468,489,888
BTC Dominance: 34.8%

HOW DOES  
IT WORK?

Every ten minutes or so mining computers collect a few hundred
pending bitcoin transactions (a “block”) and turn them into a
mathematical puzzle. The ﬁrst miner to ﬁnd the solution announces
it to others on the network. The other miners then check whether the
sender of the funds has the right to spend the money, and whether the
solution to the puzzle is correct. If enough of them grant their approval,
the block is cryptographically added to the ledger, and the miners
move on to the next set of transactions (hence the term “blockchain”).7

MINERS
TRANSACTION
TRANSACTION
RIGHT HASH
REWARD
BITCOINMINERS PC
MINING
» Mining is a validation of transactions and miners
compile recent transactions into “blocks.”
» Anyone with access to the internet can be a miner.
» You must use the latest approved software, CPUs,
GPUs, and ASICs hardware.
» Miners try to solve puzzles ﬁrst to place the next
block on the blockchain and claim a reward.
» Rewards incentivize mining with transaction fees
and newly released cryptocurrency.
» You can mine in a pool which is a pooling of
resources which share the processing power over a
network to split the reward.

» An exchange is a business (usually a
website) where you can buy, sell or
trade cryptocurrencies.
» As a rule, you should only have on your
exchange what you’re willing to trade.
» BE MINDFUL of the reputation, fees,
veriﬁcation requirements, restrictions
and exchange rates.
» Coinbase, Kraken, Gemini, and Binance
are some of the top exchanges.
EXCHANGES THREE TYPES OF
EXCHANGES
Marketplace Platform: Third-party platform
where buyers and sellers connect and the
platform takes a fee for each transaction.
Direct Trading: Person-to-Person trading
where each seller sets their rate.
OTC Trading: Over-the-counter, a.k.a. Broker
Trading is good for someone new or someone
looking to buy small amounts.

WALLETS
Cryptocurrency wallets are software programs
that store public and private keys and enable
users to send and receive digital currency and
monitor their balance.
TYPES OF WALLETS
Desktop: Only accessible from one computer
and are very secure.
Cloud-Based: Run on the cloud and are
accessible from any device, anytime,
anywhere.
Mobile: Run an app on your phone and can
be used anywhere.
Hardware: Stored offline but make
transactions online and are compatible with
several web interfaces.
Paper: A printout or physical copy of your
public and private keys or software that
generates a pair of keys that are then printed.
Public Key vs. Private Key
A private key is confidential to it’s
owner and can be used to
decrypt messages encrypted
with a matching public key.
A public key is accessible to
everyone via a public repository
or directory and is only used to
encrypt messages not decrypt.

WHAT IS
BLOCKCHAIN?

A blockchain is a continuously growing list of records, called blocks,
which are linked and secured using cryptography. Each block
typically contains a cryptographic hash of the previous block, a
timestamp and transaction data. By design, a blockchain is inherently
resistant to modification of the data. It is "an open, distributed ledger
that can record transactions between two parties efficiently and in a
verifiable and permanent way". For use as a distributed ledger, a
blockchain is typically managed by a peer-to-peer network
collectively adhering to a protocol for validating new blocks. Once
recorded, the data in any given block cannot be altered retroactively
without the alteration of all subsequent blocks, which requires collusion
of the network majority.8
BLOCKCHAIN

An example implementation of a Blockchain is a cryptocurrency
blockchain which is a digitized, decentralized, public ledger of all
cryptocurrency transactions. Constantly growing as 'completed'
blocks (the most recent transactions) are recorded and added to it in
chronological order, it allows market participants to keep track of
digital currency transactions without central record keeping.9
CRYPTOCURRENCY
BLOCKCHAIN

THE BASICS
A secure public
electronic ledger.
A decentralized
database.
Can only be updated by consensus
between multiple people
in the system.
New data can never
be erased.
The Internet
of Value.
The Napster of
databases.
Highly volatile
and experimental

Imagine a technology that could preserve our freedom to
choose for ourselves and our families, to express these choices
in the world, and to control our own destiny, no matter where
we lived or were born. What new tools and new jobs could we
create with those capabilities? What new business and services?
How should we think about the opportunities? The answers
were right in front of us, compliments of Satoshi Nakamoto. 10
Don Tapscott and Alex Tapscott
“ “

Transaction Request Broadcast to Network
Information gets added as “block” on the existing blockchainTransaction Approves
Network Veriﬁes &  
Records Transaction
THE PROCESS

WHY IS IT
IMPORTANT?

Had we over-regulated the Internet early on, we would have missed
out on many innovations that we can’t imagine living without today.
The same is true for the Blockchain. Disruptive technologies
rarely fit neatly into existing regulatory considerations, but rigid
regulatory frameworks have repeatedly stifled innovation. It’s likely
that innovations in the Blockchain will outpace policy, let’s not
slow it down.11

USEFUL FOR
Fund Transfers
Trading
Voting
Healthcare
Fractional Ownerships
Smart Contracts
NOT USEFUL FOR
Centralization
High Volume and Low Value
Transactions
Big Data Storage
Privacy (SSN’s)
Email
Impermanent Things  
(actions that show up and then disappear)
TMP

THE BENEFITS
Decentralization
Increased Transparency
Immutability
Ensure Security on Network
and Hardware
Protect Against Data Changes
Cutdown Corruption
Improve Social Systems Worldwide
Synchronization

» Works in cryptography and
distributed systems.
» Primary innovation is in
sidechains.
» Accelerating the development
of open asset and Smart
Contract technology.
» C-lightening implementation
is the go-to code and
speciﬁcation for enterprise
Lightening Network
deployments on Bitcoin.
» Open source P2P money.
» Controlled by all Bitcoin users
around the world.
» The mining power of Bitcoin’s
network is 300 times more
powerful than the world’s top
5 supercomputers combined.
» There will only ever be 21
million Bitcoins.
BLOCKCHAIN SUCCESSES
» Immutable ledger for diamond
ownership.
» Tracks and protects items of
value.
» Uses the best of blockchain,
smart contracts, and machine
vision.
» Assists in the reduction of risk
and fraud for banks, insurers,
and open marketplaces.
» Has placed over 1.6M
diamonds on the blockchain.
» Open-source, public,
blockchain-based computing
platform and operating system
featuring smart contract
functionality.
» EthereumWallet a gateway to
decentralized applications on
the Etherum blockchain.
» CryptoKitties is a game where
users breed and trade digital
kitties using Etherum-based
smart contracts.
» Upgrade to a 'proof of stake'
system will make everything
faster and cheaper as the
network grows.

THE FUTURE  
OF CRYPTOCURRENCY
& BLOCKCHAIN

Blockchain is a foundational technology. It has the potential to
create new infrastructures for our economic and social systems.
While the impact will be enormous, it could take decades for
blockchain to seep into our economic and social system. The
process of adoption will be gradual and steady, not sudden, as
waves of technological and institutional change gain
momentum.12

Blockchain will disrupt the banking and
financial industry first.
Other industries will adopt after
(publishing, media, governance, gaming).
There will be significant investment from
today’s tech giants.
Hyperledger will be the foundation for
industry-wide blockchain adoption and
implementation.
Micro-transactions between machines
will become commonplace (IoT meets
Smart Contracts).
We will need to find ways to safeguard
personal and illegal data that has
become publicly accessible.
Environmental concerns13 will have to be
addressed to support the algorithms that
the miners use.
»
»
»
»
»
»
»
SOCIETAL ADOPTION PREDICTIONS

HOW TO  
GET INVOLVED
Go to a local Meetup.
Buy and spend some
cryptocurrency and experience
it for yourself.
Concept a Dapp  
(Decentralized App).
»
»
»
There’s two kinds of people in
the #cryptocurrency space. The
ﬁrst believe in the technology of
utilization. The second believe in
asset management. Short term
versus long term.
“
“
Dom Tancredi,  

RESOURCES TO LEARN MORE
» RBC Capital Markets: Crypto Currency & Blockchain Technology: A Decentralized Future
» Blockgeeks: The History of Bitcoin
» Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto White Paper
» WeUseCoins: What is Bitcoin? (v2)
» PWC: Making sense of bitcoin, cryptocurrency, and blockchain
» Mahesh Murthy: Full Stack Hello World Voting Ethereal Dapp Tutorial - Part 1
» Ethereum: Dapps for Beginners

APPENDIX

REFERENCE MATERIALS
1. Bitcoin 101. (n.d.) What is Cryptocurrency. Guide for Beginners. Retrieved from https://cointelegraph.com/bitcoin-for-beginners/what-are-cryptocurrencies
2. Higgins, Stan. (2014, Nov. 30). 3 Pre-Bitcoin Virtual Currencies That Bit the Dust. Retrieved from https://www.coindesk.com/3-pre-bitcoin-virtual-currencies-
bit-dust/
3. Buntinx, J. (2016, May 7). Liberty Reserve Creator Sentenced to 20 Years in Jail Time. Retrieved from https://news.bitcoin.com/liberty-reserve-creator-jail-
time/
4. CoinedBits. (n.d.) Bitcoin Time Magazine Book Cover, Founder Satoshi Nakatomo. [Photograph]. Retrieved from https://www.amazon.com/CoinedBits-Time-
Magazine-Satoshi-Nakamoto/dp/B019958F80
5. Reese H. (2017, May 10). How the founder of the Silk Road made millions on his illegal startup on the Dark Web. Image Screenshot from the Silk Road.
[Photograph]. Retrieved from https://www.techrepublic.com/article/how-online-marketplace-silk-road-became-the-craigslist-for-illegal-drugs/
6. Coin Market Cap. (2018, Feb. 13). Cryptocurrency Market Capitalizations. Image Screenshot [Photograph]. Retrieved from https://coinmarketcap.com/
7. L.S. (2015, Jan. 20). How bitcoin mining works. Retrieved from https://www.economist.com/blogs/economist-explains/2015/01/economist-explains-11
8. Blockchain. (n.d.) In Wikipedia. Retrieved February 8, 2018, Retrieved from https://en.wikipedia.org/wiki/Blockchain
9. Blockchain. (n.d.) In Investopedia. Retrieved February 8, 2018 Retrieved from https://www.investopedia.com/terms/b/blockchain.asp
10. Tapescott, D. and Tapscott, A. (2016). BLOCKCHAIN REVOLUTION: How the Technology Behind Bitcoin is Changing Money, Business, and the World. New
York, NY. Penguin Random House LLC.
11. Kaushal, M. and Tyle, S. (2015, January 13). The Blockchain: What It Is and Why It Matters. Retrieved from https://www.brookings.edu/blog/techtank/
2015/01/13/the-blockchain-what-it-is-and-why-it-matters/
12. Iansiti, M. and Lakhani, Karim. (2017, Jan - Feb. Issue). The Truth About Blockchain. Retrieved from https://hbr.org/2017/01/the-truth-about-blockchain
13. Shane, D. (2017, Dec. 7). Bitcoin boom may be a disaster for the environment. Retrieved from http://money.cnn.com/2017/12/07/technology/bitcoin-
energy-environment/index.html

THANKS!

@Dom_and_tom
@dom-&-tom
@dom_and_tom
@DomAndTom
HAVE QUESTIONS OR  
WANT TO LEARN MORE?
55 Broadway
Suite 702
New York, NY 10006
(646) 741-5049
625 N. Michigan Ave.
Suite 1800
Chicago, IL 60611
(773) 377-5585
811 W. 7th St.
12th Floor
Los Angeles, CA 90017
(323) 510-2696
CONTACT US: hello@domandtom.com
WWW.DOMANDTOM.COM

Dom & Tom Presents: The Basics of Cryptocurrency & Blockchain

More Related Content

What's hot (20)

Similar to Dom & Tom Presents: The Basics of Cryptocurrency & Blockchain (20)

Recently uploaded (20)

Dom & Tom Presents: The Basics of Cryptocurrency & Blockchain