introduction to bitcoin

BitCoin

An overview

Why ?

First crypto-currency

Basics – Public key cryptography

How BitCoin ecosystem works ?

A wallet to start off

BitCoin transaction

The new Gold Rush

Genesis Block

Mining Details

• Hash strings beginning with 0’s

• Mining program is open source!

• Generate a new block by taking an existing block, set of transactions and a nonce

• Current target hash – less or equal is accepted

• Difficulty – set by the network

• Transaction fees to incentivize new block gen.

• Become part of a pool

THE Network

• BitCoin network – one and only

• Decentralized and open to all

• Low transaction fees

• Constant bitcoin generation (10 min / block)

• 100 petaFLOPs

• Irrevocable transactions

Advantages

• Almost 0 processing fee – across the world

• No need of a bank account !

• Equal chance of mining

• Anyone can create an exchange

• Anonymity

• Businesses accept bitcoins (wordpress, baidu, reddit, etc..)

• Financial Control – no one can question

Wait.. But..

Concerns

• BitCoin is anti-inflationary

• No central authority – double edged sword

• Hacker prone – tough to be exceed 30 trillion calculations per second and 100 petaFLOPs –but possible

• Regulatory uncertainty

• Secure your wallets – digitally!

• Volatile exchange prices

Predictions..

• Present day disruptions thanks to P2P systems

– Telephone ---> VOIP (skype / hangout)

– SMS – almost obsolete

– File transfers / music players

– Mail (post boxes as antiques ? )

• Banks – do we really need them ?

• Decentralized and global financial system

– Money over Internet !

Opportunities

• A new way to transact

– Irrevocable transactions (adv : E-Comm sites)

• Innovative applications – money reaches where banks can’t reach

• World-wide system – Forex (what’s that ?)

• Optimizing face-to-face transactions – cannot replace credit cards. Minimum 10 mins to confirm

Thank You