BitcoinNathan KistlerCST300L Fall 2012

What is Bitcoin?• Digital Currency• Anonymous• Secure

The purpose of Bitcoin• Provide a currency free from centralized

control• Facilitate online commerce• Allow for anonymous transactions

History of digital currency• Credit card transactions require third party

management and reveal a customer's identity

• Cypherpunkso Affect political change using cryptographyo Jim Bell - Assassination Politics

History of digital currency• b-money

o Noncommercial prototype

• Bitgoldo Scarce digital resources can have value

• DigiCasho Prevent counterfeiting by using a trusted central authority

• WoW Gold, Linden Dollarso Digital currency to buy digital goods

History of Bitcoin• Proposed 1998 in paper by an individual

using the pseudonym Satoshi Nakamoto• Spawned from the cypherpunk movement• First version available in 2009

How Bitcoin works• Uses publically viewable leger to verify

transactions• Peer to Peer network

o Eliminates centralized controlo Peers verify transaction chain by reaching

consensus

• Use of cryptographyo Keep users anonymouso Prevent counterfeiting

• Open sourceo Users demand transparency

How Bitcoin works• Bitcoin Miner generates new currency at the

same rate as a geometric series• Total amount of currency is capped• Users have Bitcoin "wallet"• Each Bitcoin has a unique address and

associated denomination

How Bitcoin works• Bitcoin Miner generates new currency at the same rate

as a geometric series

• Total amount of currency is capped

• Users have Bitcoin "wallet"

• Each Bitcoin has a unique address and associated denomination

• About Bitcoin

Potential issues• Security vulnerabilities• Lack of acceptance• Theft

What Bitcoin could do• Reduce the power of government authority

o Difficult to collect taxeso Bypass laws and regulationso Allow interest groups to act without interferenceo Replace government issued currencies

• Make targeted advertising more difficulto Disrupt business plans for many websites

• Exchange Bitcoins for other types of currency

Referencesbitcoin.org staff (November 2012). About Bitcoin. Retrieved from http://bitcoin.org/about.html

blockchain.info (December 2012). Bitcoin Block Explorer. Retrieved from http://blockchain.info

Jim Bell (February 1996). Assassination Politics. Retrieved from http://www.outpost-of-freedom.com/jimbellap.htm

mtgox.com (December 2012). Bitcoin Exchange. Retrieved from https://mtgox.com/

Satoshi Nakamoto (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved from http://bitcoin.org/bitcoin.pdf

paysius.com staff (November 2012). How it Works. Retrieved from https://paysius.com/how-it-works

Morgen E. Peck (June 2012). Bitcoin: The Cryptoanarchist's Answer to Cash. Retrieved from http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash/0

Morgen E. Peck (October 2011). The World's First Bitcoin Conference. Retrieved from http://spectrum.ieee.org/computing/networks/the-worlds-first-bitcoin-conference

Benjamin Wallace (November 23, 2011). The Rise and Fall of Bitcoin. Retrieved from http://www.wired.com/magazine/2011/11/mf_bitcoin/all/1

weusecoins.com staff (May 22, 2011). What is Bitcoin? Retrieved from http://www.youtube.com/watch?v=Um63OQz3bjo

weusecoins.com staff (December 2012). Top Questions. Retrieved from http://www.weusecoins.com/questions.php