Your SlideShare is downloading. ×
Bitcoin
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Bitcoin

1,403
views

Published on


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,403
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
95
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Bitcoin Peer to peer Electronic cash, V1 Puneet Kumar
  • 2. Why  doCommerce(mymoney, myFinancialInstitution)  assert(myFinancialInstitution.isTrustWorthy())  doCommerceFI(myMoney){  if(dispute)  myMoney -= transactionCost; fiMoney ++; bankerProfit++;  doCommercePost()  loseMoney; sulk;
  • 3. What if  doCommerce(mymoney, you, useCrypto= true)  assert(preventDoubleSpending)  preventDoubleSpending()  createCryptoProof(timeStampServer)
  • 4. How  Transactions  TimeStamp Server  Proof of Work  Network  Incentive  Reclaiming Disk space  Payment Verification  Combining and Splitting Value  Privacy  Calculation  PRINT MONEY
  • 5. Transactions  I have an electronic coin. I want to give to you.  I will digitally sign the coin, with my private key.  Anyone can verify that its my signature, with my public key.  The digital signature will contain your public key; so everyone knows you received the coin.  Issue: What if I double spend.
  • 6. Timestamp Server  Input: electronic coin, timestamp of previous transactions  Process: Hash the input, use currentTime.  Output: Publish the hash. This is proof that this coin existed at this time; (thisTime is after previous Timestamp)  Timestamp server create proof that this transaction took place at this time, in correct order.
  • 7. Proof of Work  Find a nonce which when hashed, creates a hash staring with zero bits.  This takes CPU effort.  The Proof of Works’ form a chain. This chain is the fraud deterrent. To defraud, spend exponential CPU effort(dependent on chain length). Not worth it for long chains.
  • 8. Network  Broadcast new transactions.  Each node collects transactions, in a box/block.  Creates Proof of Work. Publishes it.  Creates chain of proof of work. As long as most nodes know about longest chain of proofs, it must be the correct transaction history.
  • 9. Incentive  Why should honest nodes participate  Block is started with a coin. Later, when this coin is in circulation, it creates chain of proofs.  If a node own coins, it better keep the system running with growing chain, and discouraging rogue nodes from taking over.
  • 10. Reclaiming Disk Space  So many proofs. What about my disk space.  Practically, there should not be need to prune the block.  But it can be done. Note to self: Study Merkle tree
  • 11. Payment verification  Verify the longest chain. How.  Combining and Splitting values!
  • 12. Privacy  Don’t link public key to identity  Create multiple public keys
  • 13. Calculations  Binomial Random Walk  Gamblers Ruin problem  Exponentially difficult
  • 14. references  Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto bitcoin.pdf  Hashcash