Bitcoin

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What it is, how it works,and why it's the most important invention of the 21st century.

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Bitcoin

  1. 1. Bitcoin: What It Is, How It Works,And Why Its The Most ImportantInvention of the 21stCentury
  2. 2. John LightBitcoinConsultant.meAlmost one year ofprofessionalexperience and twoyears of personalexperience with Bitcoin
  3. 3. “Commerce on the Internet has come to relyalmost exclusively on financial institutionsserving as trusted third parties to processelectronic payments. While the system workswell enough for most transactions, it still suffersfrom the inherent weaknesses of the trustbased model... [a] purely peer-to-peer versionof electronic cash would allow online paymentsto be sent directly from one party to anotherwithout going through a financial institution.”- Satoshi NakamotoBitcoin: A Peer-to-Peer Electronic Cash System(AKA “The Bitcoin Whitepaper”)
  4. 4. What is Bitcoin?Decentralized, distributed, p2p payment network− Not controlled by a central authority− No middlemen between transactions− Transactions are irreversible− Changes to the core payment protocol must beadopted by a majority of the networkCryptocurrency− Secured by 256-bit encryption− Only 21 million currency units producedEach unit can be broken in 100 million pieces
  5. 5. How Does Bitcoin Work?Transactions are spent using a cryptographicpublic/private key pair.All transactions are added to the global Bitcoinledger known as the “blockchain.”Blocks on the blockchain contain the previous~10 minutes of transactions which are verifiedby “miners.”“Mining” both creates new bitcoins and securesthe payment network against fraud.Mined blocks release 25 new bitcoins; thisnumber halves approximately every four years
  6. 6. Why Bitcoin Is The Most ImportantInvention of the 21stCenturyFirst global, decentralized, censorship-proofcurrency.People can transfer value to anywhere on theplanet instantly.Bitcoin is deflationary, but can accommodate anunlimited market size.Bitcoin enables new technology completelyseparate from its function as a payment network.
  7. 7. Why Bitcoin Is The Most ImportantInvention of the 21stCenturyFirst global, decentralized, censorship-proofcurrency.People can transfer value to anywhere on theplanet instantly.Bitcoin is deflationary, but can accommodate anunlimited market size.Bitcoin enables new technology completelyseparate from its function as a payment network.

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