What is Bitcoin? (May 2011)
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What is Bitcoin? (May 2011)

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These are the slides from my May 2011 Talk at KPMG Zurich for "Netzzunft.ch".

These are the slides from my May 2011 Talk at KPMG Zurich for "Netzzunft.ch".

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What is Bitcoin? (May 2011) What is Bitcoin? (May 2011) Presentation Transcript

  • What is Bitcoin?A look at the world’sfirst cryptocurrency.Stefan Thomas • WeUseCoins.com
  • physical money
  • (direct transfer) physical money
  • “peer-to-peer” physical money
  • online
  • online
  • online
  • online
  • intermediary
  • intermediary middle man
  • intermediary cost middle man =
  • intermediary cost middle man = risk
  • intermediary cost middle man = risk no choices
  • intermediary middle man = problem
  • intermediary
  • distributed intermediaries
  • distributed intermediaries cost?
  • distributed intermediaries cost?
  • distributed intermediaries cost?
  • distributed intermediaries cost?
  • distributed intermediaries cost
  • distributed intermediaries cost risk?
  • distributed intermediaries cost risk?
  • distributed intermediaries cost risk?
  • distributed intermediaries cost risk
  • distributed intermediaries cost risk choices?
  • distributed intermediaries cost risk choices
  • semi-distributed intermediaries (current situation)
  • distributed intermediaries is it possible?
  • step 1: Decentralizing identity.
  • 1976Solved.Sincerely,Ralph Merkle Martin Hellman Whitfield Diffie
  • 1976Solved. (with digital signatures)Sincerely,Ralph Merkle Martin Hellman Whitfield Diffie
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 2: Decentralizing accounting.
  • step 3: Decentralizing truth.
  • step 3: Decentralizing truth.
  • A Bstep 3: Decentralizing truth.
  • B B B BB A B Bstep 3: Decentralizing truth. Voting?
  • B B B BB A A A AA A A A AA A A A A B B AAA A A AA A A A A AA A A A A A A A A AA A A A A A Astep 3: Decentralizing truth. Voting? Problem: Fake nodes!
  • B B B BB A B Bstep 3: Decentralizing truth. Bitcoin’s most important idea:
  • B B B BB A B Bstep 3: Decentralizing truth. Bitcoin’s most important idea: “1 CPU, 1 Vote”
  • so... how much would it take?
  • hashing power
  • hashing powerDisclaimer: FLOPS ≠ FLOPS
  • hashing power
  • hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • hashing power as of 24/5/20113500 Ghash/s = 29.05 PFLOPSthree-day window estimate
  • hashing power as of 24/5/2011 29.05 all values are in PFLOPS 4.7 5.14 Sources: bitcoin.sipa.be/speed-lin.png fah-web.stanford.eduTianhe-1A Folding@home Bitcoin jcst.ict.ac.cn
  • hashing power
  • hashing powerA realistic view of hashing attacks against Bitcoin.
  • hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 8000 Radeon 5870 GPUs
  • hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 8000 * 250$
  • hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$
  • hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$Power: ~ 220W * 8000
  • hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$Power: ~ 1.76 MWBenefit: Stopping transactions/Double spends
  • step 4: Decentralizing issuance.
  • step 4: Decentralizing issuance. Who gets to spend new coins?
  • step 4: Decentralizing issuance. M F M ... Money awarded F ... Work provided
  • money supply21 million max.15 mil.10 mil.5 mil.
  • money supplyCurrently:6.28 mio
  • identity  accounting decentralized truth  issuance 
  • decentralized currency 
  • economy
  • economy
  • economySource:BitcoinCharts.com
  • economyExcerpt:Design & WebhostingSource:https://en.bitcoin.it/wiki/Trade
  • economySource:https://en.bitcoin.it/wiki/Bitcoin_Maphttp://www.weusecoins.com/globe-bitcoin/
  • economyExisting Services• Escrow, e.g. ClearCoin• Online Wallet, e.g. Instawallet.org• Trial Service, e.g. Bitcoin Faucet• Wallet Backup, e.g. Wuala• Press, e.g. Bitcoin Sun• Mining Pools, e.g. DeepbitMany more in the works...
  • identity  accounting decentralized truth  issuance 
  • applicationsDDNS Notarization Other Currencies Deeds Web-of-trust eVoting DPKI
  • applicationsGreat Thing: Shared Work
  • thanks! for listening
  • questions?