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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  • 1. What is Bitcoin?A look at the world’sfirst cryptocurrency.Stefan Thomas • WeUseCoins.com
  • 2. physical money
  • 3. (direct transfer) physical money
  • 4. “peer-to-peer” physical money
  • 5. online
  • 6. online
  • 7. online
  • 8. online
  • 9. intermediary
  • 10. intermediary middle man
  • 11. intermediary cost middle man =
  • 12. intermediary cost middle man = risk
  • 13. intermediary cost middle man = risk no choices
  • 14. intermediary middle man = problem
  • 15. intermediary
  • 16. distributed intermediaries
  • 17. distributed intermediaries cost?
  • 18. distributed intermediaries cost?
  • 19. distributed intermediaries cost?
  • 20. distributed intermediaries cost?
  • 21. distributed intermediaries cost
  • 22. distributed intermediaries cost risk?
  • 23. distributed intermediaries cost risk?
  • 24. distributed intermediaries cost risk?
  • 25. distributed intermediaries cost risk
  • 26. distributed intermediaries cost risk choices?
  • 27. distributed intermediaries cost risk choices
  • 28. semi-distributed intermediaries (current situation)
  • 29. distributed intermediaries is it possible?
  • 30. step 1: Decentralizing identity.
  • 31. 1976Solved.Sincerely,Ralph Merkle Martin Hellman Whitfield Diffie
  • 32. 1976Solved. (with digital signatures)Sincerely,Ralph Merkle Martin Hellman Whitfield Diffie
  • 33. step 2: Decentralizing accounting.
  • 34. step 2: Decentralizing accounting.
  • 35. step 2: Decentralizing accounting.
  • 36. step 2: Decentralizing accounting.
  • 37. step 2: Decentralizing accounting.
  • 38. step 2: Decentralizing accounting.
  • 39. step 2: Decentralizing accounting.
  • 40. step 3: Decentralizing truth.
  • 41. step 3: Decentralizing truth.
  • 42. A Bstep 3: Decentralizing truth.
  • 43. B B B BB A B Bstep 3: Decentralizing truth. Voting?
  • 44. 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!
  • 45. B B B BB A B Bstep 3: Decentralizing truth. Bitcoin’s most important idea:
  • 46. B B B BB A B Bstep 3: Decentralizing truth. Bitcoin’s most important idea: “1 CPU, 1 Vote”
  • 47. so... how much would it take?
  • 48. hashing power
  • 49. hashing powerDisclaimer: FLOPS ≠ FLOPS
  • 50. hashing power
  • 51. hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • 52. hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • 53. hashing power as of 24/5/20113500 Ghash/sthree-day window estimate
  • 54. hashing power as of 24/5/20113500 Ghash/s = 29.05 PFLOPSthree-day window estimate
  • 55. 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
  • 56. hashing power
  • 57. hashing powerA realistic view of hashing attacks against Bitcoin.
  • 58. hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 8000 Radeon 5870 GPUs
  • 59. hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 8000 * 250$
  • 60. hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$
  • 61. hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$Power: ~ 220W * 8000
  • 62. hashing powerA realistic view of hashing attacks against Bitcoin.Capital: ~ 2 000 000$Power: ~ 1.76 MWBenefit: Stopping transactions/Double spends
  • 63. step 4: Decentralizing issuance.
  • 64. step 4: Decentralizing issuance. Who gets to spend new coins?
  • 65. step 4: Decentralizing issuance. M F M ... Money awarded F ... Work provided
  • 66. money supply21 million max.15 mil.10 mil.5 mil.
  • 67. money supplyCurrently:6.28 mio
  • 68. identity  accounting decentralized truth  issuance 
  • 69. decentralized currency 
  • 70. economy
  • 71. economy
  • 72. economySource:BitcoinCharts.com
  • 73. economyExcerpt:Design & WebhostingSource:https://en.bitcoin.it/wiki/Trade
  • 74. economySource:https://en.bitcoin.it/wiki/Bitcoin_Maphttp://www.weusecoins.com/globe-bitcoin/
  • 75. 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...
  • 76. identity  accounting decentralized truth  issuance 
  • 77. applicationsDDNS Notarization Other Currencies Deeds Web-of-trust eVoting DPKI
  • 78. applicationsGreat Thing: Shared Work
  • 79. thanks! for listening
  • 80. questions?