A 30-minute overview of Bitcoin, and the underlying technology that enables this digital payments system to work. Topics covered: cryptography, public/private keys, signatures.
6. What is Bitcoin?
• Bitcoin - a collection of concepts and
technologies that form the basis of a digital money
ecosystem.[1]
• A digital ledger that is replicated across all
network participants
@horeaporutiu
• Open source project - source code on GitHub
IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch01.html
7. What is Bitcoin?
• Bitcoin protocol
(decentralized network)
@horeaporutiu
• Public ledger - the
blockchain
IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch01.html
• Rules for issuing
currency, and transaction
validation
• Consensus rules (Proof
of work)
8. Problems with digital currency
• Can I trust the money is not counterfeit?
@horeaporutiu
• Can I trust the money will only be spent once?
(Double-spending problem)
IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch01.html
9. Solution - physical money
@horeaporutiu IBM Code
• Physical money uses holographic strips to ensure
authenticity
• As you can
see there are
still problems
with physical
money
10. Solution - digital money
@horeaporutiu IBM Code
• Digital money uses
cryptography to
ensure authenticity
• Cryptographic
digital signatures
(with a supporting
network) solve
double-spending
problem
• Cryptographic - means `secret writing` in Greek
12. Cryptography & Bitcoin
@horeaporutiu IBM Code
• Cryptography can be used to used to prove
knowledge of a secret without knowing the
secret
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
13. Bitcoin transactions
@horeaporutiu IBM Code
• Double-entry bookkeeping
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch02.html
14. Bitcoin transactions
@horeaporutiu IBM Code
• Each time a user transactions on the bitcoin
network, they sign their transaction with their
digital signature
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch02.html
• Digital signature = public key + (derivative of
private key)
✍🏻
15. Cryptography & Bitcoin Cont.
@horeaporutiu IBM Code
• Three concepts help us prove knowledge of a
secret without knowing the secret
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
• Digital keys 🔑
• Bitcoin Address 🏡
• Digital signatures ✍🏻
16. Bitcoin payments
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
• Bitcoin Address 🏡
• To send bitcoin over the network, you will need to
have a address to sent it do
17. Elliptic Curve Multiplication
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
Elliptic curve point multiplication is the operation of s
https://en.wikipedia.org/wiki/Elliptic_curve_point_multiplication
18. Elliptic Curve Multiplication
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
• Easy to do in one direction ➡️
• Impossible to do in other direction ⬅️
• Owner of private key
19. Key Takeaway
@horeaporutiu IBM Code
• Owner of private key can easily create a public
key and share it with the world 🌍
• Why?
• Because nobody can calculate the private key
from the public key
• Why?
• This is the property of elliptical curve
multiplication
⬇️
⬇️
20. Generate public key
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
K = k * G
• K = public key
• k = private key, which is a random
number from 0 to n -1 where n = 1.15 *
10^77
• G = generator point
21. Why does this matter?
@horeaporutiu IBM Code
• Ensures payments on the bitcoin network are
public, but nobody can find the password (private
key) for each transaction
22. Why does this matter?
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
• Miners in the Bitcoin network can easily approve
that transactions are valid, without knowing the
private keys of the participants
• Anyone on the
network can validate
transactions, without
the need for a bank, or
central authority
23. Bitcoin summary
@horeaporutiu IBM Code
https://www.safaribooksonline.com/library/view/mastering-bitcoin-2nd/9781491954379/ch04.html#ch04_keys_addresses
• Transactions on network are signed using public,
and private keys
• Nodes (computers) on the network, solve proof-
of-work calculation to approve transactions
• Bitcoin is digital payment ecosystem
• Bitcoin is decentralized - no need for a bank, or
central authority to approve transactions
💵
24. Types of blockchain
Public Private
@horeaporutiu
• Open to anyone
• Large computational
requirement
• Participants
incentivized with
cryptocurrency
• Bitcoin
• Need permission to
join the network
• Walmart solution
• Less computational
power required
• Cryptocurrency is
typically not involved
• Transactions can be
kept private
IBM Code
25. Private (permissioned) blockchain
@horeaporutiu IBM Code
• BaaS (Blockchain as a service) based
on Hyperledger Fabric
• Open source software project with over
185 organizations contributing
• IBM Blockchain Starter Plan is free for
one month - used for developing and
testing networks
26. Contact info
@horeaporutiu IBM Code
• Questions: horea.porutiu@ibm.com
• Social: Tweets @horeaporutiu
• Site: https://horeaporutiu.github.io/
• Blog: https://medium.com/@horeaporutiu
Hey everyone, my name is Horea Porutiu and I am a Developer advocate for Emerging Technologies at IBM. My team focuses on Artificial Intelligence, blockchain, Internet of Things, and Augmented/Virtual reality. Our mission is to help software developers use the IBM Cloud platform. We write blog posts about how to use Watson, the blockchain platform, etc, do video tutorials, and speak at meet ups and conferences. I have a computer science and a management science major from UCSD. I graduated last March, so I am still less than a year out of school. I have been with IBM for about 10 months now.
before we get started, by a show of hands, how many of you know about blockchain?
How many have taken a course or been to class on blockchain?
How many have developed applications using blockchain technoloies?
Well no matter your skill level, and familiarity with blockchain, I think you will be able to learn something useful from this session.
Today, I want to take you through a journey with blockchain. I’ll go over the main concepts of blockchain, and more importantly, when blockchain is a suitable solution for your problem. I’ll talk about Hyperledger, a popular open source technology for building blockchain applications and then I’ll go into a demo of how to start building blockchain apps with Hyperledger, and then go into Q/A.
before we get started, by a show of hands, how many of you know about blockchain?
How many have taken a course or been to class on blockchain?
How many have developed applications using blockchain technoloies?
Well no matter your skill level, and familiarity with blockchain, I think you will be able to learn something useful from this session.
Today, I want to take you through a journey with blockchain. I’ll go over the main concepts of blockchain, and more importantly, when blockchain is a suitable solution for your problem. I’ll talk about Hyperledger, a popular open source technology for building blockchain applications and then I’ll go into a demo of how to start building blockchain apps with Hyperledger, and then go into Q/A.
The most popular and typical solution of blockchain is Bitcoin.
With a show of hands, has anyone here owned parts of a bitcoin?
If you have, you’ll be able to relate to this
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
So here is the mandatory definition slide
The main points here is that blockchain is a list of records, which enables participants to transact with each over a network with TRUST.
also, the ledger is replicated across all participants, so everyone in the network has a single source of truth
Explain private vs public, and what each means
What is a public blockchian, is private hyperledger a blockchain implementation?
Explain private vs public, and what each means
What is a public blockchian, is private hyperledger a blockchain implementation?
Explain private vs public, and what each means
What is a public blockchian, is private hyperledger a blockchain implementation?