Discussion of the Bitcoin blockchain philosophy, and its connection with the libertarian philosophy. We also discuss public key cryptography and its impact it has had on the internet age. We also discuss the difference between public, private, and consortium blockchains.

1. BLOCKCHAIN
FUNDAMENTALS
BLOCKCHAIN PHILOSOPHY & MORE
CRYPTOGRAPHY
Chhay Lin Lim

2. Recap
01Continuing the Bitcoin PoW consensus where we left of
More Bitcoin consensus protocol
02Bitcoin’s monetary policy and how it relates to the Financial Crisis
Bitcoin and the Financial Crisis of 2008
03Introducing the second evolution of Blockchains, and in particular
Ethereum
Introduction to Blockchain 2.0
04What ICOs and STOs are, and how Ethereum gives rise to these
new forms of fundraising
ICOs and STOs
05
Encrypt your e-mail addresses for more privacy
Practical assignment 4: implement
Mailvelope for encrypted e-mails
06Wrap up of today’s workshop
Wrap up

3. What is crypto-economics? Crypto-
economics
Crypto-
economics
Software
development
Applied
cryptography
Game theory
Blockchain

5. How does the Bitcoin Blockchain utilizes
crypto-economics?
Crypto-
economics

6. Bitcoin Proof-of-Work concepts
What problems does Bitcoin solve?
1. Double spending
2. Byzantine Generals Problem
Rules
1. A block is only valid when the hash is < target hash
2. Longest chain is always the true chain
Other concepts
1. 51% attack
2. Miner
3. Hash
4. Hash rate
5. Hash power
6. Bitcoin halving
7. Block frequency
8. Mining rewards
9. Mining difficulty
10.Target hash
Bitcoin’s
Proof-of-
Work

8. Ethereum
Building blocks of Blockchain 2.0
1. dApps (decentralized applications)
2. Smart contracts
3. Distributed Autonomous Organization (DAO)
4. Tokenization of companies and projects

9. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
What Blockchain types are there, and In what circumstances is
Blockchain useful?

12. The Bitcoin
Jingle
What does Tatiana Moroz want to achieve
with Bitcoin?
Lyrics
I didn’t want to give any of my money to a nation based on war
I wanted to be free, nothing holding me back from where I want to go
I thought about it, I thought about it
What was the choice that I made?
It was to take away the money,
Don’t give up your money,
Use Bitcoin whenever you pay
Use Bitcoin whenever you pay
I didn’t want to waste any of my time working for the government,
I wanted to be kind, open up my mind just like an instrument
Oooooo, what a little crypto can do
No longer a slave
I don’t have to work until the grave
So many times I cried to myself that we didn’t have a chance
Nakamoto came along with more than a song, gave the labor back to man

13. Main Schools of Economic Thought
Marxism Keynesianism
Austrian School
of Economics
Chicago School
of Economics
Karl Marx - Das
Kapital (1867)
“Value comes
from labour”
J.M Keynes – The General
Theory … (1936)
More government
expenditures and lower
interest rates as private
consumptieto stimulate the
economy
Y = C + I + G + (X – M)
Carl Menger (1873)
“Value is subjective”
The marginal revolution
Mises
Economic
calculation (1920)
Hayek –
Denationalization
of Money (1976)
Rothbard
(libertarian
anarchist)
Cryptoanarchism (‘80)
Milton Friedman
We must have a Central Bank to
regulate the money supply
(changed opinion at end of life)
David Friedman
(libertarian
anarchist)
Patri Friedman
(libertarian
anarchist)

14. What does Tatiana Moroz want to
achieve with Bitcoin?
“It’s [Bitcoin] very attractive to the
libertarian viewpoint if we can explain it
properly. I’m better with code than with
words though.”
- Satoshi Nakamoto, 14-11-2008

15. What is Libertarianism/Libertarian Anarchism?
Libertarians want to decentralization of power
1. Every individual has the rights to life, liberty, and property
2. Non-aggression principle: no one may infringe those rights
3. Want an economic system of
• Free market economics
• Capitalism
Two types of Libertarians
1. Minarchists: wants a small government (defense, police,
justice)
2. Anarchists: want no government. If people are free and left
alone, initiatives and enterprises will emerge naturally that
take care of defense, police, and justice.
Minarchist
vs
Anarchist

16. Libertarianism is not a new idea: Lao Tze
The more laws and restrictions there are,
The poorer people become.
The sharper men’s weapons,
The more trouble in the land.
The more ingenious and clever men are,
The more strange things happen.
The more rules and regulations,
The more thieves and robbers.
Therefore the sage says:
I take no action and people are reformed.
I enjoy peace and people become honest.
I do nothing and people become rich.
I have no desires and people return to the good and simple
life. (Tao Te Ching, Chapter 57)
Libertarian
Daoism

17. Social
contract
theory
Why is a government necessary? Social
contract theory: Hobbes vs Locke
1. A social contract is an act by which individuals agree to
form a government
2. According to the theory, governments are established by
the people
3. The theorists hypothesize the existence of a state of nature
before any government
A. Thomas Hobbes: life was brutish, nasty and short. War
of all against all. Therefore, we need a sovereign
(leviathan) with absolute power. All citizens must obey
the sovereign.
B. John Locke: property is not secure. The people install
a government to protect property.

18. John Locke
Locke’s libertarian argument
Locke’s argument:
1. Self-sovereignty
2. Non-Aggression Principle
3. No one can legitimately exercise authority over you without
your consent
4. Governments must rest on consent of the governed, and
may be legitimately be overthrown if they overstep their
authority.
Self-
ownership
Right to
Life
Right to
Liberty
Right to
Property

19. More
libertarianism
Other aspects of libertarianism
Other aspects of libertarianism:
1. Unintended consequences
2. Spontaneous order
3. Intellectual modesty in how we should shape society

20. More
libertarianism
Other aspects of libertarianism
Other aspects of libertarianism:
1. Unintended consequences
2. Spontaneous order
3. Intellectual modesty in how we should shape society

21. More
libertarianism
Other aspects of libertarianism
Other aspects of libertarianism:
1. Unintended consequences
2. Spontaneous order
3. Intellectual modesty in how we should shape society

22. Anarchisms
Libertarian anarchism vs other anarchisms
There are various anarchist thoughts

23. Famous
libertarians
Famous libertarians
Libertarianism is mainly an intellectual movement and has a
small following. Despite that, the philosophy has a huge
impact on society
Jimmy Wales:
oprichter
Wikipedia
Elon Musk:
oprichter Tesla,
SpaceX, PayPal
Peter Thiel:
oprichter PayPal
Steve Wozniak:
oprichter Apple

24. More
libertarians
Not always safe to be a Libertarian (anarchist)
Pavel Durov:
oprichter Telegram Edward Snowden:
NSA documenten
gelekt
Julian Assange:
oprichter
Wikileaks Ross Ulbricht:
oprichter Silk
Road

25. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
In what circumstances is Blockchain useful?

26. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
What types of Blockchains can you use, and In what
circumstances is Blockchain useful?

27. Public
Blockchain
Different types of Blockchain
Other aspects of libertarianism:
1. Public
2. Private
3. Consortium
Public
Many peers
Most
transparent
Validator is
(pseudo)
anonymous
Consensus
dependent on
target network
Reward token
present
Most
decentralized

28. Private
Blockchain
Different types of Blockchain
Other aspects of libertarianism:
1. Public
2. Private
3. Consortium
Private
Few peers
Least
transparent
Validators are
known to
private parties
Consensus
depends on
the target of
the private
party
Reward token
often absent
Most central

29. Consortium
Blockchain
Different types of Blockchain
Other aspects of libertarianism:
1. Public
2. Private
3. Consortium
Consortium
Few peers
Least
transparent
Validators are
known to the
consortium
Consensus
dependent on
target
consortium
Reward token
often absent
Fairly
decentralized

30. Blockchain
classification
Overview of different Blockchains
Anyone can participate in the blockchain.
Not everyone is allowed to act as a
validator.
(DPoS / EOS)
Anyone can participate in the blockchain.
Everyone can act as a validator.
(PoW / Bitcoin)
?
Not everyone can participate in the
blockchain. Only members of a private
party or consortium may act as a
validator.
(PoA / Libra consortium)
Public
Trustindecentralization
Private
Permissionless Permissioned
Trust in unknown validators

31. Yes
no
Yes
no
no
no
Yes
nono
Yes
Yes
Is a (shared)
database required?
A blockchain solution is
not necessary
A blockchain solution is
not necessary
Alternatives are email or
spreadsheets.
An alternative is a traditional
database.
Are there multiple
parties writing in the
database?
Consider public
blockchain
Consider public / private
/ consortium blockchain
Consider private /
consortium blockchain
A blockchain solution is
probably not necessary.
Otherwise, consider a
private / consortium
blockchain
Do you want/
have a trusted
intermediary?
Does your current
solution work?
Do the writers know
and trust each other?
Do you want/ have a
trusted intermediary?
Decision tree

32. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
What types of Blockchains can you use, and In what
circumstances is Blockchain useful?

33. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
What types of Blockchains can you use, and In what
circumstances is Blockchain useful?

34. Encrypted
Messaging
Set up Mailvelope for encrypted e-mail
Mailvelope can be used with many e-mail applications (gmail,
outlook, yahoo …). Set up Mailvelope by:
1. Download the Mailvelope browser extension
2. Follow all steps
3. Send an encrypted message to c.l.lim@Saxion.nl
4. Add the PGP public key of Satoshi Nakamoto by
• Going to Key management
• Going to Import
• Copy – pasting Satoshi’s public key
• You can find his public key online. Look it up on
Google
• Now you can share secret messages with Satoshi

35. Agenda
01Social contract theory: contrasting Hobbes and Locke, and
discussing where libertarian anarchism comes from
Blockchain Philosophy
02As an introduction to public key cryptography, we create a paper
wallet
Paper wallet
03Work on your fictional Blockchain
startup
04Discussing the role of public key cryptography in Blockchain
More cryptography
05Practicum: Encrypt your e-mail with
Mailvelope
06Wrap up of today’s workshop
Wrap up
What types of Blockchains can you use, and In what
circumstances is Blockchain useful?

36. THANK YOUBLOCKCHAIN FUNDAMENTALS:
BLOCKCHAIN PHILOSOPHY & MORE
CRYPTOGRAPHY