“Sorry to be a wet blanket. But, writing a description
of Bitcoin for general audiences is bloody hard.
There’s nothing to...
How the Constraints of
Digital Define Bitcoin
(a Bitcoin parable by James D’Angelo)
“What is Bitcoin?” Harvard April 30, 2...
2008 – the story begins
it wasn’t just coincidence that
Bitcoin, as an idea, was born
in 2008 amid the turmoil of the
fina...
bitcoin addressed similar ideas
• money creation • monetary control • quantitative easing
the pragmatics
there were those who
thought the bailouts were
acceptable & fed acted
appropriately
the activists
there were those who
didn’t. chaos, mistrust,
anger – focused on big
central organizations
that wielded fina...
the programmers
One group turned to software to
address the problems that they
perceived with money. one
person in particu...
Satoshi Nakamoto
anonymous, but uses male japanese pseudonym
“The central bank must be trusted
not to debase the currency,...
Satoshi Nakamoto
His view: inside software
there is a solution to the
financial crisis.
His solution - turning ones
and ze...
the dream
was not new
IBM, Milton Friedman, others
cypherpunks (not cyberpunks)
cypherpunks advocate the widespread use of cryptography
as a route to social & political chan...
advantages of going digital
• fast (velocity of money)
• weighs nothing
• programmable
• internet ready
• international
• ...
but digital was proving elusive
digital is great for copying
perfect copies of music
perfect copies of videos, photos & data
perfect copies of messages
perfect copies of
transactions, digital
tokens, messages, etc.
but perfect copies makes bad money
counterfeits that are indistinguishable from Real McCoys
the double spending problem
networks are noisy and
transmission across
networks is far from
instantaneous
a hacker can cap...
but in 2008, the fires were rekindled
satoshi rifled through the new tech
inflamed & frustrated, satoshi looked elsewhere. studied
BitTorrent - released in 2001...
Napster - Trojan Horse?
launched in 1999, shut down in 2001. Napster’s failure
became an important case-study for hackers ...
Napster = centralized
BitTorrent’s
Solution
BitTorrent’s coup de grace was
to flip the problem of file
storage on its head. Instead of
central s...
satoshi’s decision
Armed with his Napster story, he was determined to find the
centralized part of banks. But what was it?
the ledger
a bank’s heart is not the vault, it is the ledger
Turn the Bank Inside Out
Satoshi thought,
“what if I could turn a
bank inside out?
Instead of one central
party controllin...
public ledgers - not so great
Bank ledgers are the ultimate tragedy of the commons. High
incentive to game the system. Res...
centralized = mistrust & anger
The decentralized ledger (blockchain)
To create his decentralized ledgers,
Satoshi paired two main
technologies. Nothing w...
digital’s weaknesses as strengths
Turn the weaknesses of digital
into strengths. The strength of
the digital was perfect c...
Satoshi’s Masterstroke
Eliminate cash to make currency.
the blockchain is a new form of public good
not state, not private, it is ‘other’ – truly public
fuel for permissionless innovation
smart contracts, mesh networks, notaries, voting, government, etc.
no need to ask to us...
full transparency (optional)
gangsters use it (optional anonymity)
a measure of any currency is amorality
dirty socks vs. the dollar
a strong currency is accepted by more people
its a baby currency
easy to steal, volatile, could disappear tomorrow
“If you don’t believe me or don’t get it, I don’t ha...
What is Money?
perhaps cash (gold, dollars) has always been just a placeholder
until we could finally decentralize the led...
Upcoming SlideShare
Loading in …5
×

Bitcoin 101 - Bitcoin For Beginners by World Bitcoin Network

5,594 views

Published on

Click here to watch the video of this slide presentation
https://www.youtube.com/my_videos?o=U&vmo=newest&sa=0&sf=added

2 Comments
15 Likes
Statistics
Notes
No Downloads
Views
Total views
5,594
On SlideShare
0
From Embeds
0
Number of Embeds
974
Actions
Shares
0
Downloads
291
Comments
2
Likes
15
Embeds 0
No embeds

No notes for slide

Bitcoin 101 - Bitcoin For Beginners by World Bitcoin Network

  1. 1. “Sorry to be a wet blanket. But, writing a description of Bitcoin for general audiences is bloody hard. There’s nothing to relate it to.” - Satoshi Nakamoto, July 5, 2010
  2. 2. How the Constraints of Digital Define Bitcoin (a Bitcoin parable by James D’Angelo) “What is Bitcoin?” Harvard April 30, 2014
  3. 3. 2008 – the story begins it wasn’t just coincidence that Bitcoin, as an idea, was born in 2008 amid the turmoil of the financial crisis the average person focused on the idea of money
  4. 4. bitcoin addressed similar ideas • money creation • monetary control • quantitative easing
  5. 5. the pragmatics there were those who thought the bailouts were acceptable & fed acted appropriately
  6. 6. the activists there were those who didn’t. chaos, mistrust, anger – focused on big central organizations that wielded financial power...
  7. 7. the programmers One group turned to software to address the problems that they perceived with money. one person in particular...
  8. 8. Satoshi Nakamoto anonymous, but uses male japanese pseudonym “The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.” - Satoshi Nakamoto, Feb 2009
  9. 9. Satoshi Nakamoto His view: inside software there is a solution to the financial crisis. His solution - turning ones and zeros into money. excellent writer. intimate history of finance & cryptography
  10. 10. the dream was not new IBM, Milton Friedman, others
  11. 11. cypherpunks (not cyberpunks) cypherpunks advocate the widespread use of cryptography as a route to social & political change. inside the digital domain, inside cryptography, they could sidestep the problems of money created by politics, banks and special interests. Since 1980 a primary aim was digital currency.
  12. 12. advantages of going digital • fast (velocity of money) • weighs nothing • programmable • internet ready • international • easy accounting • cheap – no need for gov. issuance/protection • etc. etc. etc.
  13. 13. but digital was proving elusive
  14. 14. digital is great for copying
  15. 15. perfect copies of music
  16. 16. perfect copies of videos, photos & data
  17. 17. perfect copies of messages perfect copies of transactions, digital tokens, messages, etc.
  18. 18. but perfect copies makes bad money counterfeits that are indistinguishable from Real McCoys
  19. 19. the double spending problem networks are noisy and transmission across networks is far from instantaneous a hacker can capitalize – the problem was so nasty that experts deemed it impossible
  20. 20. but in 2008, the fires were rekindled
  21. 21. satoshi rifled through the new tech inflamed & frustrated, satoshi looked elsewhere. studied BitTorrent - released in 2001. In 2008 p2p accounted for approximately 50% of all internet traffic
  22. 22. Napster - Trojan Horse? launched in 1999, shut down in 2001. Napster’s failure became an important case-study for hackers and a turning point in the design of modern software systems.
  23. 23. Napster = centralized
  24. 24. BitTorrent’s Solution BitTorrent’s coup de grace was to flip the problem of file storage on its head. Instead of central servers, the BitTorrent algorithm chopped all the media files up into tiny pieces and scrambled them on users’ computers everywhere. never centralize again
  25. 25. satoshi’s decision Armed with his Napster story, he was determined to find the centralized part of banks. But what was it?
  26. 26. the ledger a bank’s heart is not the vault, it is the ledger
  27. 27. Turn the Bank Inside Out Satoshi thought, “what if I could turn a bank inside out? Instead of one central party controlling the ledger, what if every user were recruited to maintain a constantly updated copy?”
  28. 28. public ledgers - not so great Bank ledgers are the ultimate tragedy of the commons. High incentive to game the system. Result: centralization
  29. 29. centralized = mistrust & anger
  30. 30. The decentralized ledger (blockchain) To create his decentralized ledgers, Satoshi paired two main technologies. Nothing was newer than 2001. • Proof of Work - 1997 (solves the double spending problem) • Elliptic Curves - 1987 (solves unique access to the ledger)
  31. 31. digital’s weaknesses as strengths Turn the weaknesses of digital into strengths. The strength of the digital was perfect copies – okay – so copy the ledger, everywhere, instantly. In turn, he made the uniqueness the flaw – any ledgers with even one comma not agreeing with the masses would be discarded, leaving fraudsters powerless.
  32. 32. Satoshi’s Masterstroke Eliminate cash to make currency.
  33. 33. the blockchain is a new form of public good not state, not private, it is ‘other’ – truly public
  34. 34. fuel for permissionless innovation smart contracts, mesh networks, notaries, voting, government, etc. no need to ask to use it, no fees for employing the tech, no oversight on provable transactions, contracts, etc
  35. 35. full transparency (optional)
  36. 36. gangsters use it (optional anonymity) a measure of any currency is amorality
  37. 37. dirty socks vs. the dollar a strong currency is accepted by more people
  38. 38. its a baby currency easy to steal, volatile, could disappear tomorrow “If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.” Satoshi July, 2010
  39. 39. What is Money? perhaps cash (gold, dollars) has always been just a placeholder until we could finally decentralize the ledger. does it need to have intrinsic value? is mass a negative? we don’t know. but bitcoin will help us learn.

×