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Introduction to Bitcoin
- 1. Introduction to Bitcoin “Sorry to be a wet blanket. But, writing a description of Bitcoin for general audiences is bloody hard. There is nothing to relate it to.” – Satoshi Nakamoto, July 5, 2010.
- 2. lWikipedia Definition lBitcoin is a payment system invented by Satoshi Nakamoto in 2008 and introduced as open-source software in 2009. The system is peer-to-peer; all nodes verify transactions in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin. The system works without a central repository or single administrator, which has led the US Treasury to categorize it as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency although prior proposals existed. Bitcoin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.
- 3. Topics lThe History of BTC lTrust lPros lCons lThe Nuts and Bolts of Bitcoin lWallets lHow to Use BTC lHow to Acquire Bitcoin lQuestions and Recommendations
- 4. Bitcoin History lElectronic currency introduced through e-gold lSatoshi Nakamoto (pseudonym) l2008- Financial Downturn, QE, Housing Crisis l“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, February 2009 l2010 10,000 BTC used to buy $25 worth of pizza l2011 BTC reached $1 on February 9th l2011 Mt Gox is hacked June 19th l2013 BTC market cap exceeds $1 billion on March 28th and reaches $100 per BTC three days later
- 5. Trust lIdentity Theft lFraudulent Chargebacks lWealth Confiscation lCounterfeiting lInflation of Currency (chart follows) lPrice Manipulation by Futures Contracts (chart follows)
- 8. Advantages of Bitcoin lOpen Source lPeer to Peer lLimited Number of BTC produced lApproximately 21 Million lTransaction Cost Virtually Eliminated lAbility to Reach All Populations lProgrammability lAnonymity or Complete Transparency lAbility to Transcend Borders lMicro-Payments lHuge Growth Potential
- 9. PMs vs. Fiat vs. BTC
- 11. Disadvantages of Cryptocurrency lPrice Volatility lGovernment & Central Bank Intervention lMt Gox and Third Party Reliance by the Uninitiated lViewed as Criminal Behavior lDouble Conversion Necessity
- 12. The Nuts and Bolts lComputer Protocol utilizing SHA256 encryption, BitTorrent technology and Elliptic Curve technology (entirely pre-2002 technology) lTwo Parts of every Bitcoin Wallet lPrivate Key lPublic Key 1EutXYQhFusvohQhwqoFVMxan8q8tKa3He lBlockchain lDecentralized Ledger lEliminated Double Spending lMining lProof of Work
- 13. Public and Private Keys lPublic Keys lUsed to receive payment lMay be transmitted anywhere lMultiple may be made for one private key lRecorded on blockchain lPrivate Keys lUsed to transmit payment lMust be kept secure
- 14. The Technology Elliptic Curve (1987) Proof of Work (1997) SHA 256 Encryption (2001)
- 15. How To Use lTrade for Goods and Services lWebsites (Overstock & Microsoft) lGyft lRetailers (map as of 7/1/15)
- 17. How to Acquire Bitcoin lCoinbase lBitcoin Personal Transactions lFaucets and Startups
- 18. lNews lCapital Investment in 2012: $2.1 million lCapital Investment in 2013: $92 million lCapital Investment in 2014: approx. $284 million lMarket Capitalization is Approximately $4 Billion (@ around $300/BTC)
- 19. Q&A
- 20. Learn More lWorld Bitcoin Network (YouTube) lBitcoin.org lBitcoin.it (Bitcoin Wiki) lReddit.com/r/bitcoin lDominic Frisby