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Crypto for the Rest of Us


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An introduction to crypto and blockchain presented at the Young Jain Professionals Conference.

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Crypto for the Rest of Us

  1. 1. “Crypto” for the Rest of Us Young Jain Professionals Conference Hilton, Long Island 6th October, 2018 Copyright 2018, Pankaj Jain
  2. 2. What is “Crypto” or “Cryptocurrency”? • Digital money used for transacting • Store of value, like gold • Decentralized - no central bank like the RBI, usually, no corporation • Based on math and cryptography • Transactions stored on a “Blockchain” or many times referred to as a “digital ledger” (a very very slow database with lots of redundancy) Copyright 2018, Pankaj Jain
  3. 3. What is a “Blockchain” • A public ledger of all transactions • Everyone can see every transaction that occurs
  4. 4. Bitcoin Address Transaction Id Amount
  5. 5. • Transactions are transmitted to the network and then “miners” use sophisticated computers to solve a mathematical equation to verify the transaction. • A transaction is considered irreversible after 6 confirmations are transmitted on the network. • A “Public Key” is your address • A “Private Key” is essentially your password to make a transaction • Typically, each transaction on a blockchain has a cost which is usually paid by the sender • Transactions are made from a wallet Copyright 2018, Pankaj Jain
  6. 6. Copyright 2018, Pankaj Jain
  7. 7. Why is this a Big Deal? • Relatively quick transfers (as low as a few seconds to 10 minutes) • Removal of barriers to transact with anyone, anywhere, any time • Completely decentralized, do not need bank permission to transfer money or sell a security to another person, or check who owns a piece of art, or create and sell digital assets w/o worry of duplication, etc. • Every transaction is immutable and public • Transaction doesn’t have to be “money”, it can be the record of a marriage, divorce, purchase of a home, sale of a business, etc. • There will always be a record of the transaction as long as nodes are sharing the database Copyright 2018, Pankaj Jain
  8. 8. Bitcoin • Created by “Satoshi Nakamoto” in 2009 • Finite amount of “coins” can be mined - 21 million Bitcoins • Value is created by “mining” and good old fashioned economics - supply and demand • Bitcoins (BTC) can be transferred to any address, anywhere for low transaction fees • Bitcoin addresses start with a “1” or “3” • It operates almost as the reserve cryptocurrency and mostly as a SoV • Market cap ~ $110 Billion Copyright 2018, Pankaj Jain
  9. 9. Bitcoin • Inherently deflationary • Daily volume: ~$4.5B1 • Highly volatile and potentially illiquid • Uses “Proof of Work2” consensus mechanism Copyright 2018, Pankaj Jain 1. 2.
  10. 10. Bitcoin 2017-2018 Copyright 2018, Pankaj Jain
  11. 11. Bitcoin 7 Day Copyright 2018, Pankaj Jain
  12. 12. AltCoins • There are >1,800 cryptocurrencies and tokens. There is Bitcoin and then there are AltCoins (alternative coins) • Even some in the top 10 market cap are questionable • Privacy coins like ZCash, Monero and others have been gaining more interest from people because, like cash, they offer a higher degree of privacy than most other cryptocurrencies • Other coins like Tezos are changing “Proof of Stake” consensus where any stakeholder can participate in reaching consensus Copyright 2018, Pankaj Jain “Caveat Emptor”
  13. 13. Ethereum • Created by Vitalik Buterin, Gavin Wood, Joe Lubin and others in 2014 • Similar to Bitcoin as it is based on Blockchain and cryptography. • Ether is the “currency” used to transact on the Ethereum blockchain • Enables creation of “tokens” using a programming language called “Solidity” • Tokens created on Ethereum benefit from the development of the Ethereum Blockchain • Uses “Proof of Work” but hoping to transition to “Proof of Stake1” consensus mechanism Copyright 2018, Pankaj Jain 1.
  14. 14. Ethereum • Building blockchain apps on Ethereum has fueled a new generation of decentralized apps or “dApps” that use blockchain while trying to hide the complexity of blockchain • Examples of tokens on Ethereum are: • Basic Attention Token (BAT) +370% since ICO in May 2017 • 0x Protocol (ZRX) 1,235% since August 2017 Copyright 2018, Pankaj Jain
  15. 15. ICOs • ICOs (Initial Coin Offerings) are crowdfunding campaigns to raise capital via cryptocurrencies by selling tokens • Many tokens are “ERC20” tokens which means they comply with a standard and operate on top of the Ethereum blockchain • ICOs have raised over $18 Billion in the first 8 months of 2018 alone1 • Many ICOs are utility tokens, others are securities, many others are scams! • “If it looks too good to be true, it usually is.” Copyright 2018, Pankaj Jain
  16. 16. ICOs • The SEC is rapidly increasing enforcement of securities laws violations from ICOs • Bitcoin and Ether have been declared commodities by the CFTC and SEC • Other governments are trying to figure out how to handle ICOs, though, most have stated existing laws are applicable regardless of the technology. What remains unclear is which crypto currencies are securities and which are utility tokens or commodities. Copyright 2018, Pankaj Jain
  17. 17. Resources • Some Int’l Exchanges • Binance • Bittrex • Bitfinex • Cryptopia Copyright 2018, Pankaj Jain
  18. 18. Resources • • • • • • • index.php/ ERC20_Token_Standard • Bitcoin Wallets - https:// wallet • Ethereum Wallet - https:// releases • Tezos Wallets - https:// Deployments/wiki/Galleon:- Releases and https:// Tezori Copyright 2018, Pankaj Jain
  19. 19. Thank You! Twitter: @pjain Community: Telegram: Copyright 2018, Pankaj Jain