This document provides an overview of Bitcoin and cryptocurrency as well as critiques of the current financial system. It discusses how Bitcoin works as an alternative currency through a peer-to-peer network without a central authority. It also highlights concerns around unsustainable debt levels, bail-ins, and the need for a new financial system not controlled by private banks. The document argues that Bitcoin has properties making it suitable as money, including scarcity, security, and transportability. Its future applications from remittances to smart contracts are also noted.

1. Dawie Poolman

2. " It is well enough that people of the nation do
not understand our banking and money system,
for if they did, I believe there would be a
revolution before tomorrow morning."
~ Henry Ford

3.  The



current financial system
How does it work?
Current state around the world
Future
 Back
to fundamentals: What is money?
 Bitcoin



Basics
Protocol design
Future developments

4. "If the American people ever allow private
banks to control the issue of their currency,
first by inflation, then by deflation, the banks
and corporations that will grow up around
them will deprive the people of all property
until their children wake up homeless on the
continent their Fathers conquered...I believe
that banking institutions are more dangerous
to our liberties than standing armies... The
issuing power should be taken from the banks
and restored to the people, to whom it
properly belongs."

5.  The


current financial system
How does it work?
Search for: Mike Maloney ―Hidden Secrets Of
Money‖

9.  China
urges 'de-Americanized' new financial
system
 End of the Petrodollar?
 Uncharted territory with unsustainable debt
levels – EU, UK, Japan, USA etc..
 Bail-In strategies like Cyprus

10. Rather than fixing the financial system, maybe
it is time to rebuild a new financial system
from the ground up.

11. 1.
It must be durable, which is why we don’t use wheat or corn or rice.
2.
It must be divisible, which is why we don’t use art work.
3.
It must be convenient, which is why we don’t use lead or copper.
4.
It must be consistent, which is why we don’t use real estate.
5.
It must possess value in itself, which is why we don’t use paper.
6.
It must be limited in the quantity that is available, which is why we
don’t use aluminium or iron.
7.
It should have a long history of acceptance, which is why we don’t use
molybdenum or rhodium.
Gold & Silver possesses these qualities

12. "At any rate, the spook spoke the truth: cryptology
represents the future of privacy, and more. By
implication cryptology also represents the future of
money, and the future of banking and finance. (By
"money" I mean the medium of exchange, the
institutional mechanisms for making transactions,
whether by cash, check, debit card or other
electronic transfer.) Given the choice between
intersecting with a monetary system that leaves a
detailed electronic trail of all one's financial
activities, and a parallel system that ensures
anonymity and privacy, people will opt for the
latter. Moreover, they will demand the latter,
because the current monetary system is being
turned into the principal instrument of surveillance
and control by tyrannical elements in Western
governments." - J. Orlin Grabbe (1947-2008)

13. Open Source cryptocurrency
 Distributed cryptographically protected
accounting ledger
 No central authority -> does not depend on trust
to single or couple of institutions.
 Like cash, but for the internet
 1 Bitcoin = 3,520 ZAR (as on 8th Nov 2013).
 Created by pseudonym Satoshi Nakamoto in 2009
 Based on a peer-to-peer network of computers
running the Bitcoin software.
 The transactions are verified by proof-of-work
system of computers running mining software.


14. No unpredictable inflation by ‖printing more
money‖ by political decision
 Transactions travel instantly
 Send money in seconds to anyone with internet
access – with practically zero transaction costs.
 Highly anonymous, in certain conditions
 Every transaction in the public ledger
(blockchain) though
 If you memorize your private key, the only way
to steal your Bitcoins (even for the authorities) is
to torture you (or spy or hack your computer)
 Easy to use
 You can choose how to store your Bitcoins
(online / offline)


15.  Every
‖account‖ consists of the public key (=
bitcoin address) and the private key.
 Anyone who knows your public key, can send
you bitcoins.
 To spend bitcoins, you have to know the
private key.


The transaction is broadcasted to the Bitcoin
network.
The miners confirm the transactions

16.  People


But it proves it works!
And people use plain cash for the same.
 Early

adopters benefit too much
Is it really a problem?
 Bitcoin


buy guns and drugs with it!
has actually no value
Same applies to euros and dollars.
They only have value because people believe
they have value.
Many more:
https://en.bitcoin.it/wiki/Myths

17.  An


example of a bitcoin address:
14nRKoXJAUpKYYbzw6Yrqh9gW2p26zerpW
2160 (about 1048)possible addresses
 The



corresponding private key:
5HuEupX3DNFJ7UypjFtXDTm4BVuAwZtAgYf94sMA
LPyakgafVnU
256 bits (SHA256 encryption)
About 1077 possible private keys

18.  In
the process called mining, all transactions
are collected in a block. A new block is
mined in about every 10 minutes.
 For small payments or with payments with
trusted peer, 0 confirmations is usually ok.
 For large amounts, 6 confirmations is
considered safe

19.  Because
Bitcoin has no central authority, one
of the main security problems is eliminating
a double spend fraud (wherein the same
money is spent twice)
 The main innovation in Bitcoin is the
blockchain. Each full node (a computer
running the Bitcoin program) in the network
has a copy of all mined blocks
 Disrupting the system would need enormous
computing power

20.  Understand


how bitcoin works
Every transaction from address to address is
public.
How much and when = public, who owns the
address = not public (can be analyzed, though).
 Create
a new address for every transaction
 Use mixing services
 The larger the transactions, the easier it is to
carry out traffic analysis

21.  General
ledger containing every Bitcoin
transaction ever made
 Processing power securing the ledger using
mathematics (cryptography)
 How are Bitcoins released:

22. 





It is scarce (there will never be more than 21 million)
It is secure: it can’t be counterfeited or multiplied at will,
and it allows for as much privacy as the user desires
It is extremely transportable: you send it virtually
instantaneous, essentially for free, to anywhere in the
world
Flexible: every single Bitcoin can be subdivided into
millions of smaller parts, and all Bitcoins are
interchangeable
Extremely durable: the Bitcoins in your wallet will
disappear only after every single copy of the Blockchain on
the planet has been erased—and remember, the QT client
alone has been downloaded already over 3 million times
And finally, unlike that of fiat currencies, the supply of
Bitcoin is steady and predictable

23.  How



do I get a Bitcoin?
Step 1 – Create a Wallet
Step 2 – Buy Bitcoin on an Exchange
Step 3 – Use it on your own terms!

33. System D (Informal Economy)
 The unbanked (Africa)
 Remittances (PayPal, Western Union)
 Protocol extension with APIs

Robotics
 Google Glasses
 Decentralised Exchanges


Decentralised Securities Exchanges
BitShares, Coloured Coins, Mastercoin
 End of Wall Street?

Pension funds
 Contracts, Wills, Charity..


34. Man is free at the moment he wishes to be. ~Voltaire

36. Bitcoin
http://www.weusecoins.com/en/
http://blockchain.info/
http://www.reddit.com/r/Bitcoin
http://www.youtube.com/watch?v=Lx9zgZCMqXE
http://www.slideshare.net/jonwaller0/what-isbitcoinen
Economics & the current Financial system
http://buybitcoins.us.com/bitcoin-london-2013-cryptocurrency-is-the-future-of-moneybanking-and-finance-tuur-demeester/
http://www.dw.de/china-urges-de-americanized-new-world-order/a-17159054
http://theeconomiccollapseblog.com/
http://www.zerohedge.com/
http://www.themoneymasters.com/the-money-masters/famous-quotations-onbanking/