Blockchain & Bitcoin At Opera Lunch Session – Boston By Viet Le This document discusses blockchain technology and bitcoin. It provides a primer on public key cryptography and how it enables secure communication through puzzles and encryption. It then explains how blockchain uses these principles to create a distributed public ledger to record bitcoin transactions through a process called mining. The document notes debates around bitcoin and discusses factors that could influence its value and adoption, such as inflation resistance, decentralization, and potential to replace a portion of fiat currencies in circulation.

1. Blockchain & Bitcoin
At Opera Lunch Session – Boston
By Viet Le

2. Events
 JP Morgan Chase & CO. chief Jamie
Dimon: bitcoin is “fraud” and anyone
who buys bitcoin is “stupid”
 Neil Dwane of Allianz Global Investors
said it’s a “scam for criminals around
the world”
 ….
 The former chief economist of the
World Bank - Joseph Stigliz: Bitcoin
'Ought to Be Outlawed,'

3. Objectives – To answer the questions
 How can bitcoin store the “values”?
 If yes, what could be the value of bitcoin?

4. Crypto Primer
Public Key Cryptography - RSA - ECDSA

5. Merkle's Puzzles – Public Key
Cryptography
 Alice and Bob wish to communicate securely
 Bob creates 10 puzzles:
 All must be possible for Alice to solve with a moderate amount of time.
 The puzzles are in the form of an encrypted message with an unknown key
 The key must be short enough to allow a brute force attack
 Bob sends all of the puzzles to Alice
 Alice chooses one randomly, and solves it, and gets K and ID
 Alice encrypts her message with K and send to Bob encrypted message + ID
 Bob finds the secret key paired with that ID to deciphers Alice's message

6. RSA Public/Private Keys
 Take the prime numbers 13 and 7
 13 * 7 = 91
 Let's take public encryption key = 5
 Private key = f(91, 5) = 29
 f = Extended Euclidean Algorithm

7. RSA Algorithm
 Encrypt the C = 67 (ASCII)
 Multiply it by itself pub-key times (5
times) to get the encrypted value
 67×67 = 4489 = 30
 Since 4489 is larger than max, we
have to wrap it around. We do that
by dividing by 91 and taking the
remainder.
 4489 = 91×41 + 30
 30×67 = 2010 = 8
 8×67 = 536 = 81
 81×67 = 5427 = 58
 → encrypted version of 67 is 58.
 Decrypt: the scrambled 58
 Multiply it by itself priv-key times (29
times)
 58×58 = 3364 = 88 (remember, we
wrap around when the number is
greater than max)
 88×58 = 5104 = 8
 …
 9×58 = 522 = 67
 → decrypted version of 58 is 67.

8. ECDSA Algorithm: y2 = x3 + ax + b

9. Google ECC
 max: 115792089210356248762697446949407573530086143415290314195533631308867097853951
 curve: y² = x³ + ax + b
 a = 115792089210356248762697446949407573530086143415290314195533631308867097853948
 b = 41058363725152142129326129780047268409114441015993725554835256314039467401291
 Facts:
 Breaking a 228-bit RSA key requires less energy to than it takes to boil a teaspoon
of water. Comparatively, breaking a 228-bit elliptic curve key requires enough
energy to boil all the water on earth.
 For this level of security with RSA, you'd need a key with 2,380-bits
 ECDSA signature with a 256-bit key is over 20x faster than an RSA signature with a
2,048-bit key

10. Blockchain Technology
Bitcoin as the side product

11. Blockchain - Tamper-proof distributed
public ledger that manages transactions

12. Bitcoin Wallet

13. Hot Wallet vs. Cold Wallet

14. Bitcoin transactions

15. https://blockchain.info/

16. Blocks

17. Mining
Mining = Hash(blockheader, Nonce) < 0.00000000000000000000000000…001
Next difficulty estimate: 1,473,320,706,374

18. Block header – Bit and Byte

19. Consensus

20. Blockchain – con’t

21. Mining In Old Days

22. Mining nowsadays

23. Genesis Block & Coinbase Transaction

24. Limited Money Supply

25. Fork

26. Happy Ending

27. 51% Attack

28. Where Does Money Come From?

29. Gold Standard: 35 USD = 1 once

30. Removed Gold Standard

31. Dollar Creation

32. US National Debt

33. Would the same “Nixon Thing”
happens to Bitcoin ?

34. Hard Forks

35. Free Coins

36. Why Can’t It Be?
 No one controls bitcoin
 No way to ban bitcoin
 The unstoppable power of
leaderless
 Decentralized vs Centralized
Network

37. What Makes The Value of Bitcoin?
 Historical electric power consumption on mining activities
 Inventions behind blockchain technology
 Like real estate, it is Inflation free
 After all:
 It is NOT about the product, it is about FREEDOM.
 Freedom of Money

38. Food For Thought
 Will US National Debt Go To The Moon ?
 If Yes, then Bitcoin also goes to the Moon
 What if bitcoin would replace 15% of dollars in circulation?
 $21 Trillion x 15% / 21 Million BTC = $150,000 / BTC
 What if bitcoin become world currency?
 1 BTC = $500,000 USD

39. Opera Solutions - Big Data Analytics on
Block-chain
 First time in the history all the currency accounts and transactions are
available publicly
 Signals for the Price Trend Prediction ???
 Growth rate of the newly created wallets
 Growth rate of the small value transactions
 Movement of “institution wallets”
 Growth rate of the global hashing power