Bitcoin talk by Ryan Milbourne at So Cal Code Camp.

1. Bitcoin 101
Ryan Milbourne
@RyanMilb
Bitcoin 101

2. Talk Outline
● What it is
● How it works
● Why it matters

3. What is Bitcoin?
● Decentralized Consensus Mechanism
● Open source
● Ledger of all transactions
● Created by “Satoshi Nakamoto”

4. Misc Facts
● Only 21 Million will ever be created
● Bitcoin mining network 8 times faster
than top 500 supercomputers
● Bitcoin is Protocol

5. How Transactions Work

6. 1.Private Key
2.Public Key

7. Private key
E9 87 3D 79 C6 D8 7D C0 FB 6A 57 78 63 33
89 F4 45 32 13 30 3D A6 1F 20 BD 67 FC 23
3A A3 32 62
Public Key
3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy

9. Transaction Script
scriptPubKey: OP_DUP OP_HASH160 <pubKeyHash> OP_EQUALVERIFY
OP_CHECKSIG
scriptSig: <sig> <pubKey>

13. Raspberry Pi

14. Mining Network
● Secures the network
● Distributes new coins

16. Securing the Bitcoin Network
● Verifies transactions using the blockchain
● Prevents double spending

17. Incentivized to be a good actor

18. Notes on Mining:
● 1 block mined approx every 10 min
● Last bitcoin mined in 2140
● Transaction fee
● Block Reward set at 25

19. Difficulty Self Adjusts every 2 weeks

21. Benefits of Bitcoin
● Financial Privacy
● Payment freedom
● Store of value
● Digital asset

22. For Merchants
● Lower Fees
● No Charge backs
● Less fraudulent transactions

23. Microtransactions
● One Satoshi 0.00000001
● Publishing
● Fundraising

26. Empower Billions
● 1 Billion with access to:
o International Markets
o Banking services
● More people have access to a cellphone
than sanitation (U.N. Study)
● Gets around obstacles of obtaining
a bank account

28. Disadvantages of bitcoins
● Volatility
● Ownership Distribution
● 51% attack
● Scalability

29. Price over the past 2 years

30. ...Now on a logarithmic scale

33. Scalability
● Visa 2,000 Transactions per second
● Pay Pal 40-100 tps
● Bitcoin 7 tps

35. MTGOX

36. Bitcoins are Legal
● FEC Approved
● IRS released guidelines
● SEC Approved Bitcoin Trust

37. BitLegal.io

39. Venture Capital Flow Increasing

40. BitPay’s $30m Round was the Largest
Bitcoin VC Deal to Date
• More than 30,000 total merchants
• As of January 2014, adding more than 1,000 merchants
to its network each week
• Processing $1m in bitcoin payments every day
• Processed more than $100m in bitcoin payments in 2013
• Most recent VC round valued BitPay at $160m
State of Bitcoin Q2 2014

41. Key Bitcoin Adoption Metrics
State of Bitcoin Q2 2014
Commerce Jun-14 Jun-13 YoY Δ
Wallets 5,327,688 765,039 7x
Merchants 63,000 N/A N/A
ATMs 103 N/A N/A
Unique bitcoin addresses used per day 136,152 41,271 3x
Media
Mentions in mainstream media 9,500 2,163 4x
Technology
Network hash rate (billion/second) 111,194,683 162,269 685x
Github No. of updated repositories 12,365 676 18x
Investment
Bitcoin market capitalization ($bn) 8.3 1.0 8x
Industry
VC investment over last 12 months ($m) 200.7 17.1 12x
Number of VC-backed start-ups 49 7 7x

42. Bitcoin’s Price is Now on Yahoo Finance,
Google Finance and Bloomberg
State of Bitcoin Q2 2014

43. How to get bitcoins
● Sell a service/product for BTC
● LocalBitcoins.com
● Coinbase.com
● Exchanges

44. The Future
● Crypto 2.0
● Services build on top of bitcoin
● Smart Contracts
● Decentralized marketplace

45. “I really like Bitcoin. I own Bitcoins. It’s a store
of value, a distributed ledger. It’s a great place
to put assets, especially in places like
Argentina with 40 percent inflation, where $1
today is worth 60 cents in a year, and a
government’s currency does not hold value. It’s
also a good investment vehicle if you have an
appetite for risk. But it won’t be a currency until
volatility slows down.”
David Marcus, CEO of Paypal

46. Thank you
For more info:
www.coindesk.com
RyanTMilbourne@gmail.com
@RyanMilb