This document provides an introduction and overview of blockchain and cryptocurrencies. It begins by discussing cryptocurrencies in the news in 2017 and 2018. It then defines cryptocurrencies as digital currencies that use encryption techniques to regulate currency units and verify fund transfers outside of central bank control. The document outlines how blockchain and cryptocurrencies started with Bitcoin in 2009, and discusses some other major cryptocurrencies. It then explains how blockchain works through a decentralized record of transactions held on many computers using encryption and incentives. The document concludes by discussing how to get and protect some cryptocurrencies.

1. BLOCKCHAIN
INTRODUCTION
NW London Blockchain Meet Up
Russell Weetch - UrbanCohort.com

2. IN THE NEWS
➤ 2017 Cryptocurrency started to get coverage in the main stream
press
➤ This was due to the incredible rise in prices - Bitcoin was the talk of
the town

3. IN THE NEWS
➤ But since December - down 50%, but still further to fall?
➤ But still up on where it started 2017

4. IN THE NEWS
➤ Now, not saying the past is any guide to the future, but we all
thought we’d missed it back in 2013

5. IN THE NEWS
➤ But look at that massive 2013 increase in the perspective of time

6. CRYPTO
CURRENCIES
what are they? when did they start?

7. CRYPTOCURRENCIES AND BLOCKCHAIN
➤ All (most) cryptocurrencies are blockchains
➤ Not all blockchains are cryptocurrencies
➤ A blockchain is a decentralised technology
➤ A blockchain is managed by it’s network, not a centralised authority
➤ Bitcoin (although it introduced the blockchain as we know it today)
is an application developed on a blockchain

8. WHAT IS A CRYPTOCURRENCY?
➤ “a digital currency in which encryption techniques are used to regulate
the generation of units of currency and verify the transfer of funds,
operating independently of a central bank.”
dictionary.com
➤ so it is
➤ based on computing
➤ uses encryption techniques, but doesn’t encrypt the data
➤ the issuing is controlled by the program
➤ is outside the control of central banks and governments
➤ that doesn’t mean that elements can’t be brought under
regulation, for example trading exchanges

9. HOW DID IT ALL START?
➤ The first blockchain was the Bitcoin blockchain
➤ Designed by “Satoshi Nakamoto” in 2009 with his/her/their white
paper Bitcoin: “A Peer-to-Peer Electronic Cash System”
➤ By the way, this World changing technology was described in only 8
Pages.
➤ This was in response to the banking crash and had the aims:
➤ currency issuance without a centralised authority
➤ transactions without third party intermediaries
➤ anonymity of parties

10. IS BITCOIN THE ONLY
CRYPTOCURRENCY?
➤ No, there are now quite a few. After Bitcoin was launched other currencies have been
created, often in an attempt to improve some of the aspects of Bitcoin and to extend the use
cases of the Blockchain - as well as some just because they could. Here are some of the
main ones
➤ 2009 Bitcoin
➤ 2011 Litecoin
➤ 2013 Ripple
➤ 2014 NEO
➤ 2014 Monero
➤ 2014 Stellar
➤ 2015 Ethereum
➤ 2015 IOTA
➤ 2016 PascalCoin

11. NOT ALL CURRENCIES HAVE THEIR OWN
BLOCKCHAIN
➤ The Ethereum chain enables the creation of currencies that do not need their
own chain - these are referred to as Tokens as opposed to Coins
➤ Tokens run within Smart Contracts on the Ethereum chain (and others, such
as NEO)
➤ Some notable tokens
➤ Cardano
➤ OmiseGo
➤ 0X
➤ Tron
➤ ICON

12. THE
BLOCKCHAIN
how does it work?

13. HOW TO CARRY OUT TRANSACTIONS?
➤ How do we create transactional trust between parties unknown to
each other?
➤ In the current transactional world we use trusted third parties,
usually banks, but this
➤ makes transactions complex
➤ time consuming
➤ costly
➤ beholden to the whims of the third party
➤ we need a way to enable direct transactions without the intervention
of a third party.

14. ENTER THE BLOCKCHAIN, HOW DOES
IT WORK?
➤ There are a group of people, let’s say 10, who transact with each other.
➤ Every person keeps a record of all the transactions on a piece of paper.
By looking at the transaction list you know how much money each
account has.
➤ We can check that a transaction is valid by checking it with every other
person and they should all agree
➤ But, what if person A doesn’t have the transaction? Perhaps they just
missed it or even fraudulently didn’t record it?
➤ Then the majority view is the official view and person A will need to
take a copy from someone else so that they have a valid copy.

15. HOW DOES THE BLOCKCHAIN WORK 2
➤ So what happens when the piece of paper is full?
➤ We need to validate the sheet and ‘seal’ it
➤ What we need is to create a summary of the transactions that will be
unique in a way that can be easily validated
➤ What is used in the Blockchain is a “hash”
➤ But this is a lot of bother and people might not bother, so perhaps we
need to incentivise them, make it a competition and the winner gets
rewarded with some money
➤ What we need is something that is hard to create (non deterministic)
but easy to validate.

16. THE COMPETITION
➤ When we create a summary of the transactions as a hash we end up
with a value like this
f0ec1802e190f9f05423bf084ffc495c60a669d517d27305d43bc1279294
985e
➤ The rules of the competition are that the winner is the first person to
find a value that when appended to the transaction summary and
hashed returns a hash that starts with a certain number of ‘0’s - the
number of zeroes is called the difficulty
➤ so everyone who wants to, hashes like crazy in the race to win.

17. WHY IS IT CALLED
CRYPTOCURRENCY?
➤ If you are using encryption your information is only secure providing that the
keys you use are safe and secret
➤ So how do we transact with people without revealing our keys?
➤ The answer is Public-Private Key Cryptography (PPK)
➤ PPK gives 2 keys - a public key and a private key
➤ The magic is that:
➤ things encrypted with the public key can only be decrypted by the private key,
and,
➤ things encrypted with the private key can only be decrypted by the public key
➤ So we only share our public key and work very hard to keep our private key a
secret

18. WHY IS IT CALLED A BLOCKCHAIN?
➤ Think of our sheet of paper as a block of transactions
➤ How do we know what order the sheets come in?
➤ Our friend the hash helps us again
➤ The first entry on every new sheet after the first one is a hash of the
previous sheet
➤ This brings in the immutable concept of the blockchain
➤ If we tried to edit a transaction on the previous sheet we would need to
recalculate the hashes used in every sheet that came after that sheet
➤ Given the cost of hashing this very quickly becomes inpractiable

19. THE BITCOIN BLOCKCHAIN - A FEW
STATISTICS
➤ Block Height: just short of 534,000
➤ Current hash rate: 41,704,167,897 GH/second
➤ Difficulty: 5,178,671,069,072 - thats a hash that starts with 19
‘0’s, here’s the has for block 533,608
00000000000000000003678dcfaefd85077d9bdcb42d8c647519d794f57
78a24

20. INCREASING DIFFICULTY: THE LAST
YEAR
➤ Difficulty increases as more resources are allocated to the mining
effort - the higher the value of bitcoin the more resources are likely
to be allocated

21. INCREASING DIFFICULTY: SINCE THE
START

22. HACKING AND
RISKS
what to watch out for?

23. BLOCKCHAIN IS SAFE (ISH)
➤ The blockchain is immutable, once a transaction is confirmed on the
chain then it is too costly to change it
➤ The 51% attack: to change a transaction you would need 51% of the
mining/node power - even then that is a huge ask for Bitcoin
➤ Smaller coins have succumbed in recent months though

24. HOW DO I LOSE MY COINS?
➤ Once you have sent them, they’ve gone.
➤ If you lose your keys, you have lost your coins.
➤ If someone else gets hold of your private key, you have lost your
coins
➤ If an exchange goes bankrupt you have lost your coins

25. PROTECT YOURSELF
➤ Learn about the technology
➤ Learn to spot scams
➤ NEVER send you private keys to anyone
➤ NEVER enter your private keys into a website
➤ Only keep an amount on an exchange that you need for trading
➤ Only keep an amount in your mobile and/or web wallet that you
need for trading/transactions
➤ DO get yourself a hardware wallet like Trezor

26. GETTING HOLD
OF SOME
How to get some bitcoin

27. GETTING SOME BITCOIN
➤ Easiest way is through CoinBase - you can use your credit card
➤ You can buy Bitcoin (BTC), Ethereum (ETH), LiteCoin (LTC),
Bitcoin Cash (BCH)
➤ https://www.coinbase.com/join/530a86738f476f144a000367
➤ That link will get us both $10 once you buy $100 worth of a coin,
nice.
➤ Other cryptocurrencies and tokens: you will need Bitcoin or
Ethereum and use them as the trading pair.

28. ➤ FREE! There are quite a few “faucets” out there where you can get
some free Bitcoin - you won’t get rich though.
➤ Here’s one FreeBitcoin: https://freebitco.in/?r=3745528
➤ Mining: Buy a stake in a miner. Try out Genesis Mining:
https://www.genesis-mining.com/a/686975
➤ For an intro to buying and it’s pitfalls see my blog post
https://www.urbancohort.com/how-to-do-crypto-brotherly-advice/