Blockchain, Bitcoin, Mining - My Product School Presentation
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My Talk at the Product School - Blockchain and Bitcoin basics & Future valuation. Is mining worth it? It bitcoin decentralized?
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Blockchain, Bitcoin, Mining - My Product School Presentation
- 1. Bitcoin & Blockchain Aarthi Srinivasan, Director Product Management Thanks to Satyajit Gupte, Lead Data Scientist /Productschool @ProdSchool ProductmanagementSV Aarthi Srinivasan 1
- 3. Hello Aarthi Srinivasan 3 • Leads Personalization at Target • 15+ years of experience in managing products • Academic Background: MBA from Wharton, MS in Computer Science from Stony Brook University and BS from Madras University • Satyajit is a data scientist at Target • Loves building things with code and machine learning. • Currently obsessed about learning the technology behind crypto
- 4. What to expect today? 4 • Origin and philosophy of Bitcoin BTC • Key Terms and Definitions • Mining Protocol • Technology <BREAK> • Example applications • Value of Bitcoin Goal: Provide sufficient information to create an informed view Aarthi Srinivasan
- 5. Too Big to Fail Aarthi Srinivasan 5
- 6. What is a Bitcoin? 6 • The Genesis Block by Satoshi Nakamoto – 3rd Jan 2009 “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks“ Aarthi Srinivasan • Type of 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 – Google Dictionary Eliminate the intermediaries Hash code method with a robust “proof-of-work” crowdsourcing protocol
- 7. Bitcoin protocol steps Aarthi Srinivasan 7 Start: Broadcast new transaction Verification: User Signature & funds Proof-of-work: Prevent double spending Mining: Earn bitcoin rewards Recheck transactions & start new block 1 2 34 5
- 8. Search Engine Account e.g. ABC wants user John to use its search engine and will pay him 1 bitcoin (or some fraction of a bitcoin as a reward) in return for using the search and sharing his intent Transfer coins / action to initiate transfer Aarthi Srinivasan 8 1 John shares his intent with decentralized search engine Search engine pays John’s wallet 1 bitcoin CONCEPT 1: Banking state of this transaction APPLY({ ABC: BTC 100, John: BTC 1 },"send 1 BTC from ABC to John) = { ABC: 99, Bob: 2} CONCEPT 2: Possible Smart Contract When John searches, the Search Engine can automatically execute a code which transfer’s money to John’s wallet. Smart Contract is code that is executed in a contract account when a pre-determined action or rule is met. Search Engine Account ABC Wallet id: 0x55----A-- ------4EA3cf456700eDBa212531x User 1 - Search Account owner User John uses ABC. Johns ID: 0x37----C--------4DF3cf407790eCBa237521x Hong Kong Travel User 2 - John’s intent
- 9. Verify that the account (ABC) who initiated the fund transfer is legitimate and has Unspent Transaction Output (UXTO i.e. user is who she claims and has sufficient funds to transfer) Verify the user who initiates transfer is legitimate & has funds Aarthi Srinivasan 9 2 ABC’s Public key TX: 1 BTC to John Previous Hash ABC’s Signature (Math function (Sf, Xr)) Search Account State – User 1 Recipient Nodes (with bitcoin s/w) Verify the signature and the account has enough UXTOs If Xr of the sender ≡ Xr of the receiver then signature is valid John’s Public key TX: 1 BTC received Previous Hash ABC’s Signature verified (Math function (Sf, Xr)) Hong Kong Travel John’s Tx State – User 2 CONCEPT 3: BTC client to validate user signature and error if input amount < output Verify sender signature by confirming mathematically generated random point Xr ≡ Xr generated by the receiver APPLY({ ABC: BTC 0, John: BTC 1 },"send 1 BTC from ABC to John) = ERROR
- 10. Verify if originator did not sign any transactions previously (double-spending) by being aware of all previous transactions in order to confirm absence of double-spending transactions. Proof-of-work: Prevent double-spending Aarthi Srinivasan 10 3 CONCEPT 4: Proof-of-work Confirm a block with new transactions by generating a hash by incrementing the nonce without shortcuts. High compute power Mining Rig or solo miners ABC’s TX Collect new signed verified transactions John TX & more new Txs …. SHA256 HASH Find the hash for the block by incrementing a nonce The hash should be less than a dynamically adjusted target so a hash can be found approximately every 10 minutes ABC’s TX WINNING BLOCK 123 John TX & more new Txs Won – Found the hash Timestamped & added block Nonce Prev block reference / Previous hash Timestamp
- 11. The winning node which found the hash for the block earns a predetermined number of bitcoins (currently 12.5) as a reward Mining Bitcoins from nothing as a reward for proof-of-work completion Aarthi Srinivasan 11 4 CONCEPT 5: MINING & HALVING Mining: Earning bitcoins from “nothing” as reward for spending electricity & compute power for finding the hash for the new block Halving: Rewards get halved in value after every 210,000 blocks. ~ 122,298 blocks remaining before next halving to 6.25 bitcoins. ABC TX WINNING BLOCK 123 John TX & more new Txs Won – Found the hash Timestamped & added block Nonce Prev block reference / Previous hash Timestamp Winning user awarded 12.5 bitcoins 50 bitcoins 25 bitcoins After 210,000 blocks After 210,000 blocks (current) 12.5 bitcoins Halving mining rewards Maximum halving is 64 times leading to total of 21MM Bitcoins Satoshi’s genesis block is about government’s monetary policy of injecting cash into economy and he probably wants to prevent printing new money indefinitely for bailouts
- 12. The winning block is broadcast causing nodes to recheck the transactions and proof of work in the block. If it has issues the winner loses the mined bitcoins and the block is available for mining again. Recheck transactions Aarthi Srinivasan 5 CONCEPT 6: Linked blockchain After verifying the winning block, nodes work on the new block which links to the previous verified block with a previous hash value ABC’s TX WINNING BLOCK 123 John TX & more new Txs Won – Found the hash Timestamped & added block Nonce Prev block reference / Previous hash Timestamp Are Txs & proof -of- work correct ? No Release reward bitcoins and block proof-of-work begins. Yes New TX 1 NEW BLOCK New TX 2 & more new Txs Restart block creation & proof-of- work Nonce Prev block reference / Previous hash Timestamp 12
- 13. Key Terms Block / Blockchain A block is a collection of verified new transactions that generally includes a timestamp, link to previous block (prevhash) and pointers (Merkle tree root hash) to transactions in the block ICO – Initial Coin Offering Similar to stock offering it is the method of offering decentralized ownership for a company with crypto coins. E.g. SingularityNet offered ownership stake with ICO “AGI” tokens. Currently there are ~10,000 AGI tokens each valued at $0.4137 @ 0.000530 Eth Smart Contracts Code that gets executed when a message hits the contract account. This code can read and write to internal storage, send messages or create contracts. (computational steps limit specified) UXTO – Unspent Transaction Outputs Unspent transaction outputs (e.g. coins) that have been minted but not yet used or spent. Each UTXO has a denomination (value) and a owner defined by a cryptographic public key e.g. 0x55…A….4EA3cf456700eDBa212531x Mining The computer node which completes the proof-of-work first to generate a block’s hash is the winning node. The node mines (creates) 12.5 bitcoins as reward for its effort. Nonce A nonce is an arbitrary number that can only be used once E.g. You find your hash for the proof-of-work by incrementing this nonce methodically BTC Hash & Hash rate In general, a hash is an index for a huge data set. A bitcoin hash is a algorithmically generated number to identify a particular block. Hash rate is the number of hashes per second Proof-of-work Method to verify that the sender has not double-spent his amount in various transactions by confirming absence of transactions. E.g. User cannot spend all his 100 bitcoins and pay himself the same 100 bitcoins. Aarthi Srinivasan 13
- 15. i love cheeseburgers 5ce4a6b8f3a052a5f2643f 0bf664834fa80a838b12a d037f1146927543f9d266 i love cheeseburgers? 343581b33a39231c7709 dbe5221ce579b0df0ddb6 a04a1ce4169eadf1ee0cc 20 SHA256 SHA256 Byte string of any length 256 bits (64 hex chars) http://www.xorbin.com/tools/sha256-hash-calculator 15
- 16. Lots of Bit twiddling 16
- 17. Out comes a hash 1100101010010111100000010001001011001010 0001101110111101110010101111101011000010 0011000110110011100110100010001111011100 0100110110100111100001101110111111111000 0001010001111100010011100111001010111001 1000000001110111100001011010111111101110 0100100010111011 17
- 18. So what’s special about SHA-256 ? ? 95b814a7bcbbf083e74 48fbf1e252ea2e2597db 51af2fbff72379c4fb822 2bd6 1st Property: Impossible to reverse 18
- 19. So what’s special about SHA-256 ? A B SHA256 Same hash value 2nd Property: Impossible to find collisions 19
- 20. Lets Make a Puzzle ? 0000000000000000006 bb31fdade23f5aa6d8b4 b30c9844d14aa908965 c2dd66 Find a byte string that gives leading zeros in the hash value SHA256 20
- 21. The puzzle in Bitcoin ? Transactions + metadata 18 leading zeros in hash nonce SHA256 Note: Its 18 today, changes depending on how many people are trying to solve this puzzle 21
- 22. We know its impossible to reverse a hash So, we cant directly hope to find data that gives 18 leading zeros in the hash How to solve the puzzle ? 22
- 23. Answer: Try all values of data until we find the solution 23
- 24. Created UNIX 24
- 25. What are the odds of finding a solution? 25
- 26. = Grains of sand on Earth 26
- 27. We have to try a lot = PROOF OF WORK Finding a solution = BITCOIN MINING What are the odds of finding a solution? 27
- 28. Don’t try this at home Modern CPU: 20 Million hashes per second Several 100,000 years to mine a block 28
- 29. Total Hash Rate ~ 25 Million Trillion 29
- 30. Bitcoin mining pool Mine a block ~ 40 mins Largest pool ~ 5 Million Trillion Hashes/sec 30
- 31. Is this decentralized ? 31
- 32. How much power does the entire BTC network use ? 32
- 33. 1 House = 3000 watts 1 Train = 5 Million Watts 1 Coal Plant = 2000 Million Watts 33
- 34. Largest Nuclear Reactor in USA The Palo Verde generating station is the largest power plant in the United States by net generation. Its average electric power production is about 3.3 gigawatts (GW), and this power serves about four million people. 1 Giga Watt = 1 Billion Watts 34
- 35. Lower bound Total Hash Rate: 22 Peta Hashes/sec 13.5 TH/s = 1.6 million antminers 1275 watts for each = 2 GigaWatt 35
- 36. Upper bound 12.5 BTC mining reward every 10 mins = $125,000 => $200 per second out of thin air Assume all $200 used to buy electricity Electricity costs in USA ~10 cents per kWH 10 cents buys 60*60*1000 = 3.6 M Joules, 3 cents buys 1 MJ $200 = 7 GigaWatt 36
- 37. Is this wasted energy ? Takes lots of electricity to produce 1 Block If someone wants to cheat they have to spend lots of money to mine their own bad blocks. Have to keep mining bad blocks, since good nodes only build on good blocks 37
- 39. Okay, so what? Aarthi Srinivasan 39
- 40. 40 Next 5 and 10+ years Identity, Hardware & Platforms • Identify Platforms • Blockchain standardized platforms • Cryptocurrency regulated • Mining Rig hardware Crypto devices & Apps • Crypto wallets, phones / Notebooks • Open source blockchain apps to collect data • All your phone apps using blockchain e.g. search • ~300 ICOs in 2017 AI application with smart contracts • Finance protection contracts • Document fraud detection • iOT safety & security (Pollution monitoring, Museum art) • Autonomous vehicles • Medical AI contracts • Decentralized Organizations (Refugee crisis, Common Education Standards, Bot sharing) 5 10 Aarthi Srinivasan Company Token Description Civic CVC Unified protected identity with blockchain Singularity Net AGI Connect siloed AI algorithms and decentralize in a blockchain (Ben Goertzel – OpenCog Open source AI platform; Think different bots working with each other Finney Smartphone SRN Cyber protected phone with cryptowallet using open-source blockchain technology Provenance Private Supply chain sourcing and tracking ID Medrec (MIT) Private Blockchain authenticated by medical researchers to store secure medical records Enigma (MIT) Private Blockchain platform with encryption of data & decentralized validation Nucleus Vision (HBS) Private - nCash Airdrop Opt-in loyalty / information sharing with customer device identification
- 41. How do we value nothing? Aarthi Srinivasan 41 • There were approximately 300 ICOs (public coin offerings) valued at nearly $4B in 2017 • Bitcoin value is speculative as it is mined from nothing as it does not offer goods or services • Value is based on the underlying data in the chain and the length of the verified blockchain Traditional Stock Valuation using Discounted Cash Flow for companies such as Apple Free Cash Flow = Earnings before Income Taxes EBIT(1-t) + Depreciation & Amortization – Changes WC – Capital Expenditure Value of the Data in chain e.g. Singularity Net AI Length of verified block e.g. 505,000 blocks long (as of Jan 31st, 2018)+ My Bitcoin Estimation = Value driven by demand ASSUMPTION: Regulation of Bitcoin and support by government agencies
- 42. Things to consider 42 3. Identify a real use case with blockchain where the trust / reliability without duplication is mission critical (at the expense of latency) 1. Understand that blockchain may disrupt financial, healthcare, provenance sourcing and identification sectors 2. Know your company’s business strategy and allocate 10% for innovation in this space 4. Create a ”test & learn” plan with key hypothesis (Quarterly plan) 5. Lean & MVP Test, Learn, Pivot /Launch 6. Share learnings after every iteration Aarthi Srinivasan
- 44. Ethereum & Decentralized Autonomous Organizations Aarthi Srinivasan 44 • Ethereum accounts can be externally owned accounts (to send / receive messages) or contract accounts (to execute contracts in addition to sending/receiving messages) • Contract accounts can execute code and create contracts. e.g. Use blockchain search engine “ABC” and earn 0.05 BTC for every search • First Class Citizen property in Ethereum exists where contract accounts are equal to the external accounts and can take on many roles based on their contract code • The general concept of a "decentralized organization" is that of a virtual entity that has a certain set of members or shareholders which, perhaps with a 67% majority, have the right to spend the entity's funds and modify its code. • Ethereum platform allows you to create your own new blockchain, modify the existing bitcoin chain with scripts and/or create meta-protocols on top of blockchain protocol • Given the power of Ethereum Contracts, we can create ”smart contracts” that can execute code when it receives a message. E.g. a search engine user gets money for every search on that engine
- 45. What is a blockchain? Aarthi Srinivasan 45 A digital ledger in which <cryptocurrency> transactions are validated by a decentralized network of nodes (computers), chain linked and recorded chronologically Each block contains the previous block’s hash key, nonce, timestamp and transactions. Concept of validated proof-of-work for each transaction Source - Bitcoin-paper Bitcoin block chain is approximately 505,000 blocks long (as of Jan 31st, 2018) Bitcoin Vs. Ethereum Platform Permissionless vs. Persmissioned platforms (Ethereum vs. Hyperledger Fabric or Corda)
- 46. How is data stored in the block? Aarthi Srinivasan 46 In order to save space in the verified blocks, the transaction data is stored in a Merkle tree with the root hash of the data
- 47. Verification – Bitcoin paper Aarthi Srinivasan 47
- 48. Proof of Work – Bitcoin paper Aarthi Srinivasan 48
- 49. Protocol – Bitcoin paper Aarthi Srinivasan 49
- 50. Proof-of-work– Ethereum paper Aarthi Srinivasan 50
- 52. Ripple vs Ethereum vs Bitcoin Aarthi Srinivasan 52 Technical differences Ethereum can be considered slightly different to the other two currencies, being geared towards complicated interactions between several parties rather than consumer payments. CNBC has noted that it provides numerous potential uses, such as reconciliation, enabling smart contracts to be distributed on the Ethereum network. While Ripple is only the fourth largest cryptocurrency in terms of market capitalization, being worth $36 billion currently, it has advantages over both Bitcoin and Ethereum which could provide an explosion in is value in the foreseeable future. Ripple is pre-mined, with one hundred billion units in existence, twenty billion of which are retained by the creators of the currency. This differs from Bitcoin in particular, which is entirely based on the mining of its network to a fixed rate of 21 million potential Bitcoin units. The distributed platform provided by Ripple is particularly highly regarded, as it is tailored towards the financial service sector. “The ability to transfer from one currency to another instantly becomes possible with the XRP as the intermediary currency. Clearly, there’s a lot of excitement surrounding Ripple,” The Motley Fool noted. Max number of coins, Speed, Smart Contract capability are all differentiators
Editor's Notes
- I am Aarthi Srinivasan, a product enthusiast who loves utilizing technology to solve world problems. I lead the personalization team at Target which I describe as bringing BB theory Shelden exposure to the business and customer world beyond our data worlds. When I started exploring the bitcoin / blockchain world, I had several great discussions with talented engineers and decided to simplify the complexities of the whitepapers / discussions and present my thesis on what the value / direction. This is just the start of the innovation journey for us and we hope to crack it further.
- You will have 2 sections in this talk – First half is all about the why, what and how it works? The second section is about the future and valuation. At the end of Today’s talk, I hope you will understand how the Bitcoin protocol works and how the blockchain helps secure transactions. You will understand some key terms You will also learn about mining and some facts around it Satya will talk through some technical concepts (We tried to make it fun) Then I will share my crystal ball view and try to address the valuation
- In 2008 we have the big mortgage crisis and I was in the center of the storm living in New York city and my husband’s investment bank Bear Stearns was the first to crash so this is close to my heart. It was literally like the Dominoes where every friend would call and talk about losing their jobs. It was crazy. Then the government bailed them over with 700 BB. While this saved the collapse it also did not rectify the loop holes and issues in the system. Few months ago Wells fargo story
- Why is this relevant – With a system like this, Satoshi must have lost money or felt the pain to crete his first genesis block with the message about the bailout for banks. His goals were idealistic to eliminate government intermediaries, banks, legal behemoths etc and have equal rights for everyone to access digital currency that can be earned with equality in any corner of the world (totally decentralized) You will see how we are far away from this goal due to our capitalistic markets.
- His paper talks about the details of the bitcoin and blockchain. I have simplified the protocol or process with 5 steps and will go through each one in detail. Consider a user case where a blockchain based search engine wants users to use its search engine to get the data and rewards them for every search with its tokens. The steps that are followed are: Broadcast transactions i.e. paying the user from search engines account, Verify the user’s signature / funds, verify the user has not double spent the money (paid you and paid himself) using the concept of mining & proof of work and then the final step of rechecking transactions and committing before starting a new block,
- You can either choose to transfer an amount to someone with a message or respond to an action that will cause the transfer Step 1 – Search account will pay whenever anyone uses their search engine Step 2 – John searches and shares his intent to travel to Hong Kong Concept 1 – This is how you represent bitcoin transactions as a state transition diagram Concept 2 – There could be a possible smart contract where the user gets paid everytime he searches
- We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee or node recipient can verify the signatures to verify the chain of ownership. The bitcoin client software on the nodes e.g. bitcoind, bitcore does this check How is this done? Verification is done by making sure the random number of the sender matches with the random number generated by the receiver (software does this using the signature factor equation) The sufficient funds are verified by making sure the output is less than the input amount https://www.cryptocompare.com/wallets/guides/how-do-digital-signatures-in-bitcoin-work/ Sf – Signature Factor Xr – Random Rumber Software: bitcoind, bitcore client Inputs & Outputs Bitcoin works on the concept of discrete inputs and outputs not spending part of a balance. All transactions have as their input a reference to a previous unspent output. The transaction records one or more new outputs (which are referenced in the inputs of some future transactions). Outputs are "spent" when they are referenced in a new transaction. Outputs can only be unspent or spent, they can't be partially spent. Wallet balance (or address balance) is an abstraction to help us humans and make Bitcoin more like conventional payment systems. Balances are not used at the protocol level. When the wallet indicates your confirmed balance is 1.2 BTC it is saying that the sum of the value of all unspent outputs in the blockchain which correspond to public keys it has the private key for total 1.2 BTC. In other words the wallet is computing the total value of the outputs which it can spend which requires a) the output be unspent and b) the client has the private key necessary to spend it. https://www.cryptocompare.com/wallets/guides/how-do-digital-signatures-in-bitcoin-work/ Sf – Signature Factor Xr – Random Rumber Software: bitcoind, bitcore client Inputs & Outputs Bitcoin works on the concept of discrete inputs and outputs not spending part of a balance. All transactions have as their input a reference to a previous unspent output. The transaction records one or more new outputs (which are referenced in the inputs of some future transactions). Outputs are "spent" when they are referenced in a new transaction. Outputs can only be unspent or spent, they can't be partially spent. Wallet balance (or address balance) is an abstraction to help us humans and make Bitcoin more like conventional payment systems. Balances are not used at the protocol level. When the wallet indicates your confirmed balance is 1.2 BTC it is saying that the sum of the value of all unspent outputs in the blockchain which correspond to public keys it has the private key for total 1.2 BTC. In other words the wallet is computing the total value of the outputs which it can spend which requires a) the output be unspent and b) the client has the private key necessary to spend it.
- After we verify the user is valid and has sufficient funds, we have to make sure he is not signing the same amount twice with the same balance. For example assume the user has 100 BTC as the initial state and when he gives someone 20 BTC he has to adjust the total state to 80 BTC. If the tries to redo the transaction with the same 100BTC state the nodes will detect this transaction and reject the later one. Nodes can make sure that this is valid by checking for absence of other transactions using the same initial state Once you determine the absence of double-spending you try to increment a counter (nonce random number) and the hash (merkle root hash) till it yields a value that is less than a dynamic target (it should have a leading set of zeros). This concept of finding this hash value for the block with the leading set of zeros will be successful once every 10 minutes. The target number is adjusted depending on the number of mining nodes or computers so that you can find a hash every 10 minutes. The interesting part of the block validation algorithm is the concept of "proof of work": the condition is that the SHA256 hash of every block, treated as a 256-bit number, must be less than a dynamically adjusted target, which as of the time of this writing is approximately 2^190. The concept of decentralized digital currency, as well as alternative applications like property registries, has been around for decades. The anonymous e-cash protocols of the 1980s and the 1990s, mostly reliant on a cryptographic primitive known as Chaumian blinding, provided a currency with a high degree of privacy, but the protocols largely failed to gain traction because of their reliance on a centralized intermediary. In 1998, Wei Dai's b-money became the first proposal to introduce the idea of creating money through solving computational puzzles as well as decentralized consensus, but the proposal was scant on details as to how decentralized consensus could actually be implemented. In 2005, Hal Finney introduced a concept of "reusable proofs of work", a system which uses ideas from b-money together with Adam Back's computationally difficult Hashcash puzzles to create a concept for a cryptocurrency, but once again fell short of the ideal by relying on trusted computing as a backend.
- The node (Wallet account associated with it) which finds the hash first will broadcast it to the system. The winning node will be given a reward of 12.5 bitcoins made from thin air for his efforts in finding the hash. This concept of creating the coins as a reward is called mining. When bitcoins were founded we had 50 coins as a reward and every 210,000 blocks it gets halved in value and we have 2 of those. Currently it is at 12.5 coins. This process will happen 64 times according to the protocol leading to a total of 21MM bitcoins. Why is there a limit – guess? And Why 21 MM is anyone’s guess? Ethereum as an alternate platform does not have limits but the exponential difficult compute time of solving this puzzle will prevent it from going being 100 MM Ether coins. (97MM supply) Bitcoin inflation rate per annum at next block halving event: 1.80%. Bitcoin inflation per day (USD):, $14,508,540. Bitcoin inflation until next blockhalf event based on current price (USD):, $12,321,982,118. Total blocks: 507,702. Blocks until mining reward is halved: 122,298. Total number of block rewardhalvings: 2. While Ethereum platform does not have explicit limits, the Slower network = longer block times = less ETH rewards. Hence, in the foreseeable future, the supply will not go far above 100 million due to the ice age concept of exponentially difficult compute time.
- Given the winning block received 12.5 BTC, there in incentive to recheck the transactions and proof-of-work to make sure that it is accurate. If it is proven wrong, the bitcoins are up for grabs again because the block needs to be mined. If the transactions and proof-of-work are correct, then the block is confirmed and the generation of a new block begins. Confirming the 5 steps – Broadcast Verification of signature & fund sufficiency, proof-of-work hash preventing double-spending, mining your rewards from the proof-of-work and reverification to create the block Bitcoin inflation rate per annum at next block halving event: 1.80%. Bitcoin inflation per day (USD):, $14,508,540. Bitcoin inflation until next blockhalf event based on current price (USD):, $12,321,982,118. Total blocks: 507,702. Blocks until mining reward is halved: 122,298. Total number of block rewardhalvings: 2. While Ethereum platform does not have explicit limits, the Slower network = longer block times = less ETH rewards. Hence, in the foreseeable future, the supply will not go far above 100 million due to the ice age concept of exponentially difficult compute time.
- UTXO – Ethereum paper: unspent transaction outputs" or UTXO) that have been minted and not yet spent, with each UTXO having a denomination and an owner (defined by a 20-byte address which is essentially a cryptographic public key[1]). Once step (1) has taken place, after a few minutes some miner will include the transaction in a block, say block number 270000. After about one hour, five more blocks will have been added to the chain after that block, with each of those blocks indirectly pointing to the transaction and thus "confirming" it. At this point, the merchant will accept the payment as finalized and deliver the product; since we are assuming this is a digital good, delivery is instant. Now, the attacker creates another transaction sending the 100 BTC to himself. If the attacker simply releases it into the wild, the transaction will not be processed; miners will attempt to run APPLY(S,TX) and notice that TX consumes a UTXO which is no longer in the state. So instead, the attacker creates a "fork" of the blockchain, starting by mining another version of block 270000 pointing to the same block 269999 as a parent but with the new transaction in place of the old one. Because the block data is different, this requires redoing the proof of work. Furthermore, the attacker's new version of block 270000 has a different hash, so the original blocks 270001 to 270005 do not "point" to it; thus, the original chain and the attacker's new chain are completely separate. The rule is that in a fork the longest blockchain (i.e.. the one backed by the largest quantity of proof of work) is taken to be the truth, and so legitimate miners will work on the 270005 chain while the attacker alone is working on the 270000 chain. In order for the attacker to make his blockchain the longest, he would need to have more computational power than the rest of the network combined in order to catch up (hence, "51% attack"). Page 8 ethereum.
- Metadata = hash of previous block Transcations = merkle root of txs
- Per month for house
- Does not account for cooling costs Assumes everyone is using s9
- Does not account for cooling costs Assumes everyone is using s9
- Does not account for cooling costs Assumes everyone is using s9
- Identify the standardized platform for blockchain, Solve for secure anonymous identity management to prevent crypto currency fraud and invest in hardware to support mining. Lobbying to get crypto regulation Second wave after the platform stabilizes, we will have our standard applications in the blockchain like search, chats, Once we have the applications, we will have super power applications with smart contracts. Fines for corporation for pollution monitoring automatically if the electronic reading is high Intelligent Individuals – The computer is analyzing sentiment, emotion and recommending right action or learning function (read ABC) AI contracts - biometrics fraud detection (National security); Israeli security will look at your eyes and detect if you are lying . Entry / Exit and keep it secure in the block FLP inconsitency – Reliability, Consistency and Latency will not be possible together. Compromises exist.
- The concept of decentralized digital currency, as well as alternative applications like property registries, has been around for decades. The anonymous e-cash protocols of the 1980s and the 1990s, mostly reliant on a cryptographic primitive known as Chaumian blinding, provided a currency with a high degree of privacy, but the protocols largely failed to gain traction because of their reliance on a centralized intermediary. In 1998, Wei Dai's b-money became the first proposal to introduce the idea of creating money through solving computational puzzles as well as decentralized consensus, but the proposal was scant on details as to how decentralized consensus could actually be implemented. In 2005, Hal Finney introduced a concept of "reusable proofs of work", a system which uses ideas from b-money together with Adam Back's computationally difficult Hashcash puzzles to create a concept for a cryptocurrency, but once again fell short of the ideal by relying on trusted computing as a backend. bitcoin.exchange.com Nonce is a 32 bit arbitrary random number that is typically used once. In Bitcoin's mining process, the goal is to find a hash below a target number which is calculated based on the difficulty. Proof of work in Bitcoin's mining takes an input consists of Merkle Root, timestamp, previous block hash and few other things plus a nonce which is completely random number. If the output results in hash is smaller than the target hash you win the block and the consensus is reached. You need to brute force all possible nonce in order to luckily find a hash smaller than the target hash. It could literally be any number between 0 and 2^31