Download to read offline
More Related Content
Similar to BlockChain BreakDown
BlockChain BreakDown
- 1. BLOCKCHAIN BREAKDOWN CHRISTOPHER T.BLACK NMLS 275073
- 2. WHY BLOCKCHAIN? “The blockchainwill do to the financial system what the internet did to media” -Harvard Business Review
- 3.
- 4. Before the firstacknowledged cryptocurrency got created (Bitcoin) there were a couple of attempts to create a digital currency. It all started in 1980 in the Netherlands but the first attempts had no real influence to our world today. Even Paypal can be considered as a cryptocurrency but one major difference to cryptocurrencies like Bitcoin is that Paypal doesn´t work based on the blockchain technology. After the Global economic crisis in 2008 the first ever cryptocurrency got introduced in 2009 by the unknown Satoshi Nakamoto (it is still unclear whether this is an individual or a group of people because the identity is yet to be confirmed). He released a white paper explaining the technology, concept and source code for the implementation of blockchain. This was the birth of the now worlds most famous cryptocurrency Bitcoin. (It´s funny because the first ever secured chain of blocks first was described in 1991 by Stuart Haber and W. Scott Stornetta. So Blockchain existed way before Bitcoin got created).
- 5. WHAT IS CURRENCY? WHATIS IT BACKED BY?
- 6. Nixon Ends Convertibilityof US Dollars to Gold and Announces Wage/Price Controls August 1971 With inflation on the rise and a gold run looming, President Richard Nixon's team enacted a plan that ended dollar convertibility to gold and implemented wage and price controls, which soon brought an end to the Bretton Woods System.
- 7. WHAT IS ABLOCKCHAIN?
- 8. LET’S SEE WHATGOOGLE SAYS…
- 9. ? A distributed ledger(also called a shared ledger, or digital ledger)Is a database that is consensually shared and synchronized across network spread across multiple sites, institutions or geographies. It allows transactions to have public "witnesses," thereby making a cyberattack more difficult.
- 10. DECENTRALIZATION That is thereal beauty of the blockchain and also the most important revolutionary aspect of the technology. The blockchain is unhackable.
- 11. POINTS OF FAILURE/ MAINTENANCE : CENTRALIZED SYSTEMS ARE EASY TO MAINTAIN AS THERE IS ONLY A SINGLE POINT OF FAILURE. DECENTRALIZED HAVE MORE BUT STILL FINITE. DISTRIBUTED SYSTEMS ARE THE MOST DIFFICULT TO MAINTAIN. FAULT TOLERANCE / STABILITY : CENTRALIZED CAN BE HIGHLY UNSTABLE. KILL THE LEADER AND THERE WILL BE CHAOS. KILL THE LEADER FOR A DECENTRALIZED SYSTEM AND YOU WILL HAVE MANY DECENTRALIZED SYSTEMS. DISTRIBUTED SYSTEMS ARE VERY STABLE AND A SINGLE FAILURE DOESN’T DO MUCH HARM. SCALABILITY / MAX POPULATION : CENTRALIZED — LOW SCALABILITY, DECENTRALIZED — MODERATE, DISTRIBUTED — INFINITE. EASE OF DEVELOPMENT / CREATION : CENTRALIZED SYSTEMS CAN BE CREATED REALLY FAST, YOU PICK UP A FRAMEWORK AND APPLY IT EVERYWHERE. FOR DECENTRALIZED AND DISTRIBUTED, YOU HAVE TO FIRST WORK OUT THE LOWER LEVEL DETAILS LIKE RESOURCE SHARING (TRADE) AND COMMUNICATIONS (TRANSPORT). EVOLUTION / DIVERSITY : SINCE CENTRALIZED SYSTEMS FOLLOW A SINGLE FRAMEWORK, THEY DON’T HAVE DIVERSITY AND EVOLVE SLOWLY. BUT FOR DECENTRALIZED AND DISTRIBUTED SYSTEMS, ONCE THE BASIC INFRASTRUCTURE IS IN PLACE, EVOLUTION IS TREMENDOUS.
- 12. THINK OF EVERYTRANSACTION (OR CONTRACT) AS AN UN-EDITABLE DOCUMENT
- 13. Why is aninalterable ledger important? it creates a permanent record of a valuable exchange between two people, like a bitcoin transfer, so neither party can make false claims of an exchange. Also, in theory, the shared nature of blockchain makes it un- hackable—in part because there’s no central storage that can be tampered with, and also because there’s no central authority controlling the information exchange.
- 15. To verify thetransactions in blockchain, users known as “miners” use computers to solve complex mathematical problems and when they do, they earn a cryptocurrency reward like Bitcoin, or one of the newer currencies like Ether, Lite Coin, Ripple, PotCoin, or even TrumpCoin. (Yes—weed and Donald Trump themed digital money are a thing. People even tried to make a Kanye West inspired CoinyeCoin, but West sued for trademark infringement.)
- 16. Dad, Where dobitcoins come from?
- 17. Where do bitcoinscome from? With non digital money, a government decides when to print and also when to distribute the money. Because Bitcoin does not have a central government the Bitcoins must come elsewhere: With Bitcoin, miners use special software to solve mathematic problems and are rewarded with a certain number of bitcoins in exchange. This provides a smart way to solves issues of the currency and also creates a motivation for more people to mine. To mine cryptocurrencies you need a powerful hardware as well as software combination, because your computer needs a lot of computing power in order to solve those complicated math problems.
- 18. $100,000,000 FOR 2PIZZAS! At first a Bitcoin wasn´t even worth a single dollar.. But in 2010 someone purchased two pizzas for 10,000 bitcoin (was worth $67 then)
- 19. WHY THE BLOCKIS HOT! • Every 10 minutes, all the transactions that occur are verified, cleared, and stored in a block that is linked to the following block, creating a chain. Each block must be assigned to the following block to be valid. This structure permanently creates time-stamps and stores information, preventing anyone from changing the database. If you wanted to hack the blockchain system, you must hack the entire database. That means you must hack every existing computer on this planet that is connected to the blockchain and also the entire history of
- 20. SO WHAT’S THISHAVE TO DO WITH REAL ESTATE? One of the first bitcoin home sale transactions took place in Lake Tahoe circa 2014 for 2,739 bitcoins, (it was just land) or $1.6 million. (today 2,739 Bitcoins is over $27,000,000 and at the peak of bitcoin in December of 2017 that was over $52,000,000)
- 21. I’M PRETTY SUREWE ALL MISSED THE BOAT ON THAT ONE OR WE WOULDN’T BE IN THIS ROOM TODAY… BUT!
- 22.
- 23. THERE ARE OVER23,943 ADDRESSES HOLDING AT LEAST A MILLION DOLLARS WORTH OF BITCOINS That means the pool of potential home buyers has increased they now have access to down payments and can even pay cash for a home!!
- 24. • The U.S.government recognizes bitcoin as property and officially under the new tax law that started Jan. 1, 2018, anyone trading cryptocurrency will trigger a capital gains tax.
- 26. Volatility is aderivative product of an underlying financial instrument and it can be traded via options. Options are products that pay when a certain price condition is met (for example when the price of the underlying product hits an upper barrier). Options are used for speculation (you expect Bitcoin price to drop under 950 USD and want to trade it) or hedging (you are paying your employees in Bitcoin but earn in USD, so want to set the limit of the conversion rate). Currently there are only a few places where you can trade with options on Bitcoin. If you trade with options, you might have recognized something called the implied volatility. Implied volatility is a parameter calculated (implied) from the option pricing equation (Black- Scholes). Although it is also called volatility, it is different from the volatility we calculated above (from now we call it the realized volatility). It is important to watch out for this parameter, as it shows the market sentiment of the underlying product.
- 27.
- 31. Until relatively recently,building blockchain applications has required a complex background in coding, cryptography, mathematics as well as significant resources. But times have changed. Previously unimagined applications, from electronic voting & digitally recorded property assets to regulatory compliance & trading are now actively being developed and deployed faster than ever before. By providing developers with the tools to build decentralized applications, Ethereum is making all of this possible.
- 32. IF YOU WANTTO KNOW MORE ABOUT ETHEREUM SIGN UP FOR OUR NEXT CLASS WITH A GUEST SPEAKER
- 33. SERIOUSLY PLEASE DOASK ME QUESTIONS!
- 34.