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1. What is a crypto-currency
2. Main crypto-currencies
3. Bitcoin and “Alt Coins”
4. Love stories between crypto-currencies and world countries
5. Blockchain : Technology behind the crypto-currencies
6. ICOs
7. The possible future of crypto-currencies
8. Conclusion
AGENDA
SURVEY : WITH OR AGAINST
Crypto-Currencies :
1. A Revolution or a Hoax ?
2. Do you believe in the future of crypto-currencies ?
3. Are you an investor ?
Blockchain :
1. Technology of the future ?
ICO :
1. Successful model for raising funds ?
WHAT THE FAMOUS THINK
WHAT THE FAMOUS THINK
“Cryptocurrencies are used for buying Fentanyl and other drugs so
it is a rare technology that has caused deaths in a fairly direct way.
I think the speculative wave around ICOs and cryptocurrencies is
super risky for those who go long,” “Yes, anonymous cash is used
for these kinds of things but you have to be physically present to
transfer it which makes things like kidnapping payments more
difficult.”
Tesla CEO Elon Musk recently made a statement that his piggy
bank has a very modest stock of cryptocurrency – only 0.25
BTC. But asking what can be done with Ethereum.
Messi joins the world of cryptocurrencies
WHAT IS A CRYPTO-CURRENCY
Anti-system, anti-
financial institution
currency
Is not issued by a
central authority
Has no physical,
tangible existence
Its value is not based on any known
economic indicator
Is not submitted to
any market
authority
regulation
Purpose :
 Perform financial transaction outside the existing
financial system
 Lower cost of transactions
Concern :
 Transaction security
Trust :
 Previously was provided by financial institutions
 Now provided by the users themselves
Designed to be free from government
manipulation and control
WHAT IS A CRYPTO-CURRENCY
No CEO
No frontier
Open source
Systematically under attack
No company
Rare – Not rare
Trusted or Untrusted
No brand
Bad publicity
Peer to Peer
No single point of failure
Near anonymity
DEFINITION OF VIRTUAL CURRENCY
In 2014, the European Bank Authority defined virtual currency as :
“A digital representation of value that is neither issued by a central bank or a public
authority, nor necessarily attached to a fiat currency, but is accepted by natural or
legal persons as a means of payment and can be transferred, stored or traded
electronically.”
CRYPTO-CURRENCY : ANONYMITY V/S PRIVACY
1. A transaction is “anonymous” if no one knows who you are.
2. A transaction is “private” if what you purchased & for what amount, are unknown
MAIN CRYPTO-CURRENCIES
Crypto-
Currency
Symbol Logo Date of
Release
Programming
Language
Bitcoin BTC XBT, ₿ 2008 C++
Ethereum ETH 2015 C++, Go
Ripple XRP 2013 C++
Litecoin LTC 2011 C++
Monero XMR 2014 C++
Dash NEO 2014 C++
Zcash ZEC 2016 C++
Petro XPD 2018 C++
Namecoin NMC 2011 C++
Swiftcoin STC 2011
Bytecoin BCN 2012
Peercoin PPC 2012 C++
Stellar XLM 2014 C, C++
https://coinmarketcap.com/all/views/all/
CRYPTOCURRENCIES IN FIGURES
Feb. 2017 May 2017 Sept. 2017 Jan. 2018 Nov. 2018
590 796 1,128 1,345 2,018
140B$ 850B$ 185B$
~30 Trillion $
NYSE~251B$
Cryptomarket
Capital Market
Value :
# of
Cryptos
Capital
Market
Mar. 2019
2,111
141B$
May 2019
2,209
251B$
BITCOIN - HISTORY
Sept. 2008 Sept. 2012Oct. 2008 Jan. 2010 May 2010 Feb. 2011
Bitcoin.org
domain
Genesis
block 50
BTC
Parity with
US Dollar
Paper on
Bitcoin by
Satoshi
Nakamoto
2 pizza
bought with
10,000BTC
Bitcoin
Foundation
 2008 :
o Satoshi Nakamoto published the Bitcoin white paper.
o Blockchain technology as we know it today gained then significance.
 2014 :
o Article published in the Newsweek “The Face Behind Bitcoin”.
o Claiming that Dorian Nakamoto, a computer engineer, as the inventor of
blockchain technology and bitcoin.
o 37 years old Japanese man living in California whose real name is Satoshi
Nakamoto.
BITCOIN : WHO IS BEHIND IT
 2013 :
o Nick Szabo was Satoshi Nakamoto.
o A decentralized currency enthusiast.
 YYYY :
o Hal Finney was a cryptographic pioneer prior to bitcoin.
o Other than Nakamoto, he was the first person to use bitcoin blockchain, make
improvements and file bug reports.
o He was Dorian Nakamoto’s neighbor.
 2014 :
o Craig Steven Wrught, an Australian has claimed to be Nakamoto.
o Dsmissed as a hoaxer for not producing sufficient evidence to link him to bitcoin
blockchain.
 All those who have been suspected to be Nakamoto have denied it,
 2019 :
o Craig Steven Wright : filed a copyright registration for the original bitcoin white
paper. 110% rise in 1 hour of the BitcoinSV.
o The U.S. Copyright Office does not recognize it.
BITCOIN : WHO IS BEHIND IT
BITCOIN - HISTORY
1. A distributed digital currency
2. White paper released by Satoshi Nakamoto in 2008
3. Transactions started in 2009
4. Limited and finite supply of 21 million Bitcoins
5. What after the 21 million Bitcoins ?
 The protocol / algorithm may be changed.
 No more supplies of Bitcoins. That may increase the price.
 No fear as the last Bitcoin will be mined around year 2140, because
of the constantly reduced block reward.
 Only the future will tell.
BITCOIN – FINANCIAL INFO
Purchased 1,000 Bitcoins at 10$ each for a total of 10,000$ ?
You would have been a multi-millionaire if you sold them at 19,000$ each.
Info Value
Rate at launch = 0.0000 US$
Highest rate ~19,300US$, end of 2017
Current rate ~8,734US$ - (30 May 2019)
Number of bitcoins already mined 17.731 million
Current market capitalization 154.9 billion US$
Maximum market capitalization reached 321.3 billion US$
Average time between blocks 10 minutes
Bitcoin generated per day ~1,800
BITCOIN – HOW TO GET THEM
3 Ways
Mine them Buy them Hack them
Mining :
Powerful computers
to solve complex
algorithms.
Miners get rewarded
by a number of
Bitcoins.
Over time, the
reward halves, and
then halves again.
Very hungry in
power consumption.
Buying :
Open e-wallet
(bitcoin wallet).
Use regular money to
buy Bitcoin (credit
card, bank transfer,
debit card,…).
Bitcoin balances are
kept using public and
private “keys”.
Public key = IBAN
Private key = ATM
PIN.
Hacking:
Mt.Gox, 2011, 2,609 BTC
Mt.Gox, 2014, 750,000BTC
BitFloor, 2012, 24,000BTC
Poloniex, 2014, 97 BTC
Bitstamp, 2015, 19,000BTC
Bitfinex, 2016, 120,000BTC
Parity Wallet,19.06.2017,
30M$ stolen
Parity Wallet 19.06.2017,
182M$ frozen
DAO, 17.06.2018 50M$
BITCOIN – MINING REWARDS
Year Value
2009 50
2012 25
2016 12.50
2020 – reward drop 6.25
Inside a Chinese Bitcoin Miners
A look Inside America's Largest Bitcoin Mining Operation
BITCOIN – EARLY USERS
Computer Geeks
Anarchists
Criminals
Libertarians
BITCOIN BELONGS TO
How many bitcoins Satoshi Nakamoto own ?
980,000 – 1,000,000 bitcoin
Presumed to be lost forever !!!!!
What could be the impact ?
A world leader able to govern ?
Manipulating everything ?
Regulating the market ?
BITCOINS LOST
Nearly 4 Million Bitcoins Lost Forever,
New Study Says
BITCOIN NODES
BITCOIN FORK HISTORY
BITCOIN V/S BANK
Bitcoin Bank
Loss of Credentials Loss of Money Physical Access to Money
Money Loss Due to Fraud No Legal Redress Regulators Guarantee
Mistakes with Software / Security
Breach
No Legal Redress Legal Redress
Miners Decide to Pack-up No Transactions
Legal Obligation for the
Bank to Operate
Legal Enforcement Impossible Possible
Not Eligible for Bank Account Send / Receive Money No Money
International Transfer Very Cheap Expensive
Time to Transfer Money Intl’ Minutes Days
Risk of Converting Currencies High / Moderate Moderate / Low
Trust
Miners Banks
Unregulated Miners Regulated banks
Anybody Could be a
Miner
Banks need to be approved
CROSS BORDERS TRANSFERS
Institution Transactions per Second
Bitcoin 3 to 10
Ethereum 20
Paypal 193
VISA 1,667
BITCOIN & THE WORLD
ALT COINS
Crypto-
Currency
Current
Rate
Highest Market
Cap
Supply Max
Supply
Ripple ~0.387$ ~2.5$ 16.3B$ ~42B 100B
Ethereum ~252$ ~1,377$ 26.8B$ 106M
Litecoin ~101$ ~366$ 6.3B$ 61.9M 84M
Crypto-
Currency
Current
Rate
Highest Market
Cap
Supply Max
Supply
Monero ~86.8$ 494$ 1.47B$ 17M
Zcash ~72.85$ 876$ 481M$ 6.60M
Dash ~157$ 1,600 1.38B$ 8.8M 18.9M
ETHEREUM
It is a public blockchain platform.
Perform transactions in currency Ether.
Run smart contracts.
Run general software applications.
Use Solidity as programming language that enables write and run Ethereum
applications.
BITCOIN V/S ETHEREUM
Bitcoin Ethereum
Cryptocurrencies transactions only
Cryptocurrencies transactions and running
code
Slow transactions validation (~10 min.) Fast transactions validation (~14 sec.)
Single price for transactions
Different prices for transactions and running
of programs
Bitcoins Ether / creation of new tokens
All coins are minted by miners Crowd funded / coins are minted
BITCOIN V/S MONERO
Bitcoin Monero
Sender ID is public/known Sender ID is private/unknown
Recipient can see how much money the
sender has
Recipient cannot know how much money
the sender has
You can buy it directly through a credit
card or bank account
You can only buy it by converting Bitcoin
Mining
SHA-256 Algorithm Cryptonight Algorithm
Needs special hardware (ASIC) Can happen on user PC
Maximum block size – limit – slows down
transactions during peak time.
Adaptive block size limit – changes based
on transaction volume. A new block every
2min.
FACEBOOK AND CRYPTOCURRENCIES
Facebook’s cryptocurrency secretive plan : GlobalCoin FB Coin, or Libra
 Help Facebook develop an entirely new revenue stream aside from advertising.
 Zuckerberg met with Central Bank of England Governor, MasterCard, Visa,
Western Union,...
 As much as $19 billion in additional revenue in its “upside case” for Facebook
by 2020 if its secretive cryptocurrency plans work out.
 Launched in around 12 countries.
 Conservatively, an incremental $3 billion in revenue from a successful
cryptocurrency implementation.
 Developing a cryptocurrency to use for peer-to-peer payments, tied to the value
of traditional currencies and available to use through WhatsApp
 Stablecoin : would likely be less attractive to and targeted by speculators, such
as hedge funds, because of its fixed price tied to a currency like the U.S. dollar.
 Facebook will want to be in control to gather data and simplify administration.
CRYPTOCURRENCIES – ALTERNATIVES TO GET THEM
Why not by playing / gambling :
https://www.bustabit.com/play
Every 250 bits = ~1$
CRYPTOCURRENCIES – HOW TO TRADE
Through the sections :
1. Fiat to Crypto Trading.
2. Storing Cryptocurrencies.
3. Crypto to Crypto Trading.
HOW TO TRADE
Fiat to Crypto :
1. You have money to invest.
2. Chose an exchange :
 Make sure that the exchange / trader is available / allowed in Lebanon.
 Check reputation
 Check exchange rates
 Check required documents / safety
3. Create an account.
4. Wallet :
 You must have one.
 Cryptocurrencies deposited in & protected by a wallet.
 It saves your private and public keys which helps you store, send, and
receive cryptocurrencies.
5. Private key :
 Gives you the right to access and send money.
 Confidential and private.
6. Public key :
 The address where everyone will send you money.
 Public, to be given to others.
HOW TO TRADE
Storing your Crypto :
1. Hot storage.
2. Cold storage.
Hot storage :
1. Like the wallet you carry around in your pocket.
2. It gives you easy access to your cash.
3. But, it is pretty vulnerable.
Cold storage :
1. Like your savings account.
2. Highly impractical for day-to-day use.
3. But, extremely safe.
HOW TO TRADE – CRYPTO TO CRYPTO
1. Open accounts in exchanges that enables crypto-to-crypto trading.
2. Check what cryptocurrencies are accepted, some allow you to buy using
Bitcoin only.
3. Preferably better different than the one used to buy crypto from fiat.
4. Like traditional fiat currencies trading, with its charts, indicators,…
POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN
Bitcoin 1.0
Bitcoin 2.0
Bitcoin chart :
POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN
What to expect ?
By following the pattern :
 Rise in November 2021
 By 1,300%
 Value ~40k$
 Market capitalization : ~800B$.
 Nothing compared to the dot.com bubble in 2001 of 9.6T$.
POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN
Near anonymity :
 Take it away and no one will want to use it;
 Keep it and advanced-economy governments will not tolerate it.
Other see it more likely at ~100$.
Bitcoin is like lottery tickets that might pay off in future
Many crypto-evangelists insist that bitcoin is “digital gold,” in part because the long-
term supply is algorithmically capped at 21 million.
Unlike gold – which has always had other purposes and today is employed widely in
new technologies from iPhones to spacecraft – bitcoin has no alternative use. And even
if bitcoiners manage to find a way to lower the phenomenal energy cost of verifying
transactions, the very nature of decentralised ledger systems makes them vastly less
efficient than systems with a trusted central party like a central bank.
Real question : if and when global regulation will stamp out privately constructed
systems that are expensive for governments to trace and monitor.
In the end, advanced economies will surely coordinate on cryptocurrency regulation, as
they have on other measures to prevent money laundering and tax evasion.
POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN
What is it waiting for to disappear ?
Bitcoin has died 348 times
Most Recent Death : March 02, 2019
Oldest Death : December 15, 2010
Deaths by Year:
2019 (10)
2018 (93)
2017 (124)
2016 (28)
2015 (39)
2014 (29)
2013 (17)
2012 (1)
2011 (6)
2010 (1)
POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN
This 10-years old technology pretends to replace the 4,000 years old fiat
currency.
POSSIBLE FUTURE OF CRYPTO-CURRENCIES – COUNTRIES
The Banque du Liban closing in on the launch of its own crypto-currency.
Launch of a new 100% ‘made in Lebanon’ crypto-currency in the near future.
The currency will be a “virtual Lebanese pound” destined exclusively for local use.
Its goal is to ease payment methods, to implement a technological transformation of
financial institutions and to lower the costs borne by consumers.
However, many risks have still to be taken into consideration.
First off, there are concerns about money laundering and cyber security.
Lebanon was the first country in the Middle East to issue an official warning regarding
their trade.
Tunisia has already launched its e-DINAR in 2015, followed by the e-CFA in Senegal at
the end of 2016, both based on blockchain technology.
Other states are in a trial phase such as Uruguay, Dubai with its emCash, Iran, which is
looking to bypass American sanctions, and Singapore.
The Swiss company X8 has received a “sharia-compliant” certificate awarded by the
Shariyah Review Bureau for its “stablecoin”.
Revolution
CONCLUSION
Hoaxor
 Some see them disappear.
 Some see them replacing national currencies by 2030.
 Only the future will tell us, most probably they are here to stay.
 A lot of them will disappear.
 New ones will be created.
 They will play a role in the world economy.
 Interesting to follow them up and understand :
 Their evolution
 Their weaknesses and strengths
 The regulations.
 Be cautious (if you want to invest) :
 Don’t bet on risky / dark crypto-currencies, even if they have a high ROI.
 Chose more stable ones with a clear purpose and objective.
Revolution
CONCLUSION
Hoaxor
If you buy / sell crypto-currencies, you will end up :
Real
Poor
Person
Or
TECHNOLOGY BEHIND : BLOCKCHAIN
 1991 :
o Idea behind blockchain technology traced back.
o Stuart Haber and W. Scott Stornetta described the first work on a
cryptographically secured chain of blocks.
 1992 :
o They incorporated the capability of collecting several documents into a block.
 2008 :
o Satoshi Nakamoto published the Bitcoin white paper.
o Blockchain technology as we know it today gained then significance.
WHO IS BEHIND IT
WHO USE IT - SECTORS
TECHNOLOGY BEHIND : BLOCKCHAIN
Internet most
promising new
development
One of the most
important
technologies to
emerge in recent
years
The applications
for blockchain
technology seem
endless
It will change our
world in the next
two decades as
much as the
Internet has over
the last two ones
It can also solve problems
and create new
opportunities in health
care, defense, supply
chain management,
luxury goods,
government, and other
industries
Businesses can use
it to streamline
operations and
create new
opportunities
The technology could
give rise to what
Gartner calls “the
programmable
economy”, powered
by entirely new
business models that
eliminate all kinds of
middlemen
Machine networks in which devices engage in economic
activity, and “smart assets” in which some form of
property such as shares in a company can be traded
according to programmable or artificial intelligence-based
rules rather than the control of a centralized entity.
The 1st obvious ones are
financial : international
payments, remittances,
complex financial
products
It will offer trust to financial services.
It will be a business enabler.
WHAT DO THEY SAY ABOUT IT
It is a distributed ledger of all transactions across a peer-to-peer network.
No need for central certifying authority to confirm transactions.
What is it ?
A blockchain is a single version of the truth made possible by an immutable and
secure time-stamped ledger, copies of which are held by multiple parties.
It’s a secure, tamper-proof ledger with time-stamped transactions, distributed
amongst a number of entities.
The blockchain is intended to provide a tamperproof record of transaction metadata,
regardless of transaction type.
Bitcoin uses blockchain technology but it is not blockchain.
WHAT IS BLOCKCHAIN
Cryptography secures the data and new transactions are linked to previous ones,
making it near-impossible to change older records without having to change
subsequent ones.
And because multiple “nodes” (computers) run the network, one would need to gain
control of more than half of them in order to make changes.
Transactions are batched together in a block.
Blocks are chained to preserve the temporal order.
Chaining is secure because each record depends on the previous ones.
How it works ?
WHAT IS BLOCKCHAIN
HOW IT WORKS
Block :
Hash
Data
Hash of
Previous Block
HOW IT WORKS
Data
 Its content depends on the type of the blockchain
 Example of bitcoin blockchain :
o From
o To
o Amount
Hash :
 Calculated once the block / data is created
 It is always unique
 It is like a fingerprint
 If the content is changed, the hash is changed.
 Example : e2c521bc53bb5db4c04aa497dba2ba5d48c8444db3
Hash of previous block :
 It helps create the chain
HOW IT WORKS
Chain :
Hash : 1Z8F
Previous hash : 0000
Hash : 6BQ1
Previous hash : 1Z8F
Hash : 3H4Q
Previous hash : 6BQ1
1 2 3
Genesis block
HOW IT WORKS
Tampering :
Hash : 1Z8F
Previous hash : 0000
Hash : 6BQ1 H62Y
Previous hash : 1Z8F
Hash : 3H4Q
Previous hash : 6BQ1
1 2 3
Ooopsss
HOW IT WORKS
BLOCKCHAIN : TYPES / COMPARISON
Permissioned / Private Public
Selected partners can submit transaction Anybody can submit a transaction
Selected partners participate in the
consensus mechanism
Anybody can become a miner
Identity of participants is known Public addresses
Selected participants can audit the ledger The ledger is public and auditable 24/7
Permissioned / Private Public
Access Permissioned read / write Open read / write
Speed Fast Slow
Security Preapproved participants PoW
Identity Known identities Anonymous
Asset Any asset Native assets
Validation of Transactions Predefined group Anybody miners
The principles of blockchain are important
Have the right team in place – most important factor
Picking the right technology – new & still immature technology :
 Faces many challenges
 Lack of qualified & experienced resources
Blockchain projects are complicated
 Follow best practice
 Dedicated project manager
 Agile : the most used methodology
Training : take time to learn and understand the technology & how it can be applied
User experience can be a killer regardless the technology underneath
Legal & compliance issues
LESSONS LEARNED & KEY SUCCESS FACTORS
Blockchain is seen as a threat to cloud computing.
Quantun computing is seen as a threat to blockchain.
Security :
 Cryptography will play a very important role.
 Access
 Identity
 Transparency & openness
 Integrity will be safeguarded
Blockchain is being increasingly used, but it not a magic bullet for everything.
It will definitely change economy, business and how things are being done
CONCLUSION
ICO – INITIAL COIN OFFERING
 ICO = crypto-equivalent of the IPO (Initial Public Offering).
 Purpose is to raise capital : digital proprietary tokens are sold.
 Quantity of cryptocurrency is sold in the form of "tokens"
to speculators or investors,
 No shares, no diligence, simply sell tokens which provide no ownership
rights or control.
 White paper with business plan for the company.
 No need to go to a bank or venture company (VC).
 Tokens are listed via cryptocurrency exchanges.
 Short period for getting the funds.
 It is a source of capital for start-ups.
 1st ICO = MasterCoin in 2012 or 2013 (depending on source).
 Ethereum raised money with a token sale in 2014, raising 3,700 BTC in
its first 12 hours, equal to approximately $2.3 million at the time.
 Feb. 2018 = Ethereum is the leading blockchain platform for ICOs (80%
marketshare)
ICO – INITIAL COIN OFFERING
Idea
Team
White Paper
Tokens Delivery
Tokens Trading
Deliver Project 78% of ICOs projects fail completely
Phases
Platform – Token & Pricing – Key dates –
Partnerships – Technology - …
Regulation
ICO – INITIAL COIN OFFERING
Criticisms :
 Funding based only on white paper.
 Can be used for fraud.
 Regulators warn against scammers using ICOs’ to execute pump and
dump schemes.
 Lot of ICOs are scams. Some ICOs launchers went to jail.
 Some platforms prohibit ICOs advertisements (in China, Japan,
Russia,…).
 UK FCA has warned that ICOs are risky and speculative with no
protection for investors.
 Each country has its own regulations for ICOs’ handling.
Crypto currencies presentation by Dr. Andre Gholam

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Crypto currencies presentation by Dr. Andre Gholam

  • 1. 1. What is a crypto-currency 2. Main crypto-currencies 3. Bitcoin and “Alt Coins” 4. Love stories between crypto-currencies and world countries 5. Blockchain : Technology behind the crypto-currencies 6. ICOs 7. The possible future of crypto-currencies 8. Conclusion AGENDA
  • 2. SURVEY : WITH OR AGAINST Crypto-Currencies : 1. A Revolution or a Hoax ? 2. Do you believe in the future of crypto-currencies ? 3. Are you an investor ? Blockchain : 1. Technology of the future ? ICO : 1. Successful model for raising funds ? WHAT THE FAMOUS THINK
  • 3. WHAT THE FAMOUS THINK “Cryptocurrencies are used for buying Fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long,” “Yes, anonymous cash is used for these kinds of things but you have to be physically present to transfer it which makes things like kidnapping payments more difficult.” Tesla CEO Elon Musk recently made a statement that his piggy bank has a very modest stock of cryptocurrency – only 0.25 BTC. But asking what can be done with Ethereum. Messi joins the world of cryptocurrencies WHAT IS A CRYPTO-CURRENCY Anti-system, anti- financial institution currency Is not issued by a central authority Has no physical, tangible existence Its value is not based on any known economic indicator Is not submitted to any market authority regulation Purpose :  Perform financial transaction outside the existing financial system  Lower cost of transactions Concern :  Transaction security Trust :  Previously was provided by financial institutions  Now provided by the users themselves Designed to be free from government manipulation and control
  • 4. WHAT IS A CRYPTO-CURRENCY No CEO No frontier Open source Systematically under attack No company Rare – Not rare Trusted or Untrusted No brand Bad publicity Peer to Peer No single point of failure Near anonymity DEFINITION OF VIRTUAL CURRENCY In 2014, the European Bank Authority defined virtual currency as : “A digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically.”
  • 5. CRYPTO-CURRENCY : ANONYMITY V/S PRIVACY 1. A transaction is “anonymous” if no one knows who you are. 2. A transaction is “private” if what you purchased & for what amount, are unknown MAIN CRYPTO-CURRENCIES Crypto- Currency Symbol Logo Date of Release Programming Language Bitcoin BTC XBT, ₿ 2008 C++ Ethereum ETH 2015 C++, Go Ripple XRP 2013 C++ Litecoin LTC 2011 C++ Monero XMR 2014 C++ Dash NEO 2014 C++ Zcash ZEC 2016 C++ Petro XPD 2018 C++ Namecoin NMC 2011 C++ Swiftcoin STC 2011 Bytecoin BCN 2012 Peercoin PPC 2012 C++ Stellar XLM 2014 C, C++ https://coinmarketcap.com/all/views/all/
  • 6. CRYPTOCURRENCIES IN FIGURES Feb. 2017 May 2017 Sept. 2017 Jan. 2018 Nov. 2018 590 796 1,128 1,345 2,018 140B$ 850B$ 185B$ ~30 Trillion $ NYSE~251B$ Cryptomarket Capital Market Value : # of Cryptos Capital Market Mar. 2019 2,111 141B$ May 2019 2,209 251B$ BITCOIN - HISTORY Sept. 2008 Sept. 2012Oct. 2008 Jan. 2010 May 2010 Feb. 2011 Bitcoin.org domain Genesis block 50 BTC Parity with US Dollar Paper on Bitcoin by Satoshi Nakamoto 2 pizza bought with 10,000BTC Bitcoin Foundation
  • 7.  2008 : o Satoshi Nakamoto published the Bitcoin white paper. o Blockchain technology as we know it today gained then significance.  2014 : o Article published in the Newsweek “The Face Behind Bitcoin”. o Claiming that Dorian Nakamoto, a computer engineer, as the inventor of blockchain technology and bitcoin. o 37 years old Japanese man living in California whose real name is Satoshi Nakamoto. BITCOIN : WHO IS BEHIND IT  2013 : o Nick Szabo was Satoshi Nakamoto. o A decentralized currency enthusiast.  YYYY : o Hal Finney was a cryptographic pioneer prior to bitcoin. o Other than Nakamoto, he was the first person to use bitcoin blockchain, make improvements and file bug reports. o He was Dorian Nakamoto’s neighbor.  2014 : o Craig Steven Wrught, an Australian has claimed to be Nakamoto. o Dsmissed as a hoaxer for not producing sufficient evidence to link him to bitcoin blockchain.  All those who have been suspected to be Nakamoto have denied it,  2019 : o Craig Steven Wright : filed a copyright registration for the original bitcoin white paper. 110% rise in 1 hour of the BitcoinSV. o The U.S. Copyright Office does not recognize it. BITCOIN : WHO IS BEHIND IT
  • 8. BITCOIN - HISTORY 1. A distributed digital currency 2. White paper released by Satoshi Nakamoto in 2008 3. Transactions started in 2009 4. Limited and finite supply of 21 million Bitcoins 5. What after the 21 million Bitcoins ?  The protocol / algorithm may be changed.  No more supplies of Bitcoins. That may increase the price.  No fear as the last Bitcoin will be mined around year 2140, because of the constantly reduced block reward.  Only the future will tell. BITCOIN – FINANCIAL INFO Purchased 1,000 Bitcoins at 10$ each for a total of 10,000$ ? You would have been a multi-millionaire if you sold them at 19,000$ each. Info Value Rate at launch = 0.0000 US$ Highest rate ~19,300US$, end of 2017 Current rate ~8,734US$ - (30 May 2019) Number of bitcoins already mined 17.731 million Current market capitalization 154.9 billion US$ Maximum market capitalization reached 321.3 billion US$ Average time between blocks 10 minutes Bitcoin generated per day ~1,800
  • 9. BITCOIN – HOW TO GET THEM 3 Ways Mine them Buy them Hack them Mining : Powerful computers to solve complex algorithms. Miners get rewarded by a number of Bitcoins. Over time, the reward halves, and then halves again. Very hungry in power consumption. Buying : Open e-wallet (bitcoin wallet). Use regular money to buy Bitcoin (credit card, bank transfer, debit card,…). Bitcoin balances are kept using public and private “keys”. Public key = IBAN Private key = ATM PIN. Hacking: Mt.Gox, 2011, 2,609 BTC Mt.Gox, 2014, 750,000BTC BitFloor, 2012, 24,000BTC Poloniex, 2014, 97 BTC Bitstamp, 2015, 19,000BTC Bitfinex, 2016, 120,000BTC Parity Wallet,19.06.2017, 30M$ stolen Parity Wallet 19.06.2017, 182M$ frozen DAO, 17.06.2018 50M$ BITCOIN – MINING REWARDS Year Value 2009 50 2012 25 2016 12.50 2020 – reward drop 6.25 Inside a Chinese Bitcoin Miners A look Inside America's Largest Bitcoin Mining Operation
  • 10. BITCOIN – EARLY USERS Computer Geeks Anarchists Criminals Libertarians BITCOIN BELONGS TO How many bitcoins Satoshi Nakamoto own ? 980,000 – 1,000,000 bitcoin Presumed to be lost forever !!!!! What could be the impact ? A world leader able to govern ? Manipulating everything ? Regulating the market ?
  • 11. BITCOINS LOST Nearly 4 Million Bitcoins Lost Forever, New Study Says BITCOIN NODES
  • 12. BITCOIN FORK HISTORY BITCOIN V/S BANK Bitcoin Bank Loss of Credentials Loss of Money Physical Access to Money Money Loss Due to Fraud No Legal Redress Regulators Guarantee Mistakes with Software / Security Breach No Legal Redress Legal Redress Miners Decide to Pack-up No Transactions Legal Obligation for the Bank to Operate Legal Enforcement Impossible Possible Not Eligible for Bank Account Send / Receive Money No Money International Transfer Very Cheap Expensive Time to Transfer Money Intl’ Minutes Days Risk of Converting Currencies High / Moderate Moderate / Low Trust Miners Banks Unregulated Miners Regulated banks Anybody Could be a Miner Banks need to be approved
  • 13. CROSS BORDERS TRANSFERS Institution Transactions per Second Bitcoin 3 to 10 Ethereum 20 Paypal 193 VISA 1,667 BITCOIN & THE WORLD
  • 14. ALT COINS Crypto- Currency Current Rate Highest Market Cap Supply Max Supply Ripple ~0.387$ ~2.5$ 16.3B$ ~42B 100B Ethereum ~252$ ~1,377$ 26.8B$ 106M Litecoin ~101$ ~366$ 6.3B$ 61.9M 84M Crypto- Currency Current Rate Highest Market Cap Supply Max Supply Monero ~86.8$ 494$ 1.47B$ 17M Zcash ~72.85$ 876$ 481M$ 6.60M Dash ~157$ 1,600 1.38B$ 8.8M 18.9M ETHEREUM It is a public blockchain platform. Perform transactions in currency Ether. Run smart contracts. Run general software applications. Use Solidity as programming language that enables write and run Ethereum applications.
  • 15. BITCOIN V/S ETHEREUM Bitcoin Ethereum Cryptocurrencies transactions only Cryptocurrencies transactions and running code Slow transactions validation (~10 min.) Fast transactions validation (~14 sec.) Single price for transactions Different prices for transactions and running of programs Bitcoins Ether / creation of new tokens All coins are minted by miners Crowd funded / coins are minted BITCOIN V/S MONERO Bitcoin Monero Sender ID is public/known Sender ID is private/unknown Recipient can see how much money the sender has Recipient cannot know how much money the sender has You can buy it directly through a credit card or bank account You can only buy it by converting Bitcoin Mining SHA-256 Algorithm Cryptonight Algorithm Needs special hardware (ASIC) Can happen on user PC Maximum block size – limit – slows down transactions during peak time. Adaptive block size limit – changes based on transaction volume. A new block every 2min.
  • 16. FACEBOOK AND CRYPTOCURRENCIES Facebook’s cryptocurrency secretive plan : GlobalCoin FB Coin, or Libra  Help Facebook develop an entirely new revenue stream aside from advertising.  Zuckerberg met with Central Bank of England Governor, MasterCard, Visa, Western Union,...  As much as $19 billion in additional revenue in its “upside case” for Facebook by 2020 if its secretive cryptocurrency plans work out.  Launched in around 12 countries.  Conservatively, an incremental $3 billion in revenue from a successful cryptocurrency implementation.  Developing a cryptocurrency to use for peer-to-peer payments, tied to the value of traditional currencies and available to use through WhatsApp  Stablecoin : would likely be less attractive to and targeted by speculators, such as hedge funds, because of its fixed price tied to a currency like the U.S. dollar.  Facebook will want to be in control to gather data and simplify administration. CRYPTOCURRENCIES – ALTERNATIVES TO GET THEM Why not by playing / gambling : https://www.bustabit.com/play Every 250 bits = ~1$
  • 17. CRYPTOCURRENCIES – HOW TO TRADE Through the sections : 1. Fiat to Crypto Trading. 2. Storing Cryptocurrencies. 3. Crypto to Crypto Trading. HOW TO TRADE Fiat to Crypto : 1. You have money to invest. 2. Chose an exchange :  Make sure that the exchange / trader is available / allowed in Lebanon.  Check reputation  Check exchange rates  Check required documents / safety 3. Create an account. 4. Wallet :  You must have one.  Cryptocurrencies deposited in & protected by a wallet.  It saves your private and public keys which helps you store, send, and receive cryptocurrencies. 5. Private key :  Gives you the right to access and send money.  Confidential and private. 6. Public key :  The address where everyone will send you money.  Public, to be given to others.
  • 18. HOW TO TRADE Storing your Crypto : 1. Hot storage. 2. Cold storage. Hot storage : 1. Like the wallet you carry around in your pocket. 2. It gives you easy access to your cash. 3. But, it is pretty vulnerable. Cold storage : 1. Like your savings account. 2. Highly impractical for day-to-day use. 3. But, extremely safe. HOW TO TRADE – CRYPTO TO CRYPTO 1. Open accounts in exchanges that enables crypto-to-crypto trading. 2. Check what cryptocurrencies are accepted, some allow you to buy using Bitcoin only. 3. Preferably better different than the one used to buy crypto from fiat. 4. Like traditional fiat currencies trading, with its charts, indicators,…
  • 19. POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN Bitcoin 1.0 Bitcoin 2.0 Bitcoin chart : POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN What to expect ? By following the pattern :  Rise in November 2021  By 1,300%  Value ~40k$  Market capitalization : ~800B$.  Nothing compared to the dot.com bubble in 2001 of 9.6T$.
  • 20. POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN Near anonymity :  Take it away and no one will want to use it;  Keep it and advanced-economy governments will not tolerate it. Other see it more likely at ~100$. Bitcoin is like lottery tickets that might pay off in future Many crypto-evangelists insist that bitcoin is “digital gold,” in part because the long- term supply is algorithmically capped at 21 million. Unlike gold – which has always had other purposes and today is employed widely in new technologies from iPhones to spacecraft – bitcoin has no alternative use. And even if bitcoiners manage to find a way to lower the phenomenal energy cost of verifying transactions, the very nature of decentralised ledger systems makes them vastly less efficient than systems with a trusted central party like a central bank. Real question : if and when global regulation will stamp out privately constructed systems that are expensive for governments to trace and monitor. In the end, advanced economies will surely coordinate on cryptocurrency regulation, as they have on other measures to prevent money laundering and tax evasion. POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN What is it waiting for to disappear ? Bitcoin has died 348 times Most Recent Death : March 02, 2019 Oldest Death : December 15, 2010 Deaths by Year: 2019 (10) 2018 (93) 2017 (124) 2016 (28) 2015 (39) 2014 (29) 2013 (17) 2012 (1) 2011 (6) 2010 (1)
  • 21. POSSIBLE FUTURE OF CRYPTO-CURRENCIES - BITCOIN This 10-years old technology pretends to replace the 4,000 years old fiat currency. POSSIBLE FUTURE OF CRYPTO-CURRENCIES – COUNTRIES The Banque du Liban closing in on the launch of its own crypto-currency. Launch of a new 100% ‘made in Lebanon’ crypto-currency in the near future. The currency will be a “virtual Lebanese pound” destined exclusively for local use. Its goal is to ease payment methods, to implement a technological transformation of financial institutions and to lower the costs borne by consumers. However, many risks have still to be taken into consideration. First off, there are concerns about money laundering and cyber security. Lebanon was the first country in the Middle East to issue an official warning regarding their trade. Tunisia has already launched its e-DINAR in 2015, followed by the e-CFA in Senegal at the end of 2016, both based on blockchain technology. Other states are in a trial phase such as Uruguay, Dubai with its emCash, Iran, which is looking to bypass American sanctions, and Singapore. The Swiss company X8 has received a “sharia-compliant” certificate awarded by the Shariyah Review Bureau for its “stablecoin”.
  • 22. Revolution CONCLUSION Hoaxor  Some see them disappear.  Some see them replacing national currencies by 2030.  Only the future will tell us, most probably they are here to stay.  A lot of them will disappear.  New ones will be created.  They will play a role in the world economy.  Interesting to follow them up and understand :  Their evolution  Their weaknesses and strengths  The regulations.  Be cautious (if you want to invest) :  Don’t bet on risky / dark crypto-currencies, even if they have a high ROI.  Chose more stable ones with a clear purpose and objective. Revolution CONCLUSION Hoaxor If you buy / sell crypto-currencies, you will end up : Real Poor Person Or
  • 23. TECHNOLOGY BEHIND : BLOCKCHAIN  1991 : o Idea behind blockchain technology traced back. o Stuart Haber and W. Scott Stornetta described the first work on a cryptographically secured chain of blocks.  1992 : o They incorporated the capability of collecting several documents into a block.  2008 : o Satoshi Nakamoto published the Bitcoin white paper. o Blockchain technology as we know it today gained then significance. WHO IS BEHIND IT
  • 24. WHO USE IT - SECTORS TECHNOLOGY BEHIND : BLOCKCHAIN Internet most promising new development One of the most important technologies to emerge in recent years The applications for blockchain technology seem endless It will change our world in the next two decades as much as the Internet has over the last two ones It can also solve problems and create new opportunities in health care, defense, supply chain management, luxury goods, government, and other industries Businesses can use it to streamline operations and create new opportunities
  • 25. The technology could give rise to what Gartner calls “the programmable economy”, powered by entirely new business models that eliminate all kinds of middlemen Machine networks in which devices engage in economic activity, and “smart assets” in which some form of property such as shares in a company can be traded according to programmable or artificial intelligence-based rules rather than the control of a centralized entity. The 1st obvious ones are financial : international payments, remittances, complex financial products It will offer trust to financial services. It will be a business enabler. WHAT DO THEY SAY ABOUT IT It is a distributed ledger of all transactions across a peer-to-peer network. No need for central certifying authority to confirm transactions. What is it ? A blockchain is a single version of the truth made possible by an immutable and secure time-stamped ledger, copies of which are held by multiple parties. It’s a secure, tamper-proof ledger with time-stamped transactions, distributed amongst a number of entities. The blockchain is intended to provide a tamperproof record of transaction metadata, regardless of transaction type. Bitcoin uses blockchain technology but it is not blockchain. WHAT IS BLOCKCHAIN
  • 26. Cryptography secures the data and new transactions are linked to previous ones, making it near-impossible to change older records without having to change subsequent ones. And because multiple “nodes” (computers) run the network, one would need to gain control of more than half of them in order to make changes. Transactions are batched together in a block. Blocks are chained to preserve the temporal order. Chaining is secure because each record depends on the previous ones. How it works ? WHAT IS BLOCKCHAIN HOW IT WORKS
  • 27. Block : Hash Data Hash of Previous Block HOW IT WORKS Data  Its content depends on the type of the blockchain  Example of bitcoin blockchain : o From o To o Amount Hash :  Calculated once the block / data is created  It is always unique  It is like a fingerprint  If the content is changed, the hash is changed.  Example : e2c521bc53bb5db4c04aa497dba2ba5d48c8444db3 Hash of previous block :  It helps create the chain HOW IT WORKS
  • 28. Chain : Hash : 1Z8F Previous hash : 0000 Hash : 6BQ1 Previous hash : 1Z8F Hash : 3H4Q Previous hash : 6BQ1 1 2 3 Genesis block HOW IT WORKS Tampering : Hash : 1Z8F Previous hash : 0000 Hash : 6BQ1 H62Y Previous hash : 1Z8F Hash : 3H4Q Previous hash : 6BQ1 1 2 3 Ooopsss HOW IT WORKS
  • 29. BLOCKCHAIN : TYPES / COMPARISON Permissioned / Private Public Selected partners can submit transaction Anybody can submit a transaction Selected partners participate in the consensus mechanism Anybody can become a miner Identity of participants is known Public addresses Selected participants can audit the ledger The ledger is public and auditable 24/7 Permissioned / Private Public Access Permissioned read / write Open read / write Speed Fast Slow Security Preapproved participants PoW Identity Known identities Anonymous Asset Any asset Native assets Validation of Transactions Predefined group Anybody miners The principles of blockchain are important Have the right team in place – most important factor Picking the right technology – new & still immature technology :  Faces many challenges  Lack of qualified & experienced resources Blockchain projects are complicated  Follow best practice  Dedicated project manager  Agile : the most used methodology Training : take time to learn and understand the technology & how it can be applied User experience can be a killer regardless the technology underneath Legal & compliance issues LESSONS LEARNED & KEY SUCCESS FACTORS
  • 30. Blockchain is seen as a threat to cloud computing. Quantun computing is seen as a threat to blockchain. Security :  Cryptography will play a very important role.  Access  Identity  Transparency & openness  Integrity will be safeguarded Blockchain is being increasingly used, but it not a magic bullet for everything. It will definitely change economy, business and how things are being done CONCLUSION ICO – INITIAL COIN OFFERING  ICO = crypto-equivalent of the IPO (Initial Public Offering).  Purpose is to raise capital : digital proprietary tokens are sold.  Quantity of cryptocurrency is sold in the form of "tokens" to speculators or investors,  No shares, no diligence, simply sell tokens which provide no ownership rights or control.  White paper with business plan for the company.  No need to go to a bank or venture company (VC).  Tokens are listed via cryptocurrency exchanges.  Short period for getting the funds.  It is a source of capital for start-ups.  1st ICO = MasterCoin in 2012 or 2013 (depending on source).  Ethereum raised money with a token sale in 2014, raising 3,700 BTC in its first 12 hours, equal to approximately $2.3 million at the time.  Feb. 2018 = Ethereum is the leading blockchain platform for ICOs (80% marketshare)
  • 31. ICO – INITIAL COIN OFFERING Idea Team White Paper Tokens Delivery Tokens Trading Deliver Project 78% of ICOs projects fail completely Phases Platform – Token & Pricing – Key dates – Partnerships – Technology - … Regulation ICO – INITIAL COIN OFFERING Criticisms :  Funding based only on white paper.  Can be used for fraud.  Regulators warn against scammers using ICOs’ to execute pump and dump schemes.  Lot of ICOs are scams. Some ICOs launchers went to jail.  Some platforms prohibit ICOs advertisements (in China, Japan, Russia,…).  UK FCA has warned that ICOs are risky and speculative with no protection for investors.  Each country has its own regulations for ICOs’ handling.