The document provides a history of currencies from ancient times to present day and discusses the rise of cryptocurrencies like Bitcoin and Ethereum. It explains that Bitcoin was launched in 2008 as a digital currency using blockchain technology, while Ethereum was introduced in 2015 with added functionality for smart contracts. The rapid growth of cryptocurrencies is attributed to these foundational projects, speculation and investment, and socioeconomic factors like high inflation and lack of access to traditional financial systems. The document outlines some advantages of cryptocurrencies and tools for tracking the market.

1. Cryptocurrencies 101
v3
Brett Colbert
@brett_colbert

3. History of currencies (1000BC to 500BC)
Standardized metal objects stamped with a standard
value -- were the Chinese bronze spade money, c. 475-
221 BC
Chinese shell money, 1000 BC..The shell most
widely used worldwide as currency was the shell
of Cypraea moneta, the money cowry.
Coins as currency were manufactured in China, India and
Turkey between 700 and 500 BC.

4. History of currencies (800AD to 1862)
Foreign currency exchange 1700 -
England and Holland
Paper currency 800 AD
1816 Gold as a benchmark of value
in England
1862 United States issues first
paper currency

5. History of currencies (1950 to current)
1955 US introduces first paper checks as currency
1950 the first US credit card
1958 AmEx introduces their first credit
card
https://www.currencyfair.com/cf-
content/uploads/2014/07/History-of-Currency-Exchange_1.jpg
2008 Satoshi Nakamoto introduces
cryptocurrency based on blockchain

6. https://howmuch.net/articles
/worlds-money-in-perspective
Update - bitcoin has increased
from $41B to $217 B market
cap currently

7. Why the recent explosion in cryptocurrencies?
2 fairly recent events increased attention
• Satoshi Nakamoto’s White Paper -
https://bitcoin.org/bitcoin.pdf - published
October 31, 2008
• No one knows who Satoshi is
• Satoshi Nakamoto is a pseudonym,
possibly a name made up from SAmsung,
TOSHIba, NAKAmichi, MOTOrola
• Bitcoin blockchain was born 2008
• Vitalik Buterin launches
Ethereum blockchain July 2015
• Improved the programmability of
the blockchain - Turing complete
• Many startups are being built on
top of Ethereum
• Dapps = distributed apps
Ethereum’s blockchain primarily stores contractual
transactions
https://www.youtube.com/watch?v=WSN5BaCzsbo
Biitcoin’s blockchain primarily stores financial
transactions

8. Both bitcoin blockchain and ethereum blockchain DEPEND
on a reward mechanism to function
Bitcoin is integral to the bitcoin blockchain - it’s a critical piece that incents miners to mine.
Ether/Ethereum is integral to the ethereum blockchain - it’s a critical piece that incents miners to mine.

9. “The currency is in the service of the protocol”
-- Vitalik Buterin

10. Comparing bitcoin, litecoin and ethereum...
Usage Financial transactions Smart Contracts Fast Transactions - “buy
coffee”
Market Cap $184 billion $44 billion
Total coins 21 million unlimited (currently 96 M)
Blockchain based Yes Yes Yes - forked from bitcoin
Mining Approach SHA-256 (Compute intensive) Scrypt (memory intensive)
Block Interval 10 minutes 2.5 minutes

11. … and there are TONS of other
cryptocurrencies
https://www.worldcoinindex.com/
967 cryptocurrencies currently tracked on
worldcoinindex.com

12. Where did many of these
cryptocurrencies come from?

13. The original bitcoin blockchain gave birth to many of the other
cryptocurrencies

14. Some forked off the original bitcoin
blockchain
https://steemit.com/b
itcoin/@hugobro/wha
t-is-this-bitcoin-hard-
fork-all-about

15. Another example of soft vs hard forks used to ‘create’ new
cryptocurrencies

16. Some cryptocurrencies are built on Ethereum
blockchain
→ ICOs created on top of Ethereum blockchain
Startups have raised $3 Billion through digital coin sales

17. As people realized the tremendous potential of blockchain, the
respective tokens gained value (eg bitcoin and ethereum).
This has caused investment and speculation.
Anyone can download the open source blockchain code and create
their own coin.
What happened here???? Why the
explosion in cryptocurrencies?

18. Say what? Anyone can create a
cryptocurrency? YES!

19. Investment and speculation in cryptocurrency is a personal choice - completely
separate from blockchain.
Public blockchains rely on their respective currencies to reward miners to mine
blocks. Bitcoin and Ethereum are critical to how they work.
Possible personas...
Blockchain Cryptocurrencies
I believe in blockchain but I
would never invest in
cryptocurrencies.
I believe in blockchain and I also
invest in cryptocurrencies.
I think blockchain is a fad and I
would never invest in
cryptocurrencies.
I think blockchain is a fad but I’m
investing in cryptocurrencies.

20. Socio-Economic Forces Increasing Adoption
of Cryptocurrencies
http://www.paymentscardsan
dmobile.com/mobile-wallets-
global-growth-continues/
Inflation, Lack of Access, Digital Wallets

21. Venezuela - Hyper Inflation
The president of Venezula unvelieved a new 100,000 bolivar
note in November, 2017. The note has a value of $2.50 on
the black market.
Venezuelans, on average, are only allowed to withdraw
about 10k to 20k bolivares a day. 20k bolivars are currently
worth 50 cents.
IMF sees inflation in Venezula soaring to 2200% by 2017.
Venezuelans are turning to bitcoin as an appreciating store
of wealth/currency.

23. How are people buying/selling
these cryptocurrencies?
Cryptocurrency Exchanges
www.kraken.com
www.coinbase.com
www.bittrex.com
www.poloniex.com
...

24. Sure, but these cryptocurrencies
can’t be that popular... right?
11/28/2017

25. Amazing
Coinbase’s mobile app is now the
#1 app

26. Bitcoin’s standing in global
currencies

27. Who actually works on bitcoin?
For free???? URL: bitcoin.team

28. Who are the developers on the
other coins? New code?
Do your research!
Sometimes very very few.

29. Interest in Understanding Bitcoin is
Growing

30. Will Bitcoin Go Mainstream?
12/4/2017

31. Bitcoin’s Market Cap Exceeds Visa

32. Cryptos are Volatile!

33. However, bitcoin is still small
relative to gold, stock market...

34. Brett’s Favorite Bitcoin & Cryptocurrency Tools
• https://tradeblock.com/bitcoin
• http://bitcointicker.co/#
• https://coinmarketcap.com/
• https://bitinfocharts.com/
• https://www.tradingview.com/
• https://www.gdax.com/trade/BTC-USD

35. Key Projects to Watch - Upcoming
New Capabilities
@ColdcardWallet
@OPENDIME v4
@lightning
@joinmarket
@TREZOR v2
@SegwitOrg
@SamouraiWallet iOS
@ln_zap
#MimbleWimble

36. Key Messages
● Certain crytocurrencies such as bitcoin and ethereum underpin the reward
mechanism for bitcoin blockchain and ethereum blockchain
● Some people see cryptocurrencies as an investment vehicle
● Cryptocurrencies exist because of lack of access to financial institutions for
$2B people
● Cryptocurrencies exist because of socio-econonic reasons such as high
currency inflation rates
● The interest in cryptocurrencies is growing at an exponential rate

37. What possible advantages do
cryptocurrencies have?
● Lower transactional cost compared to other financial solutions such as credit cards which currently have a
national average APR of about 15%
● Less expensive than other online payment solutions which have rates such as 2.9% + $.30 per transaction
● With other types of currencies, there are often additional transaction costs to send money between
people in different countries
● Converting non-digital currencies from one currency type to another often carries a transaction fee (eg –
converting US dollar to Euro or Euro to GBP)
● International payments on non-digital currencies often have a significant delay (sometimes a few days) to
send money overseas
● Some emerging countries don’t have a banking system or easy access to a bank or financial institution (eg
Kenya, Uruguay, Panama) … but people have cell phones!
● Merchants pay a fee of between 2% and 3% for some credit card transactions
● “Wiring money home” in some cases costs upwards of 10% of the amount transferred
● Banks can fail – remember the 2007/2008 global financial crisis

38. Artifacts as Wealth - Storage of
Wealth

39. The Trust Model for both Bitcoin and Ethereum rely
on mining - miners mine because there is a reward
Blockchain uses hash (SHA-256), Merkle trees and a decentralized set of nodes to
manage Trust.
This is referred to as the Proof of Work.
In the case of bitcoin, the reward for solving the puzzle is 12.5 bitcoin (currently
~$15,000 each).

40. bitcoin = verification reward for the blockchain -
reward cuts in half approx every 4 years
This is
referred to as
the “halving”Nov 28, 2012

41. http://fortune.com/2017/11/25/lost-bitcoins/
“Just as gold bars are lost at sea or $100 bills can burn, bitcoins can disappear from the
Internet forever. When all 21 million bitcoins are mined by the year 2040, the actual amount
available to trade or spend will be significantly lower.”