Bitcoin is a decentralized digital currency that was created in 2009. It functions without a central bank or single administrator through a peer-to-peer network and blockchain technology. Bitcoin is mined through the use of computer processing power to verify transactions and add them to the blockchain. Miners are rewarded with newly minted bitcoins and transaction fees for their work maintaining the integrity of the blockchain. There will only ever be 21 million bitcoins created as the block reward gets cut in half approximately every four years.

2. Bitcoin, what is it?
• Bitcoin is a form of digital currency.
• It is the first decentralized digital currency, as the system works without a central
bank or single administrator.
• It is the very first form of a growing category of money called cryptocurrency,
created in 2009.
• The inventor of Bitcoin is anonymous, but he goes as Satoshi Nakamoto, a person
or a group of people.

3. History
• On 18 August 2008, the domain name "bitcoin.org" was registered.
• Nakamoto implemented the bitcoin software as open source code and released it
in January 2009.
• In January 2009, the bitcoin network came into existence after Satoshi Nakamoto
mined the first ever block on the chain, known as the genesis block, for a reward
of 50 bitcoins.

4. Bitcoin Wallets and Transactions
• Bitcoin wallets facilitate sending and receiving Bitcoins and gives ownership of the
Bitcoin balance to the user.
• Can use private key public key pair for security
• Eg. Electrum, Blockchain.info,Ledger, Trezor.
• Confirmed transaction
- A transaction is only confirmed when it is permanently included in the
Bitcoin blockchain.

5. Bitcoin mining
• In reality, it's simply the verification of bitcoin transactions.
• Mining is a record-keeping service done through the use of computer
processing power.
• Miners keep the blockchain consistent, complete, and unalterable by
repeatedly verifying and collecting newly broadcast transactions into
a new group of transactions called a block.
• To be accepted by the rest of the network, a new block must contain
a so-called proof-of-work.
• The proof-of-work system, alongside the chaining of blocks, makes
modifications of the blockchain extremely hard

6. How mining works - The block chain
• Blocks are files where data pertaining to the Bitcoin network is
permanently recorded.
• A block records some or all of the most recent Bitcoin transactions
• A mathematical problem is linked with each block.
• Miners are constantly processing and recording transactions as part
of the process of competing in a type of race.
• They race to ‘complete the current block’ in order to win Bitcoins.

7. • Every time a miner solves a problem, he will get a number of coins as
reward(currently 12.5 BTC).
• The first record in that next block is a transaction that awards the
winning miner the newly minted BTC, which is called ad coinbase
transaction.
• https://live.blockcypher.com/btc/

8. Sample Block
Hash Chaining

9. Block Reward
• The block reward started at 50 BTC in block #1 and halves every
210,000 blocks.
• A new block will be mined in every 10 minutes
• 144 blocks are mined per day on average. At 144 blocks per day,
210,000 blocks take on average four years to mine.
• The reward amount cut in half every 4 years.
• Only 21 million bitcoins can be mined in total

11. Transaction Fee
• The transaction fee is received by the bitcoin miner.
• Transaction fees are voluntary on the part of the person making the
bitcoin transaction, as the person attempting to make a transaction
can include any fee or none at all in the transaction.
• This is also an incentive to keep trying to create new blocks as the
creation of new bitcoins from the mining activity goes towards zero in
the future.

12. Hardware requirements
• Graphics Card: This is the bread and butter for your rig and what is actually going
to be generating your coins.
• Power Supply: Need adequate power to run your rig. If you use more graphics
cards, then more power required.
• Motherboard: The only thing you need to look for here are the amount of PCI-E
slots (or places for your video cards). Try to find one with a minimum of 3 slots so
you can expand if needed.
• Application-specific integrated circuit (ASIC).

13. Software requirements
• Updated software and drivers for you video card(s)
• Mining software
- CGMiner
- Poclbm
- Phoenix Miner (Linux)
- DiabloMiner (MAC OSX)
• Coin wallet (Only required if you are solo mining)
• Internet connection

14. Mining Pools
• Taking the pool members hashes
• Looking for block rewards
• Recording how much work all the participants are doing
• Assigning block rewards proportionally to participants

15. Mining Pools
• Taking the pool members hashes
• Looking for block rewards
• Recording how much work all the participants are doing
• Assigning block rewards proportionally to participants

16. Advantages
• Quick Transactions
• Very Low Transaction Fees
• No need to reveal personal details
• No Third-party Interruptions

17. Disadvantages
• Bitcoins Are Not Widely Accepted
• Risk of Unknown Technical Flaws
• No Valuation Guarantee - there is no central authority governing Bitcoins, no one
can guarantee its minimum valuation

18. Current Market Price

19. Questions ?