Bitcoin's promise of a world with virtual money is now famous: from being decentralized, low cost, to secured one question remains? How does Bitcoin make these miracles still happen? Not only will this workshop give you an in depth look at Bitcoin but you'll be able to use it wisely.

1. Bitcoin:
Theoretical Principles
Gilles Barbier, partner @TheFamily

3. Oussama
Alice
one thousand
1000
Recipient Amount
AuthentificationAlice’s bank account

4. Digital version
reuse
modify
emulate
no_money
alice@thefamily.co
oussama@thefamily.co

5. Using Private & Public keys
Message
Private key
Public key
ea43e18442cc4
e511cd2c8c58c
25ef5c181a5d7
dfb65c8e2873e
b6f4ec73aaae
hash
Public keys

6. Authenticate a email check
ea43e18442cc4
e511cd2c8c58c
25ef5c181a5d7
dfb65c8e2873e
b6f4ec73aaae
Public keyPrivate key

7. reuse
modify
emulate
no_money
A Bitcoin Transaction
From:
To :
Amount : 2.5
ea43e18442cc4e511cd2c8c58c25ef5c1
81a5d7dfb65c8e2873eb6f4ec73aaae
readable instruction
+ hash obtained
from Alice private key
Alice
Oussama
public keys as
accounts identification

8. In real world, you use a wallet
Private key

9. > record transactions (avoid duplication)
> manage balance (check you have money)
> guarantee ‘honesty’

10. > record transactions (avoid duplication)
> manage balance (check you have money)
> guarantee ‘honesty’

11. Blockchain :)

12. What is the blockchain?
time

13. How to alter the blockchain?
• A fraudulent miner CAN NOT
• create or modify a valid
transaction from someone else
• A fraudulent miner COULD
• remove a transaction
• modify its own transactions
• include an invalid transaction
(syntax or double spend)
time

14. Decentralised consensus
• Proposed by Satoshi
Nakamoto (2008):
• Emergent consensus:
consensus is guaranteed only
after some time (typically
about 1h)

15. Decentralised consensus
• independent verification of all new
transactions by all miner
• independent aggregation of those
transactions into a new “block”.
• “random” selection of one of these
new blocks (one miner wins a
“lottery”)
• independent verification of this new
block by all other miners
• independent aggregation of this new
block to the blockchain
• independent selection of the “official”
blockchain as the longest if any fork
occurred

16. It’s a bit more complicated
than that :)
Mining
Find a hash of
* new transactions
* previous block id
* random number
<= 0000000???????
(“difficulty”)

17. Blockchain Convergence
two concurrent winners =>
a blockchain fork
blockchain converge
blockchain
theoretical
attack

19. reuse
modify
emulate
no_money
Bitcoin Transaction
From:
To :
Amount : 2.5
ea43e18442cc4e511cd2c8c58c25ef5c1
81a5d7dfb65c8e2873eb6f4ec73aaae
hashing message
with Alice private key
Alice
Oussama

20. Why 21m bitcoins?

21. • Miner reward at t0 = 50 bitcoins
• Time to generate a block: 10 min
• Halving rate: 4 years
• 50 +50 +…+ 25 + 25 + … 12.5 + 12 + …etc
• = 50*(1+1/2+1/4+1/8+…)*(4*365*24*6) = 21m !

22. Farm

28. Pool

31. Altcoins

32. Blockchain

33. Thanks
@gillesbarbier