Bitcoin
Viet-‐Trung Tran Vn-‐S3c
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Bitcoin
• Developed by Satoshi Nakamoto • First “currency” without a central issuer • Distributed Database to journal transacHons • Peer-‐to-‐peer based Crypto-‐Currency • Relies on Public/Private Key Cryptography • Open Source, C++ Code available on Github
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Bitcoin 2
• Allows for fast transfer of value through Internet without middlemen
• 3rd parHes can't prevent or control transacHons
• Safe from instability of fracHonal reserve system
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Bitcoin coins
• Saved on PC in the form of a wallet file or 3rd party exchange websites
• Divisible up to 0.00000001 or 10-‐8 of a BTC allowing for micro-‐payments
• Value is inherent, not backed by anything, as is standard for fiat currencies presently.
• Predictable inflaHon built into system • 21 million coins will ever exist • ~5 million coins at present
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Bitcoin transacHons
• Sender relinquishes ownership by signing them with her own private key
• TransacHon is broadcast to the peer-‐to-‐peer network
• Fast: 1 to 30 minutes to complete
• Free: PC & Internet is all you need • Permanent: no chargebacks/bounced checks
Sender relinquishes ownership by signing them
TransacHon is broadcast to the peer-‐to-‐peer
Permanent: no chargebacks/bounced checks
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Now 1BTC = 16,80 USD
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TransacHons
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Double spending
• No central authority • Using distributed Hmestamp servers
• Each peer can work as a Hmestamp server if wished
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Block chain
• Blocks in the main chain (black) are the longest series of blocks that go from the genesis block (green) to the current block. Orphan blocks (purple) are blocks that are not in the longest chain.
Blocks in the main chain (black) are the longest series of blocks that go from the genesis block (green) to the current block. Orphan blocks (purple) are blocks that are not in the longest
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Role of Hmestamp server
• Collect recent transacHons • Mining new block based on – Previous block of the longest chain – Recent transacHons – Nonce (random number)
• If found a block, broadcast it
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Network rules
• For the whole network – 1 BLOCK created, 50 BTC reward – 1 Block created for around every 10 minutes
• Controlled by the difficulty of block generaHon – Block value < an agreement target value
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IncenHve of working as a Hmestamp server
• Get reward for each created block – 50 BTC for the moment
– Reduce every 4 years (every 210,000 blocks) • TransacHon fee
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How the system works
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Disk Space
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TransacHon verificaHon
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Conclusion
• Well design • But not green – Non-‐stop consummaHon of CPU, Storage, Network and it’s ALL about power
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transacHon
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