際際滷

際際滷Share a Scribd company logo

MONEY ,BITCOIN,BLOCKCHAIN TECHNOLOGY

Download as PPTX, PDF
H
HasHim Salim

bitcoin cryptocurrency There are two main ways the block chain ledger can be corrupted to steal bitcoins: by fraudulently adding to or modifying it. The bitcoin system protects the blockchain against both using a combination of digital signatures and cryptographic hashes. hashsalim@gmail.com

1 of 23
Download to read offline
An introduction to bitcoin, the blockchain, andcryptocurrency HASHIM SALIM
About Me (HASHIM SALIM) Received first crypto token in 2016 when a friend sent me Dogecoin - Got into Bitcoin in 2017 - Part of wazirxwarrior (crypo educator) - Holding Token(btc,xrp,sxp,eth,dot,troy,wrx,matic,) - Blockchain resists change - Mining Complect electronic and communication engineering Software tester Broadband technician Full time cryptotrader
The Story About Currency Examine a story what the world looked like before money was invented. It's a story built on the idea of Barter.
From then on, banks became the intermediary or the middlemen of transactions. And to control the demand and supply of currency and to standardize trade, the government stepped in. The freedom of decentralization offered to the people by metal coins was somehow giving way to a more centralized concept of fiat currency through government-regulated financial institutions. This paper- printed currency has no intrinsic value of its own, whereas governments/central authorities give it an attributed value by declaring it as a legal tender in respective territories. The power that was previously controlled by wealthy individuals became institutionalized in the form of banks and governments. People believed that these centralized bodies provided protection as well as a reliable trust system for trade and the flow of information. But still, the system had its taboo of negatives. There existed scenarios when the banks or the central body suddenly collapsed. Discrepancies arose when they charged huge fees in exchange for keeping gold in their vault. Though the central authority seems to lessen the complexities in trade, it possessed several other threats which we have seen in history, like inflation and banks printing more currency.
FIAT VS CYRPTOCURRENCY Fiat (USD, Euro, GBP) Cryptocurrency (Bitcoin, Ethereum, IOTA) Controlled by banks and governments Created by governments Inflationary Infinite supply Can be created at any time Open M F, 9 to 5 Controlled by the people that use it Created by solving math algorithms (mined) Deflationary. Finite supply Set amount released every year Open 24/7/365
MONEY ,BITCOIN,BLOCKCHAIN TECHNOLOGY
History: Bitcoin was first mentioned in a 2008 research paper published under the name Satoshi Nakamoto. Some mainstream websites began accepting bitcoins 2013.WordPress started in November 2012 followed by OKCupid in April 2013, Atomic Mall in November 2013, TigerDirect in January 2014, and Overstock.com that same month. In October 2013, Chinese internet giant Baidu had allowed clients of website security services to pay with bitcoins. During November 2013, the China-based bitcoin exchange BTC China overtook the Japan-based Mt. Gox and the Europe-based Bitstamp to become the largest bitcoin trading exchange by trade volume. The first bitcoin ATM was installed in October 2013 in Vancouver, British Columbia, Canada.
Bitcoin is like email 16UwLL9Risc3QfPqBUvKofHmBQ7wMtjvM 31uEbMgunupShBVTewXjtqbBv5MndwfXhb INTERNET Hash@gmail.com Rose.@gmail.com
WHAT IS IT? Bitcoin a peer-to-peer electronic cash System The payments in the system are recorded in a public ledger using its own unit of account, which is also called bitcoin. Deflationary Finite amount Cryptocurrency a virtual currency that uses encryption to prevent double spending Blockchain a decentralized, trustless ledger (list of transactions), on which only additions can be made The ledger history can never be change All computers on the blockchain have the ledger
HOW IT BEGAN Satoshi Nakamoto Bitcoins anonymous creator Believed to be a pseudonym Published bitcoins whitepaper in 2009 Financial collapse of 2008 Poor fiscal management by banks, investment firms, and government The world had a need to get away from the central authority of money BLOCKCHAIN EXPLAINED (The Yap Tribe) All tribespeople know and keep track of every transaction within their village They all know who owns what and how much Any time a transaction is made all the people in the tribe are gathered and are told of the transaction Subsequently, they all update the database in their head of who owns what
Abstract: Bitcoin is a peer-to-peer payment system introduced as open source software in 2009 by developer Satoshi Nakamoto. The payments in the system are recorded in a public ledger using its own unit of account, which is also called bitcoin. The bitcoin system has no central repository and no single administrator, which has led the US Treasury to call bitcoin a decentralized virtual currency. Although its status as a currency is disputed, media reports often refer to bitcoin as a crypto currency or digital currency Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. Called mining, individuals or companies engage in this activity in exchange for transaction fees and newly created bitcoins. Besides mining, bitcoins can be obtained in exchange for fiat money, products, and services. Users can send and receive bitcoins electronically for an optional transaction fee using wallet software on a personal computer, mobile device, or a web application.
HOW BLOCKCHAIN WORK
WHAT IS BLOCKCHAIN? Decentralization - Need of the hour With a centralized authority in place, better coordination is achieved. Centralization comes with its own shortcomings. The biggest downside is the abuse of power. In such cases, decentralization has great significance. The concept of decentralized networks laid the foundation for the evolution of Bitcoin blockchain. Decentralized networks aren't controlled by a single authority or a single node. Each node in the network share processing power and decision making processes. The nodes are independent and are distributed across the globe. Distributed Ledgers Ledger is a record of transactions. In normal cases, the ledger will be in the hands of authority. In the concept of distributed ledger, the same copy of the ledger will be distributed among a group of participants. The blockchain can be called a ledger that shares and synchronize information concurrently among all network participants. Therefore every record (usually transactions) in the ledger is seen by everybody and every change made to the ledger is reflected across all participants in the network. Thus blockchain can be called a distributed ledger. The group of technologies that follows the concept of distributed ledger among the participants is called Distributed Ledger Technologies or DLTs in short. There comes a variety of DLTs, where blockchain is one of them.
let'scompare it with a notebook. A blockchain is like a notebook where pages are blocks. The pages in a notebook carry the data similar to how the block carries the data in blockchain. You see the data in those pages are always connected or linked to one another . Similarly in the blockchain, blocks are connected or linked to each other. To get an idea about how blockchain is a ledger, In a classroom, a student seeks the help of his classmate if he misses out any information say a few pages of notes.similarly, in the blockchain, if a node fails, the other participating nodes overcome the deficiency via helping the crashed nodes to sync up with the rest of the network.
A Basic Dictionary of Blockchain Here is a quick read to the common terms related to blockchain. However, we'll see them in detail in the coming chapters. But for now, this glossary will help you grasp a general idea about the blockchain terms used commonly. Peer to Peer Network Blockchain is a peer to peer network. In a peer to peer (P2P) network, every computer can share data with each other. Each participant in the network has equal power and is commonly called a "node". These types of networks don't require any centralized storage facilities or server coordination and hence are majorly used in distributed systems. Node In its simple sense, a node is a machine in a blockchain network. A group of nodes connected together forms a blockchain network. A node can be a mining device, a storage device, or any other device which plays different kinds of role in different blockchain networks. Nodes are responsible for storing a copy of the transactions that are happening in the network. When a new node connects to a blockchain network, it downloads the entire copy of the blockchain to date and synchronizes with the network until it has the latest block held by all the nodes in the peer to peer network. Every time a new block is created, a copy of it is added to every node in the network. All miners in the blockchain network are nodes, however, all nodes are not miners.
Miners Specific nodes in the blockchain network that are responsible for the verification and validation of transactions blocks. They play an important role in maintaining and extending the blockchain by adding new blocks to the In a public blockchain they are responsible for creating new currencies, hence the name miner. Transaction A transaction in blockchain can be defined as the smallest unit of a task in a blockchain network. Successful transactions that are agreed upon by the nodes in the network will become candidates for creating a block. Block Blockchain is a ledger, where transactions are recorded. The successful transactions are recorded inside a block. other words, a block represents a data structure for storing successful transactions along with metadata (block number, timestamp, etc.) and the blocks are linked together to form a blockchain. Blockchain A cryptographically linked sequence of blocks in a chronological order spanning across the nodes forms the blockchain. Blockchain is like an ever-growing book (ledger) with blocks forming the pages of it, in a sequential fashion and every node in the network having the exact same copy of the book. The network keeps on growing long as new blocks get added to the network.
What does a Blockchain look like? we saw blockchain is a ledger. A ledger records transactions. In a blockchain, these transactions are recorded inside the block. These blocks are linked together to form a chain of blocks - blockchain. Pic1;simp blockchain Pic2 ;exact block Timestamp: The time at which the block was created. Nonce: This is a random number. But the significance of this will be discussed later when we talk about Proof of Work and Mining. For now, let's think of it as a random number. Root Hash: This is the combined hash of all the transactions included in the block, obtained by creating a Merkle tree of transaction hashes. Well, don't worry if you aren't familiar with these terms. We'll go in detail about hashes and Merkle trees in the coming section. Previous Hash: The hash value of the previous block's header. This is an important concept, which makes blocks a chain. More about it later. Note: The first block in a blockchain is termed as the Genesis Block. This is the block that is created during the inception of the chain.
Hash: Fingerprint for Data To simplify, hashing is a method in cryptography that converts any form of data into a unique string of text. The algorithm used for conversion is called the hashing algorithm. The fixed-size output from a hashing algorithm is called the hash. Features of Hashing Algorithm One-way: While it is easy to calculate the hash of data, it isn't possible to decode the original data from a hash. Like our example with the juice blender, we can make juice out of the fruit but not the reverse. Deterministic: A hashing algorithm always produces the same output for the same set of input. Fast Computation: The hash function should be able to compute the hash value without taking a considerable amount of time. Avalanche Effect: Any small change in the input data would produce an unpredictably different hash as output. Withstand Collisions: Since the length of a hash is fixed, theoretically, there is a chance of collision (where two different inputs producing the same hash for a given hashing algorithm). But it is very unlikely to happen. Also, a hash algorithm should withstand artificial collisions.
WHERE DOES IT COME FROM? Mining (mining rigs) computer processors connected to the blockchain that validate transactions by solving complex cryptographic hashing Algorithms Coins are given as rewards to the machine/person that solves the algorithm
BASIC PURPOSES 1. Confirms transactions 2. Adds block to blockchain WHAT GIVES IT VALUE? It is worth what people will pay for it Supply and Demand What gives our dollars value?
IS IT SAFE? Blockchain is unhackable Altering the ledger would require 51% ownership/takeover of the network Personal Hashing and cryptography hide password input Private keys are 64 characters long XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXX Danger still lies in 3rd party exchanges holding your wallet Typical Database Security = 1 central point for hackers to focus on Blockchain Secutiry = millions of points, hacker would have to simultaneously hack everycomputer
HOW IT WILL CHANGE THE WORLD People are in control of their money Electronic trading of tangible assets real estate vehicles Instantly and extremely cheaply send money abroad Avg transaction fee (Ethereum) = $1.10 Avg transaction fee (Western Union) = 9-10% Avg transaction fee (Visa) = 3% Give access of the global financial market to the nearly 2 billion people who do not/cannot get bank accounts Prevent fraud Voting Banking
QUESTION ?

More Related Content

MONEY ,BITCOIN,BLOCKCHAIN TECHNOLOGY

  • 1. An introduction to bitcoin, the blockchain, andcryptocurrency HASHIM SALIM
  • 2. About Me (HASHIM SALIM) Received first crypto token in 2016 when a friend sent me Dogecoin - Got into Bitcoin in 2017 - Part of wazirxwarrior (crypo educator) - Holding Token(btc,xrp,sxp,eth,dot,troy,wrx,matic,) - Blockchain resists change - Mining Complect electronic and communication engineering Software tester Broadband technician Full time cryptotrader
  • 3. The Story About Currency Examine a story what the world looked like before money was invented. It's a story built on the idea of Barter.
  • 4. From then on, banks became the intermediary or the middlemen of transactions. And to control the demand and supply of currency and to standardize trade, the government stepped in. The freedom of decentralization offered to the people by metal coins was somehow giving way to a more centralized concept of fiat currency through government-regulated financial institutions. This paper- printed currency has no intrinsic value of its own, whereas governments/central authorities give it an attributed value by declaring it as a legal tender in respective territories. The power that was previously controlled by wealthy individuals became institutionalized in the form of banks and governments. People believed that these centralized bodies provided protection as well as a reliable trust system for trade and the flow of information. But still, the system had its taboo of negatives. There existed scenarios when the banks or the central body suddenly collapsed. Discrepancies arose when they charged huge fees in exchange for keeping gold in their vault. Though the central authority seems to lessen the complexities in trade, it possessed several other threats which we have seen in history, like inflation and banks printing more currency.
  • 5. FIAT VS CYRPTOCURRENCY Fiat (USD, Euro, GBP) Cryptocurrency (Bitcoin, Ethereum, IOTA) Controlled by banks and governments Created by governments Inflationary Infinite supply Can be created at any time Open M F, 9 to 5 Controlled by the people that use it Created by solving math algorithms (mined) Deflationary. Finite supply Set amount released every year Open 24/7/365
  • 7. History: Bitcoin was first mentioned in a 2008 research paper published under the name Satoshi Nakamoto. Some mainstream websites began accepting bitcoins 2013.WordPress started in November 2012 followed by OKCupid in April 2013, Atomic Mall in November 2013, TigerDirect in January 2014, and Overstock.com that same month. In October 2013, Chinese internet giant Baidu had allowed clients of website security services to pay with bitcoins. During November 2013, the China-based bitcoin exchange BTC China overtook the Japan-based Mt. Gox and the Europe-based Bitstamp to become the largest bitcoin trading exchange by trade volume. The first bitcoin ATM was installed in October 2013 in Vancouver, British Columbia, Canada.
  • 8. Bitcoin is like email 16UwLL9Risc3QfPqBUvKofHmBQ7wMtjvM 31uEbMgunupShBVTewXjtqbBv5MndwfXhb INTERNET Hash@gmail.com Rose.@gmail.com
  • 9. WHAT IS IT? Bitcoin a peer-to-peer electronic cash System The payments in the system are recorded in a public ledger using its own unit of account, which is also called bitcoin. Deflationary Finite amount Cryptocurrency a virtual currency that uses encryption to prevent double spending Blockchain a decentralized, trustless ledger (list of transactions), on which only additions can be made The ledger history can never be change All computers on the blockchain have the ledger
  • 10. HOW IT BEGAN Satoshi Nakamoto Bitcoins anonymous creator Believed to be a pseudonym Published bitcoins whitepaper in 2009 Financial collapse of 2008 Poor fiscal management by banks, investment firms, and government The world had a need to get away from the central authority of money BLOCKCHAIN EXPLAINED (The Yap Tribe) All tribespeople know and keep track of every transaction within their village They all know who owns what and how much Any time a transaction is made all the people in the tribe are gathered and are told of the transaction Subsequently, they all update the database in their head of who owns what
  • 11. Abstract: Bitcoin is a peer-to-peer payment system introduced as open source software in 2009 by developer Satoshi Nakamoto. The payments in the system are recorded in a public ledger using its own unit of account, which is also called bitcoin. The bitcoin system has no central repository and no single administrator, which has led the US Treasury to call bitcoin a decentralized virtual currency. Although its status as a currency is disputed, media reports often refer to bitcoin as a crypto currency or digital currency Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. Called mining, individuals or companies engage in this activity in exchange for transaction fees and newly created bitcoins. Besides mining, bitcoins can be obtained in exchange for fiat money, products, and services. Users can send and receive bitcoins electronically for an optional transaction fee using wallet software on a personal computer, mobile device, or a web application.
  • 13. WHAT IS BLOCKCHAIN? Decentralization - Need of the hour With a centralized authority in place, better coordination is achieved. Centralization comes with its own shortcomings. The biggest downside is the abuse of power. In such cases, decentralization has great significance. The concept of decentralized networks laid the foundation for the evolution of Bitcoin blockchain. Decentralized networks aren't controlled by a single authority or a single node. Each node in the network share processing power and decision making processes. The nodes are independent and are distributed across the globe. Distributed Ledgers Ledger is a record of transactions. In normal cases, the ledger will be in the hands of authority. In the concept of distributed ledger, the same copy of the ledger will be distributed among a group of participants. The blockchain can be called a ledger that shares and synchronize information concurrently among all network participants. Therefore every record (usually transactions) in the ledger is seen by everybody and every change made to the ledger is reflected across all participants in the network. Thus blockchain can be called a distributed ledger. The group of technologies that follows the concept of distributed ledger among the participants is called Distributed Ledger Technologies or DLTs in short. There comes a variety of DLTs, where blockchain is one of them.
  • 14. let'scompare it with a notebook. A blockchain is like a notebook where pages are blocks. The pages in a notebook carry the data similar to how the block carries the data in blockchain. You see the data in those pages are always connected or linked to one another . Similarly in the blockchain, blocks are connected or linked to each other. To get an idea about how blockchain is a ledger, In a classroom, a student seeks the help of his classmate if he misses out any information say a few pages of notes.similarly, in the blockchain, if a node fails, the other participating nodes overcome the deficiency via helping the crashed nodes to sync up with the rest of the network.
  • 15. A Basic Dictionary of Blockchain Here is a quick read to the common terms related to blockchain. However, we'll see them in detail in the coming chapters. But for now, this glossary will help you grasp a general idea about the blockchain terms used commonly. Peer to Peer Network Blockchain is a peer to peer network. In a peer to peer (P2P) network, every computer can share data with each other. Each participant in the network has equal power and is commonly called a "node". These types of networks don't require any centralized storage facilities or server coordination and hence are majorly used in distributed systems. Node In its simple sense, a node is a machine in a blockchain network. A group of nodes connected together forms a blockchain network. A node can be a mining device, a storage device, or any other device which plays different kinds of role in different blockchain networks. Nodes are responsible for storing a copy of the transactions that are happening in the network. When a new node connects to a blockchain network, it downloads the entire copy of the blockchain to date and synchronizes with the network until it has the latest block held by all the nodes in the peer to peer network. Every time a new block is created, a copy of it is added to every node in the network. All miners in the blockchain network are nodes, however, all nodes are not miners.
  • 16. Miners Specific nodes in the blockchain network that are responsible for the verification and validation of transactions blocks. They play an important role in maintaining and extending the blockchain by adding new blocks to the In a public blockchain they are responsible for creating new currencies, hence the name miner. Transaction A transaction in blockchain can be defined as the smallest unit of a task in a blockchain network. Successful transactions that are agreed upon by the nodes in the network will become candidates for creating a block. Block Blockchain is a ledger, where transactions are recorded. The successful transactions are recorded inside a block. other words, a block represents a data structure for storing successful transactions along with metadata (block number, timestamp, etc.) and the blocks are linked together to form a blockchain. Blockchain A cryptographically linked sequence of blocks in a chronological order spanning across the nodes forms the blockchain. Blockchain is like an ever-growing book (ledger) with blocks forming the pages of it, in a sequential fashion and every node in the network having the exact same copy of the book. The network keeps on growing long as new blocks get added to the network.
  • 17. What does a Blockchain look like? we saw blockchain is a ledger. A ledger records transactions. In a blockchain, these transactions are recorded inside the block. These blocks are linked together to form a chain of blocks - blockchain. Pic1;simp blockchain Pic2 ;exact block Timestamp: The time at which the block was created. Nonce: This is a random number. But the significance of this will be discussed later when we talk about Proof of Work and Mining. For now, let's think of it as a random number. Root Hash: This is the combined hash of all the transactions included in the block, obtained by creating a Merkle tree of transaction hashes. Well, don't worry if you aren't familiar with these terms. We'll go in detail about hashes and Merkle trees in the coming section. Previous Hash: The hash value of the previous block's header. This is an important concept, which makes blocks a chain. More about it later. Note: The first block in a blockchain is termed as the Genesis Block. This is the block that is created during the inception of the chain.
  • 18. Hash: Fingerprint for Data To simplify, hashing is a method in cryptography that converts any form of data into a unique string of text. The algorithm used for conversion is called the hashing algorithm. The fixed-size output from a hashing algorithm is called the hash. Features of Hashing Algorithm One-way: While it is easy to calculate the hash of data, it isn't possible to decode the original data from a hash. Like our example with the juice blender, we can make juice out of the fruit but not the reverse. Deterministic: A hashing algorithm always produces the same output for the same set of input. Fast Computation: The hash function should be able to compute the hash value without taking a considerable amount of time. Avalanche Effect: Any small change in the input data would produce an unpredictably different hash as output. Withstand Collisions: Since the length of a hash is fixed, theoretically, there is a chance of collision (where two different inputs producing the same hash for a given hashing algorithm). But it is very unlikely to happen. Also, a hash algorithm should withstand artificial collisions.
  • 19. WHERE DOES IT COME FROM? Mining (mining rigs) computer processors connected to the blockchain that validate transactions by solving complex cryptographic hashing Algorithms Coins are given as rewards to the machine/person that solves the algorithm
  • 20. BASIC PURPOSES 1. Confirms transactions 2. Adds block to blockchain WHAT GIVES IT VALUE? It is worth what people will pay for it Supply and Demand What gives our dollars value?
  • 21. IS IT SAFE? Blockchain is unhackable Altering the ledger would require 51% ownership/takeover of the network Personal Hashing and cryptography hide password input Private keys are 64 characters long XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXX Danger still lies in 3rd party exchanges holding your wallet Typical Database Security = 1 central point for hackers to focus on Blockchain Secutiry = millions of points, hacker would have to simultaneously hack everycomputer
  • 22. HOW IT WILL CHANGE THE WORLD People are in control of their money Electronic trading of tangible assets real estate vehicles Instantly and extremely cheaply send money abroad Avg transaction fee (Ethereum) = $1.10 Avg transaction fee (Western Union) = 9-10% Avg transaction fee (Visa) = 3% Give access of the global financial market to the nearly 2 billion people who do not/cannot get bank accounts Prevent fraud Voting Banking