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Block

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Block

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Chain

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Chain

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Blockchain is this hot new buzzword. + We have to start with the big one, Bitcoin.
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Bitcoin was started on October 31, 2008. Open-sourced Jan 3, 2009. Creator pseudonym Satoshi Nakamoto. + Technically not first cryptocurrency, DigiCash came in 1994. + First decentralized virtual currency.

What is money?

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Durable + Portable + Divisible + Fungible + Scarce
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Portable
Divisible
Fungible
Store of
value
Scarce
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Used on most continents, still a legal currency in Papua New Guinea alongside their paper money.
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Portable
Divisible
Fungible
Store of
value
Scarce
Yap Stones (Rai)Rai stones
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Stone money was made in Micronesia and Guam, transported to the island of Yap as currency. Value from the story of how hard it was to transport. Ownership transferred by oral history, stones not moved.
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Portable
Divisible
Fungible
Store of
value
Scarce
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Pretty popular. Still used today.
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Portable
Divisible
Fungible
Store of
value
Scarce
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Used to be a currency form of gold and silver, after World War 1 pretty much everybody decided to switch to unbacked "floating money" so they could fuel government expenses with inflation.
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How could we make
digital currency?

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If I send you a file, I still have the file. Digital items can be duplicated; how can I send you something the way I do in the physical world? The Yapanese people had the right idea: use a ledger.
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+ - - - - - - + + + - - - - - - - - + + + + + + + + + + +
Durable
Portable
Divisible
Fungible
Store of
value
Joshua25 - 15
Gift CardsJack12 + 15
Dave9
George40
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We can use a ledger to keep track of how much money each person has. If I want to send money, we reduce my account and increase someone else's account. + This is similar to how Paypal works at a simple level. + Problems: + Everyone has to trust whoever maintains the ledger, since they can monitor it and change it.
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How can you make a
digital currency?

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Cryptography

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We can use public and private keys to control balances in an anonymous ledger.
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+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + +
1D4FA353C82B411.5 - 11
37563EA8932FB6.0 + 15
D163512ECD12E9.0
D15F73E98432A13.5 - 4
333BCBA13A54C9.7
8DBDA78D8BEF21.1
C5F83ED13497A6.0
92A1E683111A230.2
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Then instead of sending a payment from "Joshua" to "Jack", it's a payment from "private keys A and B" to "public key C".
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Hash Pointers

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Proof of Work

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Applications

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Credits