Block

Chain

Blockchain is this hot new buzzword. We have to start with the big one, Bitcoin.
Bitcoin was started on October 31, 2008. Open-sourced Jan 3, 2009. Creator pseudonym Satoshi Nakamoto. Technically not first cryptocurrency, DigiCash came in 1990. First decentralized virtual currency.

What is money?

    • Durable
      Portable
      Fungible
      Divisible
      Scarce
    • Medium of exchange: portable, durable, fungible Unit of account: divisible, fungible Store of value: durable, scarce, fungible Next: things we've used as money
    Durable
    Portable
    Divisible
    Fungible
    Scarce
    Shells Used on most continents. Still a legal currency in Papua New Guinea alongside their paper money.
    Durable
    Portable
    Divisible
    Fungible
    Scarce
    Stone money 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.
    Durable
    Portable
    Divisible
    Fungible
    Scarce
    Gold (and silver). Pretty popular. Still used today.
    Durable
    Portable
    Divisible
    Fungible
    Scarce
    US dollars Used to represent 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.

    How could we make
    digital currency?

    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.
    Joshua 25
     - 15
    Jack 12
     + 15
    Dave 9
    George 40
    A ledger keeps track each person's money. To send money, reduce my account and increase their account. Like Paypal. BUT - requires trust

    Cryptography

    We can use public and private keys to control balances in an anonymous ledger.
    1D4FA353C82B4 11.5
     - 11
    37563EA8932FB 6.0
    D163512ECD12E 9.0
    D15F73E98432A 13.5
     - 4
    333BCBA13A54C 9.7
    8DBDA78D8BEF2 1.1
    C5F83ED13497A 6.0
     + 15
    92A1E683111A2 30.2
    Then instead of sending a payment from "Joshua" to "Jack", it's a payment from "private keys A and B" to "public key C".
    There's a company that actually did this, called DigiCash. they maintained a ledger with cryptographically controlled balances. Consumers weren't concerned enough about security or privacy and they ran out of money.

    How to decentralize?

    You get a ledger! You get a ledger!

    YOU ALL GET A LEDGER!!

    Double Spending

    Real world, double spending is easy. Two checks First deposit "wins" All about timing How do you fix this?
    hashbrowns

    Hashes

    Proof of Work

    Hash Pointers

    Applications

    Currency

    Digital Assets

    payment information usernames DNS

    Identity

    embedding a hash in the blockchain demonstrates an item's existence at point in the past

    Proof of Existence

    Payment Infrastructure

    DAO Ethereum/RootStock

    Smart Contracts

    Further reading:

    Credits