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Crypto Currency Bitcoin - PowerPoint PPT Presentation

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Nathan Krussel. Crypto Currency Bitcoin. Roadmap. What is a Crypto Currency Purpose of Crypto Currency What is Bitcoin How does Bitcoin work Mining BTC How people perceive Bitcoin Current Uses for BTC Future of BTC. What is a Crypto Currency. A digital medium used in exchanges.

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Presentation Transcript
  • What is a Crypto Currency
  • Purpose of Crypto Currency
  • What is Bitcoin
  • How does Bitcoinwork
  • Mining BTC
  • How people perceive Bitcoin
  • Current Uses for BTC
  • Future of BTC
what is a crypto currency
What is a Crypto Currency
  • A digital medium used in exchanges.
  • Cryptographically secure
  • Distributed
  • Peer-to-Peer
  • Decentralized
  • Mutual distrust
  • “Anonymous”
purpose of crypto currency
Purpose of Crypto Currency
  • Remaining Anonymous
  • Deregulation of Currency
  • Secure Money Transactions
  • Public Ledger of Currency and Exchanges
  • Speedy Transactions
  • World Wide Use
    • No exchanges to worry about
  • No freezing of ones account
  • Reliable and Immutable
what is bitcoin
What is Bitcoin
  • Also known at BTC
    • Much like the U.S. Dollar is known as USD
  • The most commonly known Crypto Currency, and the pioneer that brought it to farm
    • Not the first electronic cryptographic currency
    • Most successful Crypto Currency to date
  • When most people think of a Crypto Currency they think of Bitcoin
  • Completely Digital Currency, nothing is on paper and isn’t backed by anything else other than its self.
what is bitcoin1
What is Bitcoin
  • Created in 2009 by Satoshi Nakamoto
  • Uses double SHA-256
    • SHA-256 of a SHA-256
  • Governed by the Block-Chain
    • This is distributed amongst the nodes, so no one person can modify it
    • Has the record of every transaction ever made
    • Roughly 13.5 GB as of 1/22/2014
    • 281988 blocks have been created
  • Can be broken up into 8 decimal places. USD is 2 decimal places.
    • This can be expanded in the future if the value of BTC increases dramatically
how does bitcoin work
How Does Bitcoin Work
  • Based off a public ledger known as the block-chain
    • Everything about the transactions (from, to, how much, when) is all public knowledge
    • This creates an open nature.
  • Aims to create a new block every 10 minutes
    • Does this by adjusting the difficulty
    • Difficulty changes ever 2016 blocks
  • To “solve a block” one must compute the correct hash
    • There is a target number, that the hashed value must be equal to or lesser than.
block chain
Block Chain
  • Not a linear chain, but one that has forks and self heals.
    • Forks occur when two blocks are presented as solved within a few seconds of each other.
    • The “correct” chain is the one with the longest path back to the genesis block.
    • The fork that is the incorrect, now all those blocks in that fork become invalidated.
  • The faster the hashing rate of the network as a whole, the more secure the block chain is
  • The chain will guarantee a block is validated after 100 blocks are attached onto the end of the chain.
difficulty changes
Difficulty Changes
  • Difficulty changes every 2016 blocks to ensure it takes about 10 minutes a block.
  • Dynamically adjusted by the entire network.
  • Difficulty is calculated as follows
    • Difficulty = Difficulty_1_target/current target
  • Target is what the sha256 block header must be equal to or less than
    • The lower the target, the more difficult this is to solve.
  • August 5th 2013 Difficulty: 31,256,960.73
  • Jan 23rd 2014 Difficulty: 1,789,546,951
solving a block
Solving a Block
  • To solve a block the SHA-256 of the block header must be equal to or less than the target
  • Every bitcoin client compares the actual time it took to solve the 2016 blocks to the two week goal.
    • The modifies the target by the percentage difference.
    • A single retarget never chances the target by more than a factor of 4, so there aren’t large spikes in difficulty.
mining bitcoin
Mining Bitcoin
  • CPU
    • Was the original way to do it, was initially solo mining (not pooled) and you got all of the block or none of it (50 BTC)
    • Slow compared to today’s standards.
    • Core i5 2500 about 20.6 megahash/s
mining bitcoin1
Mining Bitcoin
    • Somebody wrote a program that would use the GPU’s within PC’s to mine, this was discovered to be more energy efficient per hash, and gave you an advantage in higher hash rates.
    • AMD/ATI GPU’s were much faster and more efficient per megahash using OpenCL
    • AMD 6870 (3 year old card as of now purchase price about 150 USD) ~300 megahash/s
mining bitcoin2
Mining Bitcoin
  • Specialty hardware/ASIC
    • These have been recently released, and are designed specifically just to mine for BTC
    • Much more expensive then GPU’s, but exponentially faster.
    • Bitforce 60 about 2500 purchase price, 60 gigahash/s
    • Newer models will cost 12,000 but produce 3 terahash/s or faster.
how people perceive bitcoin
How People Perceive Bitcoin
  • Many people see it as a way to do nefarious activity and that’s all the use they can see for it.
  • Others see it as a way to “stick it to the man”
  • Some who are just mining see it as a way to cash out and make some money
  • Certain Individuals see this as just a different currency that you are in complete control of.
current uses for bitcoin
Current Uses for Bitcoin
  • Some retailers take BTC
    • Overstock is the newest one, newegg has hinted at it.
    • Sacramento Kings now accept BTC
  • A few smaller online retailers take BTC
  • Many miner producing companies accept BTC
  • Use an exchange to trade BTC out for your currency of choice.
  • Bitcoin is still in its infancy of adoption, so the list of people who accept it grows everday
future for bitcoin
Future for Bitcoin
  • More retailers will begin to accept BTC
  • Used in international trading to avoid currency exchanges
  • Become as common place as credit cards
  • Less volatility in hard currency value (USD)
  • Nefarious uses
  • Currency Flops and becomes worthless