Introduction to Bitcoin, prepared by Bitcoin Manchester to initially be presented at the Manchester Free Software Festival in February 2014.
Contents:
* What is money?
* What is good money?
* How does fiat money work?
* What is Bitcoin?
* How does Bitcoin work?
* Why is Bitcoin important?
2. Overview
1. What is money?
2. What is good money?
3. How does fiat money work?
4. What is Bitcoin?
5. How does Bitcoin work?
6. Why is Bitcoin important?
5. One definition of money
“Money is the general medium of exchange,
the thing that all other goods and services
are traded for, the final payment for such
goods on the market”
Murray Rothbard
(referring to Ludwig von Mises)
27. Three difficult problems to solve
1. Defining the sequence of events (transactions)
2. Ensuring only address owners can spend coins
3. Ensuring address owners can only spend coins
once
29. Defining a sequence of events
a “timestamp server”
using cryptographic hashes
30. Ensuring only address owners can spend coins
Elliptic Curve Digital Signature Algorithm
31. Ensuring address owners can only spend coins once
Longest chain
(“true history”)
Genesis block
Dead forks
We need to make this hard to generate
to prevent double-spending
37. Reason 1
“Give me control of a nation's money supply,
and I care not who make its laws”
– Mayer Amschel Rothschild
38. Reason 2
“It is well enough that people of the nation do
not understand our banking and monetary
system, for if they did, I believe there would
be a revolution before tomorrow morning.”
– Henry Ford
39. Qualities of good money revisited
‣
Generally accepted
‣
Recognisable
‣
Uniform
‣
Divisible
‣
Scarce
‣
Durable
‣
Portable
46. Portability
“At WordPress.com, our mission is making publishing democratic —
accessible and easy for anyone, anywhere. And while anyone can start a free
blog here, not everyone can access upgrades (like going ad-free or enabling
custom design) because of limits on traditional payment networks.
Today, that changes: you can now buy WordPress.com upgrades with
bitcoins.
PayPal alone blocks access from over 60 countries, and many credit card
companies have similar restrictions. Some are blocked for political reasons,
some because of higher fraud rates, and some for other financial reasons.
Whatever the reason, we don’t think an individual blogger from Haiti, Ethiopia,
or Kenya should have diminished access to the blogosphere because of
payment issues they can’t control. Our goal is to enable people, not block
them.”
– Andy Skelton, WordPress.com
48. Portability
‣
Bitcoins are free or cheap to move around
(free as in beer)
‣
Bitcoin is free software
(free as in beer and speech)
‣
Bitcoin is free money
(free as in speech)
49. Related Info
Bitcoin: A Peer-to-Peer Electronic Cash System
‣
‣
Original paper - surprisingly accessible if you’re a bit
technical
‣
https://bitcoin.org/bitcoin.pdf
Money as Debt (video by Paul Grignon)
‣
‣
Explains the history of our monetary system
‣
Highly recommended
‣
http://www.youtube.com/watch?v=jqvKjsIxT_8