A relatively non-technical introduction to Bitcoin and its underlying technology the Blockchain. The opening presentation for summer 2015 Blockchain University courses.

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Bitcoin & the Blockchain
An Introduction
by Christopher Allen <ChristopherA@LifeWithAlacrity.com>
June 6, 2015
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What is Bitcoin?
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Is it a coin?

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What is Bitcoin?
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Is it a coin?

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What is Bitcoin?
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Is it a coin? Is it a commodity?

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What is Bitcoin?
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Is it a coin? Is it a commodity?

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So what is Bitcoin?
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So what is Bitcoin?
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Bitcoin is a consensual fantasy!

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So what is Bitcoin?
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But so is this!

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So what is Bitcoin?
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Both are a consensual reality!

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This paper is currency because
someone stands behind it…
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A community, a consensus of
people, decided to believe in it
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These bits are currency because
someone bought a pizza…
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May 22nd 2010, one pizza for 10,000 BTC ($2,249,000 today)

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A community, a consensus of
people, came to believe in Bitcoin
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May 22nd 2010, one pizza for 10,000 BTC ($2,249,000 today)

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…and Bitcoin has been a
currency ever since.
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Before there was currency ancient
cultures could only barter
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But you could only barter if
someone wanted your goods
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The invention of currency allowed
trade across distance and time
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North America The Mediterranean

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These currencies were
hard to obtain or duplicate
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North America The Mediterranean

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So what prevents Bitcoin
from being duplicated?
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You can't, because the
secret of Bitcoin is…
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…there is no such thing
as a Bitcoin!
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The secret of Bitcoin is that it is
really only ledger!
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Ledgers are almost as
old as currency
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But in the 14th-century:
Double Entry Accounting!
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Invented in 2008:
The Blockchain Ledger!
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Bitcoins don't exist, because
they are just a balance
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In a ledger, all debits
must equal credits
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Debits Credits
-25 +25
-100
+70
+30

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If everything must balance, where
does the first credit come from?
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Debits Credits
-25 +25
-100
+70
+30

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via a Tetris-like puzzle game
called mining
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There is a winner
every 10 minutes…
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…and the puzzle gets
harder every two weeks
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This game incentives 5698 players
to keep fair copies of the ledger
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Redundantly, all over the world.
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There is no center,
no controls them—there is no
“One ring to rule them all”
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Instead, we have have achieved
a consensus, about a consensual
currency, where no one can cheat,
and everyone can participate.
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But the Blockchain is not only for Bitcoin…
•Self-auditing books
•Shares of other kinds of assets (stocks,
commodities, etc.)
•Financial instruments and insurance
•Smart contracts
•These consensus techniques can also be used
for many other things.
Bitcoin is only the first app of the Blockchain
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In some ways, Bitcoin is like this
bank of lockers
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38. Each locker
has…
•An identifying number
•A slot that money can
be put in
•A window to see
inside
•A lock that requires a
key
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39. •These lockers are
secure
•The windows are
unbreakable
•The metal can't be cut
•All the lockers are
bolted to the ground
•There are almost an
infinite number of
lockers
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40. •The lockers are in a
public place
•Anyone may see what
is inside any locker
•Anyone can put
money in a locker
•Anyone can see the
identifying number,
but not who owns it
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41. •Each locker is free of
charge
•Anyone may claim an
unused locker, for
which they get a key
•You may have as
lockers as you choose
•The keys are
unforgeable
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42. •You many only open
the locker with the key
•Once you open a
locker, you take out
the money and throw
away the key (the
lockers are free!)
•If you loose the key,
the money is locked
away forever
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43. •Transactions can be
done without people
meeting in person
•No banks or
governments are
involved
•Anyone peeking can
only know that a
transaction was made
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44. •As of today, there
Bitcoins worth
$3,373,831,169 in the
lockers
•Today, over 130,000
lockers transfered
money
•There are currently
5687 people guarding
these lockers
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Questions?
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