Cryptocurrency
Who am I?
• Miguel Duarte
• Robotics & AI PhD Student @ ISCTE-IUL
• Geek, Hacker, Maker
• Sci-fi, Tech and Robotics enthusi...
Outline
• Context
• Transactions and the block chain
• Mining
• Issues
• Altcoins
• Discussion
What is a cryptocurrency?
Digital currency that uses cryptography for
security. Cryptocurrencies are generally
anonymous a...
Why does it matter?
• Transactions are irreversible, fast, and have low
fees
• Universal (within the internet)
• Decentral...
1 BTC = 100,000,000 Satoshi
Account Balance
Alice 10
Bob 20
Celso 9999
… …
Bitcoin is a public ledger,
kept by every node
in the network
______
______
______
______
______
______
______
______
______
______
______
______
______
______
______
______
______
___...
Addresses
• 27-34 alphanumeric characters
• Generated via public-key cryptography
• Any user can generate multiple address...
Private Key Public Key
Public-key Cryptography
Wallet
Digital Signature
Hello World
0601d109d0d2b0fa9c4484b4a5c94ee5ecc62cc
ec3bd7d99e972d18994d0e2e42f6d0fcfc41216a
5ab72ee7af9...
Alice Bob
Send 20 BTC
from ALICE to BOB
Address:
ALICE
Address:
BOB
Balance:
30 BTC
Balance:
20 BTC
Alice Bob
Send 20 BTC
from ALICE to BOB
Address:
ALICE
Address:
BOB
Balance:
10 BTC
Balance:
40 BTC
Transaction
Transactions
Sender: Alice
Receiver: Bob
Amount: 20
Digital Signature
Transactions
Previous TX: tx550
Index: 0
Sender: Alice
Receiver: Bob
Amount: 20
Digital Signature
tx550: Celso->Alice(20)
...
Transactions
Previous TX: tx550
Index: 0
Sender: Alice
Receiver: Bob
Amount: 20
Digital Signature
tx550: Celso->Alice(20)
...
Transactions
Previous TX: tx550,tx1600
Index: 0
Sender: Alice
Receiver: Bob
Amount: 20
Digital Signature
Previous TX: tx55...
Transactions
Previous TX: tx550,tx1600
Index: 0
Sender: Alice
Receiver: Bob
Amount: 20
Digital Signature
Previous TX: tx55...
Account Balance
Alice 10
Bob 20
Celso 9999
… …
Blocks
Alice -> Bob (20)
Alice -> Celso (10)
…
Bob -> Marley (33)
!
Previous Block Hash
Current Block Hash
Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (20)
h...
Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (50)
h...
Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (50)
h...
Block chain forks
………
…
… …
Block chain forks
………
…
… …
Mining
• Mining is the process of adding blocks to the block
chain, thereby confirming a set of transactions
• It uses a pr...
Mining
"Hello, world!0"
1312af178c253f84028d480a6adc1e25e81caa44c749ec81976192e2ec934c64
"Hello, world!1"
e9afc424b79e4f6a...
The difficulty (number of zeros) varies depending
on the hashrate of the network, which
approximates the block time to 10 m...
Mining
• Miners that generate valid blocks are rewarded
• The rewards halves every 4 years (geometric
progression) — curre...
Mining
• CPU (< 0.04GH/s)
• GPU (< 1GH/s)
• FPGA (< 1GH/s)
• ASIC (< 1,000GH/s)
• Pool mining
1 G = 1,000,000,000
(1 billi...
Issues
• Potential loss/theft of private keys
• Not truly anonymous
• Double spending and the 51% attack
Double Spending
Previous TX: tx551
Sender: Trudy!
Receiver: Alice!
Amount: 20
tx551: Bob->Trudy(20)
status: unspent
Previo...
Altcoins
Litecoin
• One of the first Bitcoin forks (2011)
• Introduced the scrypt proof-of-
work algorithm
• Block time: 2.5 minutes...
Dogecoin
• A fork of Litecoin
• Made as a joke, features the famous
Doge meme with the friendly Shiba Inu
• No coin limit ...
$30k
$55k
$30k
Ɖ30M
$30k
ping @miguelduarte42
10k giveaway
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Cryptocurrency for Dummies
Próximos SlideShares
Carregando em…5
×

Cryptocurrency for Dummies

11.455 visualizações

Publicada em

This talk was presented by Miguel Duarte (http://miguelduarte.pt) at Codebits (VII) (http://codebits.eu).
A video of the talk is available here: http://youtu.be/PgETyozr2cM

There original abstract was as follows:

You've probably heard of Bitcoin, right? Bitcoin is original cryptocurrency which exploded in value in the last few months and paved the way for alt-coins such as Litecoin, Quark or Dogecoin. Currently, 1 bitcoin is worth nearly $1000, which left some of the original investors and miners, with thousands upon thousands of bitcoins, quite rich. Recently, even the Dogecoin community helped fund Jamaica's bobsled team to help go to the Sochi Winter Olympics by donating 30 million dogecoins, or roughly $30,000! What the hell is that all about? This talk aims to explain what cryptocurrencies are, how they work, and how they create value.

Here are some of the topics I intend on covering:

-the advantages of cryptocurrencies;
-the basics of the blockchain;
-how new blocks are mined using proof-of-work algorithms;
-how to mine using CPU, GPU or even ASIC miners;
-differences between Bitcoin's algorithm and scrypt-based alt-coins;
-security considerations;
-an overview of how cryptocurrencies are currently being used in society;
-how cryptocurrencies can change the world's economic landscape.

Publicada em: Tecnologia, Educação

Cryptocurrency for Dummies

  1. 1. Cryptocurrency
  2. 2. Who am I? • Miguel Duarte • Robotics & AI PhD Student @ ISCTE-IUL • Geek, Hacker, Maker • Sci-fi, Tech and Robotics enthusiast • IEEE, NodecopterLX, GDG, IT
  3. 3. Outline • Context • Transactions and the block chain • Mining • Issues • Altcoins • Discussion
  4. 4. What is a cryptocurrency? Digital currency that uses cryptography for security. Cryptocurrencies are generally anonymous and not issued by any central authority.
  5. 5. Why does it matter? • Transactions are irreversible, fast, and have low fees • Universal (within the internet) • Decentralised, no trust necessary • The supply of coins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual
  6. 6. 1 BTC = 100,000,000 Satoshi
  7. 7. Account Balance Alice 10 Bob 20 Celso 9999 … … Bitcoin is a public ledger, kept by every node in the network
  8. 8. ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______
  9. 9. Addresses • 27-34 alphanumeric characters • Generated via public-key cryptography • Any user can generate multiple addresses 31uEbMgunupShBVTewXjtqbBv5MndwfXhb
  10. 10. Private Key Public Key Public-key Cryptography Wallet
  11. 11. Digital Signature Hello World 0601d109d0d2b0fa9c4484b4a5c94ee5ecc62cc ec3bd7d99e972d18994d0e2e42f6d0fcfc41216a 5ab72ee7af96d213e1c314abdde40f52731ff24c 2bf8f7323 Hello World Private Key Public Key
  12. 12. Alice Bob Send 20 BTC from ALICE to BOB Address: ALICE Address: BOB Balance: 30 BTC Balance: 20 BTC
  13. 13. Alice Bob Send 20 BTC from ALICE to BOB Address: ALICE Address: BOB Balance: 10 BTC Balance: 40 BTC Transaction
  14. 14. Transactions Sender: Alice Receiver: Bob Amount: 20 Digital Signature
  15. 15. Transactions Previous TX: tx550 Index: 0 Sender: Alice Receiver: Bob Amount: 20 Digital Signature tx550: Celso->Alice(20) status: unspent
  16. 16. Transactions Previous TX: tx550 Index: 0 Sender: Alice Receiver: Bob Amount: 20 Digital Signature tx550: Celso->Alice(20) status: spent
  17. 17. Transactions Previous TX: tx550,tx1600 Index: 0 Sender: Alice Receiver: Bob Amount: 20 Digital Signature Previous TX: tx550,tx1600 Index: 1 Sender: Alice Receiver: Alice Amount: 2 Digital Signature tx550: Celso->Alice(15) status: unspent tx1600: Bob->Alice(7) status: unspent
  18. 18. Transactions Previous TX: tx550,tx1600 Index: 0 Sender: Alice Receiver: Bob Amount: 20 Digital Signature Previous TX: tx550,tx1600 Index: 1 Sender: Alice Receiver: Alice Amount: 2 Digital Signature tx550: Celso->Alice(15) status: spent tx1600: Bob->Alice(7) status: spent
  19. 19. Account Balance Alice 10 Bob 20 Celso 9999 … …
  20. 20. Blocks Alice -> Bob (20) Alice -> Celso (10) … Bob -> Marley (33) ! Previous Block Hash Current Block Hash
  21. 21. Block chain Alice -> Bob (5) Alice -> Celso (10) … Bob -> Marley (33) …… hash_block100 … hash_block101 Bob -> Alice (20) hash_block99 … hash_block100 … The public ledger contains transactions, not balances. block 100
  22. 22. Block chain Alice -> Bob (5) Alice -> Celso (10) … Bob -> Marley (33) …… hash_block100 … hash_block101 Bob -> Alice (50) hash_block99 … hash_block100 … block 100
  23. 23. Block chain Alice -> Bob (5) Alice -> Celso (10) … Bob -> Marley (33) …… hash_block100 … hash_block101 Bob -> Alice (50) hash_block99 … hash_block100 … block 100
  24. 24. Block chain forks ……… … … …
  25. 25. Block chain forks ……… … … …
  26. 26. Mining • Mining is the process of adding blocks to the block chain, thereby confirming a set of transactions • It uses a proof-of-work algorithm • The text of the block + a nonce are hashed using SHA256 • A block is considered valid when the resulting hash starts with a certain number of 0s
  27. 27. Mining "Hello, world!0" 1312af178c253f84028d480a6adc1e25e81caa44c749ec81976192e2ec934c64 "Hello, world!1" e9afc424b79e4f6ab42d99c81156d3a17228d6e1eef4139be78e948a9332a7d8 ... "Hello, world!4249" c004190b822f1669cac8dc37e761cb73652e7832fb814565702245cf26ebb9e6 "Hello, world!4250" 0000c3af42fc31103f1fdc0151fa747ff87349a4714df7cc52ea464e12dcd4e9
  28. 28. The difficulty (number of zeros) varies depending on the hashrate of the network, which approximates the block time to 10 minutes
  29. 29. Mining • Miners that generate valid blocks are rewarded • The rewards halves every 4 years (geometric progression) — current reward is 25 BTC • Max number of BTC: 21 million • After 2033, rewards will be based on transaction fees
  30. 30. Mining • CPU (< 0.04GH/s) • GPU (< 1GH/s) • FPGA (< 1GH/s) • ASIC (< 1,000GH/s) • Pool mining 1 G = 1,000,000,000 (1 billion)
  31. 31. Issues • Potential loss/theft of private keys • Not truly anonymous • Double spending and the 51% attack
  32. 32. Double Spending Previous TX: tx551 Sender: Trudy! Receiver: Alice! Amount: 20 tx551: Bob->Trudy(20) status: unspent Previous TX: tx551 Sender: Trudy! Receiver: Trudy! Amount: 20
  33. 33. Altcoins
  34. 34. Litecoin • One of the first Bitcoin forks (2011) • Introduced the scrypt proof-of- work algorithm • Block time: 2.5 minutes, limited to 21 million LTC like BTC • Currently #2 cryptocurrency
  35. 35. Dogecoin • A fork of Litecoin • Made as a joke, features the famous Doge meme with the friendly Shiba Inu • No coin limit (100 billion until 2014 + 5 billion per year afterwards) • much fast (1 minute block time) • Amazing community that loves to tip and fund charities (/r/dogecoin)
  36. 36. $30k $55k $30k Ɖ30M $30k
  37. 37. ping @miguelduarte42 10k giveaway

×