evolving your dollars - a journey to bitcoin
Post on 19-Aug-2014
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A JOURNEY TO BITCOIN
EvolvingYourDollars
Note:This content is supplemental. The core concepts should be presented via physical table top media for comprehension.
Print the physical media: http://1drv.ms/1sxY93Y
Authentic learning occurs when the learner connects each new concept to an existing one in their mind. The learned concept only sticks if an emotional reaction is elicited at the time of connection.This information is successfully shared face to face, with a heavy focus on the learner’s mood, interest, and questions.
Paper Dollars in Leather Wallets CORE IDEA
Individual Responsibility
CHALLENGE
Insecure User Counterfeiting
SOLUTION
Secure in Bank Bank Auditing
Next: Digital Dollars in Locked Bank Accounts
Digital Dollars in Locked Bank Accounts
CORE IDEA
Centralized Trust in 3rd Party Account Number (ID/Deposits) Account Password (Spending)
CHALLENGE
Bank Counterfeiting No External Auditing
SOLUTION
Transparent Accounts
Next: Digital Dollars in Transparent Locked Bank Accounts
Digital Dollars in Transparent Locked Bank Accounts
CORE IDEA
Unlimited Auditing by Anyone
CHALLENGE
Lack of User Privacy SOLUTION
Anonymize Accounts
Next: Digital Dollars in Anonymized Bank Accounts
VIS
Anonymity USER IDENTIFIED ACCOUNT ANONYMOUS ACCOUNT
John Doe265-33-74542-15-76833-23-4432Rockstr76L!fEroCKs5549
NameSSNDOB
Acct #User ID
Password
PIN
833-23-4432L!fEroCKs
Acct #Passw
ord
Digital Dollars in Anonymized Bank Accounts
CORE IDEA
Bank Does Not Know Who Owns Accounts Password Security & Management CHALLENGE
Account Metaphor• Privacy Risk if Acct #
Discovered• Payee Can Discover One’s
Balance• Limits Financial Management
SOLUTION
Key Metaphor• Lock Individual Units• Unlimited Keys• Use Few or Many
Next: Transparent Locked Dollar Sequence in Bank
Transparent Locked Dollar Sequence in Bank
CORE IDEA
Public Key (ID/Deposits) ID’s One or Many Units, Free to Create Private Key (Spending/Proof of Value) Unique to Each Public Key Transaction - Using A Private Key to Reassign A Unit’s New Public Key Wallet – Software or Hardware Used to Manage Public and Private Keys
CHALLENGE
Transparency Only In the Moment
SOLUTION
Record New Unit Keys Without Deleting Previous
Next: Transparent Locked Dollar Sequence w/ History in Bank
VIS
Keys PUBLIC KEY
1H7vmqxqA785FFH3H1FL8JH1bTi5xPDqVv PRIVATE KEY
5HpHagT65TZzG1PH3CSu63k8DbpvD8s5ip4nEB3kEsreAnchuDf
Transp. Locked D.Dollar Seq. w/ History in Bank
CORE IDEA
Transparent Ledger of Record Audits Through Time Each Line is a Transaction Record Value, Date, Previous Key, Current Key
CHALLENGE
Open to Revision by Bank Open to Challenge by Users
SOLUTION
Make Subsequent Transaction Records Dependent on Previous Ones
Next: Digital Dollars in Locked Bank Accounts
Transparent Ledger of Locked Digital Dollars w/ Transactions Chained Together in Bank
CORE IDEA
Block – Collection of Transactions from a Period of Time Validation – Each Block Proves Validity of Previous Block Block Chain – Ledger of Blocks Whose Security Increases with Time Hashing – Creation of Cryptographic Dependency Links
CHALLENGE
Bank is Single Point of Failure
SOLUTION
Duplicate the Block Chain into Limitless Copies
Next: Transparent Secure Block Chain Stored on Any User's Computer
VIS
Numerical Dependency DOMINOES HASHING
0 to 6 0 to
9999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999
Transparent Secure Block Chain Stored on Any User's Computer
CORE IDEA
Distributed Network – Peer to Peer Distributed Trust & Verification Units Controlled by Banks are Dollars Units Controlled by Users are Bitcoins CHALLENGE
Who Will Collect Transactions Create & Validate Blocks?
SOLUTION
Blocks Collected and Linked by Any Volunteer (Miner)
Next: Block Chain Stored By All & Extended by Competing Miners
VIS
Network Arrangements CENTRALIZED DECENTRALIZED DISTRIBUTED
Block Chain Stored By All & Extended by Competing Miners
CORE IDEA
Anyone Can Be a Miner Miners Compete to Solve Blocks Miners Confirm Validity of Solved Blocks Miners Who Solve Blocks First are Rewarded with Bitcoins Miners Prioritize Transactions Based on Voluntary Fees Hash Difficulty is Adjusted So a Block is Solved Every 10 Minutes
Bitcoin is A Distributed Network Crypto Currency
Core Idea Bitcoin Can Cost Nothing to Use Bitcoin Transactions are Transparent and Permanent Each User’s Self Interest Adds Security to the Network Participation Can be Mostly Anonymous The Bitcoin Network Belongs to No One and Everyone Bitcoin Has No State, Cultural, or Language Boundaries
That’s the Evolution from Dollars to Bitcoin!
The Distributed Block Chain is a World Changing Concept
Core Idea A Shared Indelible Record, Secured and Witnessed by Millions
Possible Applications Accounting Auditing Autonomous Entities Budgeting Business Structures Contracts
Copyright Insurance Records Lease Agreements Micro Transactions Prenuptial Agreements Promises
Reviews Service Ratings Speech Records Stock Ownership Warrantees Last Wills
Produced byDamon.Smith@gmail.com August 7, 2014
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