Bitcoin

฿

History of Money

Barter

Goods *BECOME* Money

• Acceptable• Durable• Portable• Scarce• Divisible• Recognizable

Gold Storage -> Paper Receipts

England, 17th Century

• Safety for travelers

• Charles I’s Royal Mint loan (1640)

• Goldsmiths• Fungibility• Lending

Bank of England Gold Receipts

1:1 -> 1:2 -> 1:10

1:1 -> 1:2 -> 1:10

1:1 -> 1:2 -> 1:10

Bank Runs

Government Takes Over Banking

1:1 -> 1:2 -> 1:10

1694 – Bank of England Monopoly1913 – US Federal Reserve Monopoly

1:1 -> 1:2 -> 1:10

1:1 -> 1:2 -> 1:10

1971 – Executive Order 11615

Who Will be the Aristocrats?

Producers vs Central Bank Cronies

Bad Money -> Bad Culture

Ancient Rome27AD – Augustus – Denarius 95% Silver45 coins / pound Gold

117AD – Trajan – Denarius 85% Silver

180AD – Marcus Aurelius – Danarius 75% Silver

200AD – Septimius – Denarius 60% Silver

230AD – 72 coins / pound Gold

300AD – Diocletian – Argenteus Silver Coin60 coins / pound Gold

330AD – Constantine – 72 coins / pound Gold

210AD – Caracalla – Denarius 50% Silver50 coins / pound Gold

268 AD – Denarius 0.5% Silver

Same idea, different technology.

Ancient China

- 7th Century (Tang Dynasty). Merchant receipts of deposit during.

- 13th Century (Yuan Dynasty). Marco Polo: "How the Great Kaan Causeth the Bark of Trees, Made into Something Like Paper, to Pass for Money All Over his Country."

Enforcing Government Money

Enforcing Government Money

Enforcing Government Money

Enforcing Government Money

Enforcing Government Money

Money Wasn’t Always Government Issued

Multiple Currencies – No Problem

Electronic Money• EGold -- 1996 to 2009$2 billion transactions / year (2008)

• Liberty Reserve -- 2006 to 2013“Liberty Dollars” “Liberty Euros”~ $0.9 billion transactions /year

• Also, Goldmoney.com, e-Bullion.com, CrowneGold.com, Pecunix.com, INTgold.com.

Peer to Peer

Peer to Peer

Decentralization & the Distributed Consensus Problem

2008 – Satoshi’s Paper

History & $ Price of 1 BitcoinOct 2008: Satoshi PaperJan 2009: First wallets begin workingOct 2009: $1 = 1,309.03 BTCMay 2010: Pizza sells for 10,000 BtcJuly 2010: MtGox EstablishedJuly-Nov 2011: $32 -> $2March 2013: Cyprus Crisis. $40 -> $260 -> $90 -> $120May 2013: Forbes “Living On Bitcoin For A Week“May 2013: First major VC investment in Bitcoin companiesJuly 2013: Bitcoin FundOct 2013: Silk Road ShutdownOct-Nov 2013: Chinese Demand. $120 -> $1200 -> $800Dec 2013: China restricts banks from using BitcoinJan 2014: BitInstant CEO arrestedFeb 2014: Apple Bans Bitcoin AppsJun 2014: Apple allows Bitcoin AppsJune 2014: Mt Gox BankruptcySept 2014: Overstock.com accepts Btc

Market CapitalizationEuro (M2): $16 TrillionDollar (M2): $14 Trillion

Ukraine (M2): $95 Billon

Mongolia (M2): $5.1 BillionGeorgia (M2): $4.8 Billion

Bitcoin: $4.5 Billion

Moldova (M2): $3.9 BillionArmenia (M2): $3.3 Billion

Litecoin: $125 MillionSao Tome & Principe: $100Million

Bitcoins in the World

Bitcoin Bars

Kreuzberg, Berlin

http://bitcoinsinberlin.com

New York Open Air Bitcoin Exchange

A taxi in Kenya

Bctip.org

Bitcoin ATM in Kyiv

Where to get Bitcoins

Bitcoin Technology

• Send Money Anywhere• For FREE• Instantly• Anonymously*

Post Office vs. Email

Public TransactionTransactions aren’t actually encoded, in fact, they’re public.

Bitcoin Mining

Crypto is used to Authenticate transaction – prevent double spending, false ownership.

Bitcoin Mining

Bitcoin Mining

Bitcoin Mining

Bitcoin Mining

Bitcoin Mining Hash Rate

Mining Pools

51% Attack?

Alt-Coins

“More powerful than the tread of mighty armies is an idea whose time has come.” ~ Victor Hugo

??? vs. Bitcoin

Disruptive technology

Satoshi’s Motivation?

Headline embedded in genesis block:

"Chancellor on brink of second bailout for banks"January 3, 2009, Times of London.

Other Uses of Decentralized Consensus Technology

Types of Bitcoin Businesses- Normal Businesses Adopting New Payment Systems

- Merchant Services (BitPay)

- Exchanges (Coinbase, BitStamp, Kuna)

- Wallet Companies

- Consultants

- Smart Contract / Digital Property Innovators(Master Coin vs Ethereum)

- Miners

- Mining equipment manufacturing / sales

End.

Did you like this lecture?

Bitcoin me: 1Hi3ZLNib1Nte2JX7dd3vYAfJqULZLgjKr

http://RomanSkaskiw.com/