1. Bitcoin and the Blockchain
Brock Hager
Technologist and Bitcoin User
Iowa, USA

2. Topics Introduction Part One - What is bitcoin? Basics History
Part Two - What is the Blockchain?
The Blockchain Basics
Demonstration
Other blockchains
Questions

3. Introduction Brock Hager, Bachelors of Science MIS (2008)
Technology Professional for 8 years
Live and work in Iowa, USA
Known about bitcoin since (when Mt. Gox was largest exchange [70%])
Very few people in Iowa know about Bitcoin and follow it closely
Met Richmond and others from Ghana online

5. What is bitcoin?
Definition - a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

6. What is bitcoin?
Currency - Digital Currency that is used throughout the world
Also: Protocol and Network (will go into details later)
Not just one thing. It is a complete financial system with many different moving parts
Keep it simple – start with currency

7. Basics of bitcoin
New Terms - learning a new language. Compare to existing financial features.
Money
Coins - unit of measurement
Wallets - where bitcoins are stored
Transactions
Exchange and Exchanges
Blockchain - one cannot exist without the other
(Let’s go one by one…)

8. Money Most people know what money is Five characteristics of money
Stable in value
Generally accepted
Durable
Divisible
Portable
Apply these concepts to bitcoin
Bitcoin = Money

9. Coins USD = penny = 0.01 //Physical
BTC = satoshi = //Digital
1 BTC = $320 USD //Exchange Rate to USD
1 USD = BTC //Exchange Rate to BTC

10. Wallets Where bitcoins are stored Demo later on in this presentation
Functions: Balance, Send, Receive
Some wallets allow you to Buy and Sell bitcoin
Public Key and Private Key (shown in demonstration later on)
There are many different companies that make wallet software
Coinbase Wallet picture on next page

12. Send

13. Receive

14. Wallet - Keys Public Key Private Key
1L6ixpG1fEFgcbWgk8WNKsFi48gLSMKfP2
Give out to receive payments
Private Key
1G1fEgreEgk8WNKsFi48gLSM52KfP2
Never give it out to anyone ever
Security depends on Private Key or Password

15. Transactions Person A to Person B Wallet A to Wallet B Examples:
Pay for a good or service
Pay a friend for a book
96a1504e400363d
Demonstration later on

16. Exchange and Exchanges
Exchange – Item A for Item B
Equal value
Exchanges – online sites that will allow you to buy or sell bitcoin

17. Exchange Rate www.preev.com GHS to BTC USD to BTC
Fees for exchanging currency and for sending currency – extremely low with Bitcoin
Chart on next page

18. Currency Exchange

19. Where did it all begin?
Concept, Whitepaper, Testing and coding done throughout 2007 and 2008
Block 0 (zero) was the Genesis Block. It began on 1/3/2009
Creator was Satoshi Nakamoto
mystery

20. Questions about Bitcoin the currency?

21. PART TWO: The Blockchain
384889
384890
384891
384892
384893
unconfirmed

22. What is the Blockchain?
The blockchain is a public ledger where transactions are recorded.
Bitcoin Blockchain

23. What is a ledger?

24. Accounting Ledger

25. What are transactions?

26. What is the blockchain?
The blockchain is a public ledger where transactions are recorded.
Ledger = entire worksheet or database
Transaction = row in worksheet

27. The Basics of Bitcoin and the blockchain
Transactions move from Wallet A to Wallet B
All confirmed transactions are in “Blocks”
All Blocks exist on the Blockchain

28. Quick Look

29. The Blockchain – Picture 1

30. Demonstration
Send $1 to Richmond
See it on the blockchain

31. Open up wallet on iPhone
 Send icon
 Balance in Wallet
 Transactions with this wallet

32. Confirm Amount and Send
 Current Exchange Rate in real time

33. Add Public Address of Richmond
 Public Wallet Address

34. Confirm Send?

35. Complete!
 Status

36. Confirmation

37. Now What Do We Do??
We sent our fraction of a bitcoin from our Wallet out to Richmond’s Wallet Address.
Shows as unconfirmed
Lets go look at the blockchain!

38. Blockchain www.blockchain.info Richmond’s address
15VqRGFoVyH1oy1f2vWkXCTibxw9zmSY2C
Go to transaction
All information is public
Block
CTRL + F for Richmond’s address on the block’s page

39. Demo Overview Transaction is Unconfirmed and then Confirmed
Blocks are confirmed by miners approximately every 10 minutes
Can watch blockchain.info in real-time (if you are like me)

40. Bitcoin Network
Decentralized. No one owns it. No one can control it or stop it. Everyone would have to stop running each instance of the software.
Miners (will talk about in 2 slides)
Nodes (see picture on next slide)
Copies of the blockchain on each node and mining computer
Picture on next page

42. Who are these Miners?
Miners –computer operators that have software installed that solve complex math problems (was “x + 2 = 10” at the beginning)
Correct answer awards them a prize of 25 BTC (currently)
It is a RACE and a LOTTERY
Their block wins and the rest of the miners confirm that correct answer & confirm the block
Anyone can be a miner

43. Other blockchains Total list of all Coins (Forks)
Ethereum – cyptocurrency platform and programming framework
Namecoin – first fork of bitcoin
Citicoin – coin being created by Citigroup Bank
Factom – recording documents on a platform that sits on top of the bitcoin blockchain

44. More Information www.bitcoin.org
Whitepaper:
My Blog:
Bitcoin 101 series

45. Conclusion Bitcoin - What it is? How it works?
What the Bitcoin Blockchain is
The Basics of how it works
History
Demonstration
How to look at Currency Exchange
Bitcoin Network
Examples of other blockchains

46. QUESTIONS?

47. Thank You! Brock Hager @Brockton (twitter) brockhager@gmail.com
Find training on my blog: