2. PAPA JOHN’S, ANYONE?

3. 2012
You just won a lottery. You find out that you’ve won 1 million units of a certain currency ‘X’. When you saw the ‘1 million’, you were insanely happy. But when you saw the ‘X’, you immediately knew you’d been scammed. What is ‘X’?

4. MATHEMATICS OF BLOCKCHAIN
IMPLEMENTING AMCOIN – ASPIRING MIND’S OWN CRYPTOCURRENCY

5. WHAT THE HELL IS BLOCKCHAIN?

6. BTC – VALUE OVER THE YEARS
USD VALUE OF I BTC
2017
7223
2016
739
2015
376
2014
337
2012 12

7. THE AGENDA
What is it about bitcoin, that is causing this paradigm shift?
What problem does bitcoin actually try to solve?
How effectively does it actually solve that problem?
What the hell is blockchain?

8. Let’s go to the bank No actually, let’s get rid of the bank!
The implicit trust that we are forced to have
The transaction fee we are forced to pay
The time that we are forced to wait for

9. ISSUES THAT BLOKCHAIN TRIES TO ADDRESS
Private Ledger(Sub prime crisis) vs. Open Ledger
Centralized Authority vs. Distributed Authority
Hackable vs. Immutable (Hashing + Network Consensus)
Double Spending

10. BLOCKCHAIN IS AN ENCRYPTED LEDGER THAT
Contains record of all transactions from the moment of genesis

11. LET’S DESIGN A NEW TRANSACTION SYSTEM
con

12. LET’S DECENTRALIZE IT What if the central ledger gets corrputed
Decentralized and synced over a peer to peer network
The consensus helps in preventing malicious modification of transaction.

13. THE PROCESS A transaction is propagated through the network.
Miners verify each transaction (No money + Double spending)
A group of recent verified transactions are collected in a block
The block is chained to the blockchain VIA HASHING
This is broadcasted to all the nodes in P2P network, all of the nodes sync their copies of the blockchain
Once a block is chained, all these transactions now become a permanent immutable part of blockchain
(A new block is created every ten minutes)

14. WHAT DO MINERS DO?
Miners validate whether James has enough balance to make the transaction.
For bitcoin blockchain, explicit balance of wallets are not stored. Miner will calculate entire transaction history of James to find his balance.
Once verified, this transaction becomes a part of the block

15. DOUBLE SPENDING SOLVED
Each transaction is individually verified.
So if James tries to send 500 bitcoins simultaneously to two people, the transaction that is verified first would go through.
Once it goes through, it is broadcasted to all nodes, who update their copies of blokchain
The second transaction, will now be invalidated by any miner who gets it, because now his wallet doesn’t have enough balance
If two different miners verify and broadcast T1 and T2 simultaneously, the person who mines the next block, his T1/T2 will be kept, the other will be discarded.

16. INCENTIVE FOR MINING? 12.5BTC Mining Pools Depletion of Bitcoin?
Difficulty of mining increases after certain time intervals
Every 210,000 blocks mined that reward would be cut in half, until it eventually is reduced to zero after 64 halving events.
So, there are total 21 million bitcoins to be mined, that’s it

17. MYSTERIOUS TERMS
VERIFY
HASHING
CHAINING

18. ASSYMETRIC KEY CRYPTOGRAPHY
RSA
Primes p,q
n = pq
Generate key e and d
Enc = (Plain ^ e) modulo n
Plain = (Enc ^ d) modulo n

19. HASHING Deterministic Quick computation Pre image resistance
Collision resistant
High Min Entropy (Suppose you have an output value “Y”. If you choose a random value “k” from a wide distribution, it is infeasible to find a value X such that the hash of the concatenation of k and x will give the output Y.)

20. HASHING IN BLOCKCHAIN

21. BLOCK HEADER

22. TO SUMMARIZE A Blockchain is - Decentralized Immutable Public
Anonymous

23. SO, WHY DO WE TRUST BITCOIN

24. IS IT HACKABLE?
Network Consensus