1. Bitcoins and the Digital Economy Presented By: Matt Blackman

2. Defining Bitcoins or BTCs Currency Open Source Decentralized Non-Localized Peer generated

3. Big Picture How do they look? What use do they serve? What keeps Bitcoins secure? o Times they have been secure How does their economy compete and plan to survive?

4. When Were These Bits Coined? Idea proposed by Saroshi Nakamoto in 2008 o A need for a third-party free payment system o Anonymous money transfers Network went live January 3, 2009

5. Itty Bitty Uses ^ Not Entirely True ^ Easy solution for monetary exchanges Provides anonymity needed by somesome Investable money market

6. The Little Giant http://www.thinlinedata.com/

7. Otherwise Impossible http://www.marketplace.org/sites/default/files/styles/slide-show-2-column-530x396/public/Silk-Road-Slide-1_0.jpg

8. Making $$$$$$$ http://www.bitcoincharts.com/bitcoin/

9. What Bitcoins look like

10. Well actually... 319475h26cmg7eir85k38960125f834e or A string of characters o Around 33 characters to be inexact o Leading with a 1 or 3

11. Where do Bitcoins come from Mommy? Generated by users by mining Mining creates blocks of bitcoin transaction solutions Incentive given to miners through Bitcoin rewards No central distributer of Bitcoins

12. Et Compute Brute Psuedo-Random Hash Generation o Accept lowest value Millions of processors mining o Over 275 PetaFlops https://en.bitcoin.it/w/images/en/f/f6/Quick-and-dirty-4x5970-cooling.jpg

13. Blocks to Bits Market started at 50 BTC per block Number halved every 210,000 blocks Set Bitcoin limit o 21 Million Bitcoins More Bitcoins, less reward Good news o Value of BTCs in USD always rises

14. Blocks For Adults

15. Stacking Blocks New block found every 10 minutes Block is around 80 bytes size 80 bytes * 6 blocks/hour * 24 hours/day * 365 days/year = 4.2 MB http://cache.kotaku.com/assets/images/9/2011/02/800px-minecraft_classic.png

16. Public Records Block information public Names not signed to block o Only user keys

17. Who Monitors Bitcoins? http://upload.wikimedia.org/wikipedia/commons/9/95/Capital_Building.JPG http://www.peakpositions.com/PeakServerRoom.jpg http://upload.wikimedia.org/wikipedia/commons/thumb/8/84/Stantheman.jpg/230px-Stantheman.jpg ?

18. Moving Wasn't Intended As Recreation User computers verify exchanges Nodes rehash Bitcoin data o Validate o Pass to next node in chain o Longest chain serves as validator Let's look at a transfer

19. Just What You Thought

20. Double Spending Issue with reusing Bitcoins Time stamps in Bitcoin block-chain hashes

21. Who Runs the Nodes? They are run by viewers like you Bitcoin incentive to validate Only nodes whom validated rewarded o Add "Difficulty"

22. Using the System Honest Chain o Valid Nodes trying to authentic transfer Attacker can send invalid data to nodes trying to verify their plan Creates attack chain that must validate quicker than Honest Chain

25. If All Else Fails Attacker could send BTCs then send them back in future with invalid nodes Attacker would plan chain of nodes in advanced If resending of BTCs detected the original receiver generates new keys

26. q=0.1 z=0 P=1.0000000 z=1 P=0.2045873 z=2 P=0.0509779 z=3 P=0.0131722 z=4 P=0.0034552 z=5 P=0.0009137 z=6 P=0.0002428 z=7 P=0.0000647 z=8 P=0.0000173 z=9 P=0.0000046 z=10 P=0.0000012 q=0.3 z=0 P=1.0000000 z=5 P=0.1773523 z=10 P=0.0416605 z=15 P=0.0101008 z=20 P=0.0024804 z=25 P=0.0006132 z=30 P=0.0001522 z=35 P=0.0000379 z=40 P=0.0000095 z=45 P=0.0000024 z=50 P=0.0000006

27. Not Perfect, But CloseClose August 15, 2010 Block 74638 Generated 92233720368.54277038 BTC o UINT_MAX Devalued market for months

28. Where are we at? Bitcoins always growing More people find Bitcoins benefits

29. Even Bad Publicity is Good June 2011 Gawker wrote about the Silk Road o Negatively Brought light to Bitcoins Value of BTCs boomed afterwards

30. A Distant Digital Horizon Future in store o Market won't fill out till 2140 Competing economies Real Government free digital markets

32. Acceptance of my failure to teach Q&A