1. Bitcoin as real currency Bitcoin

2. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Bitcoin? - decentralized, peer to peer.... - no banks or 3 rd parties needed - secure system / everything with encryption - somehow anonymous... --> SO WHAT?

3. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com why bitcoin for saving transaction fees? for purchasing goods? for staying anonymous? speculation? for drugs and money laundering? Well, all nice…But not enough. the difference is: It is YOUR MONEY!

4. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Problem 1: REGULATION

5. Bitcoin for Business – PITA

6. Individual User REGULATION AFFECTS BUSINESSES, NOT PRIVATE USERS! Usually no „license requirements“ Usually no VAT rules apply No money laundry rules apply Even if rules apply, hardly any enforcement No balance sheet / accounting requirements

7. „Private Business“ User

8. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Problem 1: REGULATION PROBLEM SOLVED!

9. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Problem 2: “CONTROL” OF BITCOINS

10. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Status Quo - Intermediary

11. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Status Quo - Intermediary

12. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Status Quo - Intermediary

13. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Status Quo - Intermediary

14. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Status Quo - Intermediary

15. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Problem solved? – Bitcoins - Centralized Service?? - Give up control over my coins?? - Security issues with hackers? - Sites close over night??? --> SAME PROBLEM AS BEFORE!

16. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Centralized services

17. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Centralized services

18. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Centralized services Money goes via a CENTRAL bank account Bitcoins go via central server

19. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Centralized services

20. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com What if a service exists where you…. Get Bitcoins - DO NOT give up control over your coins - DO NOT allow even the administrators to access your coins - IS NOT possible that Hackers can steal coins, even when the server is compromised -DO NOT need to trust the trading party, as still an escrow is in place? EVEN when the site is closed?

21. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Decentralized services

22. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Decentralized services

23. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Decentralized services

24. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Trick: Multi-Signature wallets

25. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com “Normal” Transaction How does it work?

26. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Part 1: Create multi-signature address Multi-Signature -Get two or more Bitcoin addressees. -Combine them using addmultisigaddress JSON-RPC command -As a result, you will get a special Bitcoin address starting with „3”. -The resulting Bitcoin address is fully functional and can receive coins. -You can create different combinations of M-of-N addresses. It means that you can specify how many private keys are needed to spend the coins.

27. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Part 2: Spending coins from multi-signature wallets Multi-Signature -Create a transaction draft using createrawtransaction JSON-RPC command -Sign the resulting transaction data with one of private keys, utilizing signrawtransaction command -provide it with correct details, which may include: public key and redeem script -Pass partially signed transaction data to other party, which repeats this process -Finally, you broadcast the transaction to the network (using sendrawtransaction or another means)

28. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Multi signature wallets

29. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Multi signature wallets

30. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Hackers and admins see encrypted wallets

31. Two-Factor authentication

32. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com And the last resort: Dead Man’s Switch

33. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com PROBLEM SOLVED! Problem 2: “CONTROL” OF BITCOINS

34. www.bitalo.com Phone: +49 6322 9419292 | e-mail: martin@bitalo.com Bottom line - It IS possible to create REAL NO TRUST Bitcoin services - Multi-Signature wallets, no one can ever access the bitcoins without your consent - Thanks to MePIN two factor authentication not even if your PC is compromised -With timed backup-transaction coins are even safe when service is closed down or server data is deleted

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