"The eye has never seen, nor the hand touched a dollar"
Alfred Mitchell Ines
Medium Of Exchange
Store Of Value
Unit Of Account
A Really Long Time Ago -The Barter System
9000 BC - Livestock
3000 BC - Grains (The Shekel)
1200 BC - Sea shells (Cowry)
1000 to 600 BC - Crude Metal Coins
700 BC - Precious Metal Coins
118 BC - Leather Money
806 - Paper Money
1816 - Gold
1913 - Gold Backed US Dollar
1950 - Credit Cards
1971- The Unpegged US Dollar
2009 - Bitcoin
For any currency to be viable, it must win the trust of the community using it.
Double spending is the process of successfully spending the some money (or thing) more than once.
A State Transition System
- State consisting of the ownership status of all bitcoins (UTXOs).
- State transition function that takes a state and a transaction and outputs a new state which is the result.
- A Transaction with one or more inputs and one or more outputs.
The process of creating consensus in the distributed ledger network, and creating the blockchain.
A proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements.
Namecoin - Decentralised Name Registration Database
Coloured Coin - Issue your own digital currency
Metacoin - Cryptocurrency protocol with advanced features
Weak Scripting Capability
Concentration Of Mining Power
“What bitcoin does for payments, Ethereum does for anything that can be programmed”
Ethereum is a blockchain :-
- With a built in fully fledged Turing complete programming language
- That can be used to create 'contracts' that can encode arbitrary state functions
- Which allows users to create decentralised applications simply by writing
a few lines of code
> if money received == $2.50 > && the button pressed is "Diet Coke" > then release Diet__Coke
What if the machine says, "If you put in $1000, this machine will give you $5000!"
Smart Contracts are just code which have the trust backing of a blockchain.
Ethereum consists of :-
- The Ethereum Virtual Machine
- A Turing Complete programming language called Solidity
- A P2P Network Protocol
- Massive parallelisation causes Ethereum to be much slower and more expensive than a traditional computer.
- Decentralised consensus gives Ethereum extreme levels of fault tolerance, ensures zero downtime, and makes data stored on the blockchain forever unchangable (immutability).
Ethereum's basic unit is the account.
- Externally Owned Account - controlled by private keys
- Contract Accounts - controlled by the contract code
This is the native token of Ethereum and serves two key purposes.
- By requiring applications to pay Ether for every operation they perform, broken or malicious programs are kept from running out of control.
- Given as a reward to miners for keeping the consensus in the system.
This is Ethereum's end user interface to bring blockchain technologies to non-technical users. It works similar to app stores and browsers
- Token Systems
- Financial derivates and stable value currencies
- Identity & Reputation Systems
- Decentralised File Storage
- Decentralised Autonomous Organisations (DAOs)
And many many more...
Augur is a decentralised prediction market which allows users to bet on the outcome of different events and can also be used for hedging purposes.