Full Disclosure

I am not a Fiduciary
Please do not use this as financial advice
Don't take financial advice from anyone who bought an airplane
I own BlackBerry stock

DeFi topics

Money
Blockchain
Cryptocurrencies
Distributed Finance (DeFi)
Smart Contracts
Solidity
Distributed Applications (Dapp)
Non-fungible Tokens

What is Money

Social Contract for exchanging goods and services
Replaced the Barter System
Medium of Exchange
Measure of Value
Paper money replaced coins as Legal Tender
Most Paper money is now a Fiat currency

Crypto Currencies

Crypto for short
Digital money based on blockchain technology and is decentralized and encrypted
Can be used for purchasing products and services
Also just used as an investment

Paul Krugman

Bolivarian Republic of Venezuela

Inflation rate of 2665% this year

Was 350000% in 2019,

slowed to 2900%

in 2020

Was the richest nation in South America 20 years ago

Largest oil reserves in the world

20% of all US Dollars in circulation were minted in the last year

Legality

Russia initially skeptical, now embracing Crypto
Most mining in China
India has outlawed Bitcoin
Venezuela came up with their own (Petro)
Janet Yellen Treasury Secretary has concerns
Gary Gensler incoming SEC Chairman very pro Crypto currency
Gary Gensler taught a course at MIT on Cryptocurrency and Blockchain

What is Blockchain

Digital ledger
Chain of blocks of data
First made popular with Bitcoin
Can be used for all kinds of apps besides Cryptocurrencies

Blockchain principles

Combine data for a hash
Bitcoin uses Sha256 as its hash
Data can contain transactions for its data
Nonce is used to with the data to compute a hash with leading zeros
Blocks are added to one another with the previous hash as part of the data to create blocks

Demo

Cryptocurrencies

Bitcoin launched in 2009
Litecoin introduced 2011
Dogecoin introduced 2013
Ethereum launched in 2015
Bitcoin and Ethereum the largest
Cardano (ADA)
100s of new 'Coins' launched in ICOs since
Many have disappeared as well

Bitcoin

Invented by Satoshi Nakamoto?
No one is sure if he actually exists
Started at $0.30, now worth > $50,000
Finite number of coins, no inflation
Miners earn coins through 'Proof of Work'
Bitcoin is based on a linear blockchain
Transactions take over 10 minutes

Lite and Dogecoin

Meant to be more accessible
Also finite number of coins
Both use more efficient hash
Dogecoin started as a joke

Ethereum

Started in 2015 by Vitalik Buterin
Started as journalist for Bitcoin Weekly
Uses a Merkle tree instead of a linear blockchain
Also uses Smart Contracts
Introduced the Solidity programming language
Ethereum setup as a Non-profit
Ethereum network used not just for financial transactions, but for distributed applications

Environmental Impact

Bitcoin mining uses the amount of electricity produced by the entire nation of Argentina
Miners usually mine where electricity is cheap
Below $0.05 kWh
JEA costs $0.12334 kWh

PoW vs PoS

Proof of Work used for most Blockchains
Proof of Stake much more energy efficient
Proof of Stake Mining is done by stakeholders
Stakeholders are randomly picked to mine blocks
Ethereum is moving from PoW to PoS in layer 2
It will take a while for Ethereum to transition to PoS

Cardano

Cardano (ADA)
Uses Proof of Stake
Claims to be the most Eco-friendly Crypto
Create Smart Contracts with Plutus platform
Programmed in Haskell

Algorand

Founded by MIT professor Silvio Micali
Proof of Stake
Permissionless Blockchain
Uses Verifiable Random Function
Smart Contracts written in version Python

Distributed Finance

Banks and others institutions are using or investigating Blockchain technology
Allow for financial transaction without the need of banks or fiat currencies
First big use of Bitcoin was Silkroad
Some currencies offer savings rates as high as 9%
Money can be earned through proof of stake and mining
Largest mining farms in China and Russia

Smart Contracts

Ethereum first to introduce
Can create contracts with logic
Solidity is a Touring complete language for creating smart contracts
Contracts can be used to guarantee that a financial transaction is only used for a certain type
They can also be used for distributed applications
Processing a transaction on Ethereum or other networks requires 'fuel'
Fuel costs on Ethereum's network can be over $10 dollars

Solidity

Language for programming the Ethereum Network
Use it to create Smart Contracts
Touring Complete language
Based on JavaScript and C++
Supports types and inheritance

 pragma solidity >= 0.7.0 <0.8.0;
 
contract Coin {
    // The keyword "public" makes variables accessible from other contracts
    address public minter;
    mapping (address => uint) public balances;
 
    // Events allow clients to react to specific
    event Sent (address from, address to, uint amount);
 
    // Constructor code is only run when the contract
    // is created
    constructor() public {
        minter = msg.sender;
    }
 
    // Sends an amount of newly created coins to an address
    // Can only be called by the contract creator
    function mint(address receiver, uint amount) public {
        require(msg.sender == minter);
        require(amount < 1e60);
        balances[receiver] += amount;
    }
 
    // Sends an amount of existing coins
    // from any caller to an address
    function send(address receiver, uint amount) public {
        require(amount <= balances[msg.sender], "Insufficient balance.");
        balances[msg.sender] -= amount;
        balances[receiver] += amount;
        emit Sent (msg.sender, receiver, amount);
    }
}

Solidity Tools

Visual Studio Code extension
Node.js based compiler
Web3 JS Library
Truffle for testing
Ganache personal blockchain
Drizzle React based Redux store
Remix is an online Solidity playground

Demo

Dapps

Decentralized applications
Ethereum Network is used for financial and many other types of applications
Games and Social networks can run as Dapps
Use fuel or 'Gwei' to pay for transactions
Interplanetary Filesystem or (IPFS) is a Dapp
Websites can be hosted on IPFS using ipfs://

Binance

Binance is a Crypto exchange and network
Node.js APIs for monitoring and buying Crypto
They have there own network for processing Smart Contracts
Based on Ethereum's network
It is a centralized network

Demo

Kings of Leon

Non-Fungible Tokens

Non-Fungible Tokens (NFTs)
Also based on Blockchain
Being used for 'Digital Art'
Kings of Leon first band to release album as NFT
OpenSea.io market place for Digital Art
ERC721 specification for Ethereum
Mintbase, Cargo or Rarible can be used for creation

Questions?

Links

slides.com/davidfekke/defi
github.com/Jaxnode-UG/blockchain-demo
github.com/Jaxnode-UG/public-private-key-demo
github.com/Jaxnode-UG/truffle-event-tests
remix.ethereum.org

	pragma solidity >= 0.7.0 <0.8.0;

	contract Coin {
	// The keyword "public" makes variables accessible from other contracts
	address public minter;
	mapping (address => uint) public balances;

	// Events allow clients to react to specific
	event Sent (address from, address to, uint amount);

	// Constructor code is only run when the contract
	// is created
	constructor() public {
	minter = msg.sender;
	}

	// Sends an amount of newly created coins to an address
	// Can only be called by the contract creator
	function mint(address receiver, uint amount) public {
	require(msg.sender == minter);
	require(amount < 1e60);
	balances[receiver] += amount;
	}

	// Sends an amount of existing coins
	// from any caller to an address
	function send(address receiver, uint amount) public {
	require(amount <= balances[msg.sender], "Insufficient balance.");
	balances[msg.sender] -= amount;
	balances[receiver] += amount;
	emit Sent (msg.sender, receiver, amount);
	}
	}

DeFi Blockchain