we all know why you're here...

this may contain some simplifications

but when did it begin?

• Oct. 2008: Satoshi Nakamoto posts a paper about "a peer-to-peer" electronic cash system
• 9 Jan. 2009: Bitcoin v0.1 released on Sourceforge

circa 10 Jan. 2009: nerds start getting excited

"a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator. [...] The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain."

Source: https://en.wikipedia.org/wiki/Bitcoin

Cryptocurrency

A currency "using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets."

Source: https://en.wikipedia.org/wiki/Cryptocurrency

but i thought cryptography was like...

enter asymmetric cryptography

decentralized

AKA P2P, disintermediated, or whatever.

"Bro, I need some $$$ to buy stuff"

"Guys, i need some $$$ to buy stuff"

"Sure bro. Everyone, I'm sending 10$ to my pal here"

blockchain time!

• Deterministic (same input == same output)
• Fairly easy, but not too much, to execute
• Hard to reverse
• Given an output and an input, easy to see if they match

"dfca123498afedb3267"

"Yeah, right"

"Yeah, right"

"+ some BTC for the effort"

rewarding bitcoin miners

• transaction fees
• mining fees

• Stored on the distributed ledger (i.e. everywhere on the network)
• Visible by every participant in the blockchain
• Guaranteed to be executed in their entirety

trading

caveats

• The infamous Mt. Gox story
• It's not in any way safer than any other foreign currency trading
• YMMV

icos

Source: https://qz.com/1055126/photos-china-has-one-of-worlds-largest-bitcoin-mines/

what then?