David Stancel
Cryptocurrency Expert, Advisor, Lecturer, Author, & exCTO @ Fumbi
BITCOIN
THE WORLD CHANGING CURRENCY
THE WORLD CHANGING CURRENCY
Why do we need it?
Lambos
My Journey
- Intro Dec '12
- Enlightenment '16
- All in
Disclaimer
- Opinions
- Careful of experts
- Not financial advice
- DYOR
- Invest wisely
What is Bitcoin?
Confirmation Bias and Bitcoin
... has drawn from a variety of schools of thought: game theory, cryptography, hacker culture, the open source movement and libertarian ideology..
Bitcoin
Speculative Price
- Wild price fluctuations
- Media feedback loop
- Short term focus
- Great for:
- Making money
- News headlines
- Memes
- Obituaries
Utility and Tech
- Same irrespective of price
- Long term focus
- Great for:
- Disrupting old structures of power
- Creating global economies
- Decentralising trust
- ...
"In order to understand bitcoin, you need to understand money and, in order to understand money, you need to understand the history of money"
- Wences Casares
Money by Design
- Attributes:
- Scarce
- Durable
- Divisible
- Verifiable
- Portable
- Fungible
- Recognisable
- Functions:
- Medium of Exchange
- Unit of Account
- Store of Value
History of Money
- Barter backed Credit:
- System using rare items e.g stones, shells, cacao beans
- Commodity money:
- Barley, Tea, Pelts
- ~5000 years ago rare metals become standard recognisable commodity
- ~2700 years ago first minted coinage
History of Money
- Redeemable Money:
- 7th Century China: Paper money redeemable for commodities
- 17-19th Century Europe uses Gold Standard
- Post WW2 Bretton Woods System
- Fiat Money:
- 1971 Nixon Shocks
- Credit Last ~40 years move toward electronic money in form of digital credit systems with central authorities
"Fiat money is a currency without intrinsic value established as money, often by government regulation. It has an assigned value only because the government uses its power to enforce the value of a fiat currency or because the exchanging parties agree to its value"
History of Money
-
Cryptocurrencies:
-
October 2008: "Bitcoin: A Peer-to-Peer Electronic Cash System" - Whitepaper
-
Jan 2009: First version of bitcoin goes live
-
General Design
- Scarce: Limited 21 million supply
- Divisible: 1BTC = 100 000 000 Satoshi
-
Frictionless: Multi-medium transportability with almost real time settlement
- Internet
- Paper
- SMS
- Verifiable: Cryptographically secured
- Durable: Global, Decentralised and Open Source
- Recognisable: That is why you're here
Disputed Attribute of Money: Stability of Price
- Market discovery phase
- Purchase power
- Gold (up)
- Bitcoin (up)
- Fiat (down)
- Inflation & Hyperinflation
- Perhaps we are using the wrong measuring stick?
"In 1914, the exchange rate of the German mark to the American dollar was about 4.2 to one. Nine years later, it was 4.2 trillion to one"
Why is Bitcoin Revolutionary?
The internet gave us a decentralised global network that allowed the sharing information
Bitcoin gives us a decentralised global network that allows censorship resistant transfer of value
Bitcoin brings into question the existing power structures.
"Just as the Enlightenment brought about the separation of State and Religion,
So does this technology provide of the possibility separation between state and money"
- Reclaiming monetary control
- Keeping Governments in Check
- Banking the unbanked
- Remittance
- Hedge against hyperinflation
- Protect Wealth
- Global Economies
Why Separate the State from Money?
Join the revolution
Twitter: @a21n_
Bitcoin Resources: lopp.net/bitcoin.html
Sources
Deeper Dive
Proof of Work
- PoW Waste = Security of Network
- Synonymous to current systems:
- Vaults, Security Guards, Electric Fencing
- Datacenters, Disaster Recovery Centers
- Counterfeit Preventions
- ...entire Banking infrastructure
Ecological Impact
- Move towards stable green energy
- Huge investments in sustainable computing
- Energy usage not linear to adoption/transactions
- Auto adjusting difficulty
- First a year ran on < 5 computers
- Innovations and protocol changes (PoS, DPoS)
Challenges
- Scaling
- Adoption
- (de)centralisation
- Regulation
- End user security
- User experience
The Future
- Lightning (Instant, Low Fee Payments)
- Rootstock (Smart Contract)
- Tumblebit (Anonymous Payments)
Bitcoin and Money
By David Stancel
