Introduction to  Digital Currencies

Content

• Introduction to the Topic
   
• The emergence of Digital Currencies
   
•  Main Principles and Definitions

My Intro

• MSc. in Digital Currency & Uni of Nicosia
   
• CTO & Fumbi, Advisor & Vacuumlabs
   
• Co-Founder @Blockchain Slovakia, Paralelna Polis
   
• Author @Coinstory
   
• Advisor to multiple crypto projects
   
• stanceldavid.sk

Chapter2:
 https://coinstory.tech/book/chapter-02-the-hunt-for-e-money/

Cypherpunks, Cryptoanarchy & Civil Rights in Cyberspace:
https://coinstory.tech/book/chapter-03-cryptoanarchy-cypherpunks-and-civil-rights-in-cyberspace/

What is Bitcoin anyway?

Key Stats

Bitcoin Hashrate 

Blockchain

• Looking for open, unstoppable, peer-to-peer payments, for reasons mentioned earlier.
   
• We need to agree about all transactions in the system –-> to reach a consensus about the state of the ledger.
   
• We need to get an agreement securely, expecting some participants to come and leave at any time, and expecting some will try to cheat. This can be achieved in basic form through proof-of-work, which is chaining blocks of transactions.
   
• Since proof-of-work is hard, it must be incentivized.
   
• Hence, Bitcoin and the concept of cryptocurrency is born.

So, why blockchain?

 A tamper-proof, shared digital append-only ledger that records transactions grouped into blocks in a decentralized peer-to-peer network.

The permanent recording of transactions in the Blockchain stores permanently the history of asset exchanges that take place between the peers.

Updating the ledger (usually) requires solving Byzantine Agreements (hash) with economically incentivized participation, secured by cryptography

What is Blockchain?

1. New TX is broadcasted
 

2. Each Node collects TXs
 

3. Randomly selected node gains the right to canonize "the truth" in the block
 

4. Other nodes accept/reject the block based on its validity
 

5. Acceptance is expressed by including block's hash into the following blocks

Blockchain - synchronization

Consenus Mechanisms

Proof of Work (Bitcoin)

Proof of Stake (Cardano, Polkadot..)

Delegated Proof of Stake (NXT)

Practical Byzantine Fault Tolerance (Hyperledger)

Delegated Byzantine Fault Tolerance (NEO)

Proof of Importance (NEM)

Directed Acyclic Graph (IOTA, Hashgraph)

Blockchain Simulation:

1. https://anders.com/blockchain/public-private-keys/keys.html

2. https://anders.com/blockchain/hash.html

3. https://blockchaindemo.io/

Non-fungible tokens (NFT)

Virtual Worlds on Blockchain

CONVERGENCE

Literature:

• A.Back - Hashcash
• N. Szabo - Bitgold
• W. Dai - B-money
• S. Nakamoto - Bitcoin Whitepaper
• H. Finney - RPOW
• Lamport, Shostak, Peace - The Byzantine General Problem

Key pre-Bitcoin Work:

• Diffie, Hellman - New Directions in Cryptogprahy
• D. Chaum - Blind Signatures for Untraceable Payment
• Haber, Stornetta - How to Timestamp a Digital Document
• D. Chaum - Dinning Cryptographers Problem

Thank you!

david@fumbi.network
 

(Extended) Syllabus:
https://github.com/Spider333/Cryptocourse