Digital Currencies  & Blockchain

Lecture 1

History & Evolution of Digital Currencies

Content

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

What is Bitcoin anyway?

Inflation Rate - 2019 3.8
Inflation Rate - 2020 1.8
Current Block Reward 6.25 BTC
Next Halving Date May 2024
Next Block Reward 3.125 BTC
Total BTC Mined 18 600 000
Total BTC Mined (%) 89
Blocks per day ca. 144
BTC Mined per day ca. 900 BTC
Blockchain Size 350 GB
Total nodes ca. 100 000

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 (PIVx)

Delegated Proof of Stake (NXT)

Practical Byzantine Fault Tolerance (Hyperledger)

Delegated Byzantine Fault Tolerance (NEO)

Proof of Importance (NEM)

Directed Acyclic Graph (IOTA, Hashgraph)

 

Non-fungible tokens (NFT)

What is this? And how could it be relevant?

Virtual Worlds on Blockchain

CONVERGENCE

Literature:

Key pre-Bitcoin Work:

Thank you!

stancel@blockchainslovakia.sk
 

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