And not the payment layer as has been the case with fintech for a generation
P2p = “peer to peer” - mention that this is the opposite of client <-> server model,
example: music sharing
Trust. Who is the “anyone” we trust today? Banks, government, policy makers.
Another way to think of Bitcoin: as better version of physical cash, for the Internet age
(with added benefits, eg. no inflation)
Will come back to dive into each of these properties in more detail later.
RE: eliminates the *NEED* to trust - still have opportunity to choose who to trust (e.g.
when incentives align, trust reputable, verifiable actors, etc) it’s the removal of
mandatory required trust that is powerful.
Satoshi identity doesn't matter, because with a completely open source system, there's
nothing about how it works that isn't completely public.
● If you’re unfamiliar with what a ledger is, just think of this as a simple
spreadsheet tracking ownership of coins.
● 2^256 > atoms in universe
● Similar to a $20, if it blows away in the wind, you lose the money. If your priv key
is written on a piece of paper that blows away...so there are different custody
options
Again, not a client/server architecture…compare to Venmo, Cash app, etc.
why this process doesn't require trust—due to the difference between open source
software vs. the closed source software most people are used to. closed source apps or
programs on your computer or phone might do nefarious things only it's creators are
aware of, not true for open source.
1. should speak to permissionless entry. anyone can come/go at any point in time, and
should not be disadvantaged in any way based on any factor (time entered, amount of
hash rate, etc.).
2. randomness is a really hard concept and difficult to produce uniform randomness. it
is critical for #1. PoW is a system to create that randomness and create a FAIR
SYSTEM.
3. because this is the only method to print money, it is EXTREMELY IMPORTANT to be
fair, neutral, and permissionless.
Ask audience, who has heard of bitcoin mining?
Critical voiceover:
● A block is valid if all bitcoin protocol rules which include
○ Preventing double spending, by ordering transactions in time [explicitly
refer to this addressing question #2]
○ Preventing the creation of counterfeit bitcoin [explicitly refer to this
addressing question #4]
○ The new block must link back to previous blocks ensuring the same
history of transactions is used [explicitly refer to this addressing
question #3]
● This is what makes it expensive
● And makes it hard to undo past work
● And creates game theory to accept others’ work
● Difficulty
● Supply schedule maintained regardless of # miners
● Why do miners spend money to produce new blocks?
○ Each new block mints new bitcoin which the miner receives as
compensation.
○ Also, each transaction attaches a fee that goes to the miner as a reward.
● fingerprint; wildly diff output hash; google doc add period ex.
120 quintillion = 120 million trillion hashes per second
By far the biggest “supercomputer” in existence
● Game theory then suggests that each miner accepts the block and begins
attempting to produce the next valid block with a new set of transactions
○ The odds of finding a new block doesn’t change for a miner, so it isn’t
like they’re “starting over from the beginning” … in fact each hash they
do is starting over from the beginning
○ If a miner were to ignore a new valid block, and continue attempting to
build off of the block they had been, this would create a fork, but the rest
of the network would reject their new block once broadcast because it
would represent a “shorter chain”
● Similarly, each node in the network verifies the new block is valid and accepts it
[explicitly refer to this addressing question #1]
○ To emphasize the importance bitcoin puts on allowing anyone to
participate, it is possible to run a bitcoin node on a $100 Android phone
and audit the entire history of 600k blocks and 500m transactions.
RECAP
Highlight: block reward, increasing immutability of the ledger
single version of ledger ... because each node accepts the longest chain of valid blocks
as the valid version of history
double spending and counterfeit ... to do so would be creation of an invalid block, which
miners would reject because they don't want to mine (and spend money) building off of a
block they anticipate the rest of the network rejecting. similarly, non-mining nodes would
reject as (a) it isn't in their self-interest (only the double spenders) (b) game theory
suggests majority will reject
modifying history ... to go back and modify a transaction from, say, last week, would
necessitate re-mining 1000+ blocks, which would cost a LOT of money, and, you'd be
racing against the rest of the network which would continue to build onto the "valid"
chain
Important hisory: all attempts at ecash prior to bitcoin were shut down, example:
https://en.wikipedia.org/wiki/Liberty_dollar_(private_currency)
RE: Bitcoin Cash - mere fact that bitcoin.com can be captured by a scam, is testament to
the unprecendented freedom of Bitcoin.
RE: Scams in general - lots of greed and misinformation out there. Education and
vigilance is important!
you don't have to apply for an account, fax in forms to some institution, etc. you just need
to pick a number!
Speak to big areas that still need a lot of improvement: UX. Scaling. Security. Privacy.
Volatility. Tax regulation.