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Overview
• BTC
• Bitcoin as a Currency
• The Components of the System
• Some of the Processes – Mining / Consensus
• The Software Protocol
• The History
• A Transaction Lifecycle
• Wallets

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BTC / Bitcoin
• The 1st Blockchain and Crypto Currency
• Created / Appeared in 2009

• The Father of Crypto

• All other cryptocurrencies are considered as Alt-Coins

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Satoshi Nakamoto
• Wiki Link

• PsudoName – Not Real Name

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Satoshi Nakamoto
• Alternative Theories Suggest :

• Some do Know , but the majority do not and may never know.
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In the Beginning
• The First Transaction Took Place in 2009.
• Jan 3, 2009 6:15 PMUTC
• The value of BTC was : $0 and the amount was 50btc
• If that transaction took place in Nov 2021 at the height of BTC value,
the transaction would be worth 50 X 65,000$
• The Genesis Block

• Entire Price History

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What Else Happened at the start ?
• P2PFoundation
• The Post
• The whitepaper
• More on WPs and ICOs Later

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 The Humour &
Who Could Have
Known ?
• Bitcoin Pizza Day – May 22nd
• In May, 2010 Laszlo Hanyecz set out to buy two large pizzas with
bitcoin.
• The Post
• How Much was it worth Then and how Much is it worth now? Use BC

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Technical Infrastructure
• Peer to Peer (P2P)
• Decentralised
• Immutable
• Distributed, shared ledger of events

• What Applications do you think this tech

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 A Ledger
• There exists some Issues with ledgers
• Susceptible to fraud
• Susceptible to human error
• Rely on intermediary to prevent double spend e.g. bank, paypal
• Full control out of the hands of the consumer
• In some cases the power of these
intermediaries can result in over-extensions of power:
• Paypal block payments to Wikileaks etc

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Cryptographic Beginnings
• BTC is a paradigm
• A collection of Technologies combined to provide a new tec / service
• Distributed Computing
• Peer to Peer
• Digital Signatures
• Consensus
• Hashing Algorithms

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Digital Signature
Non Repudiation

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 Hashing Demo / BTC Functions
Demo
• SHA-256
• “The SHA (Secure Hash Algorithm) is one
of a number of cryptographic hash
functions. A cryptographic hash is like a
signature for a text or a data file. SHA-256
algorithm generates an almost-unique,
fixed size 256-bit (32-byte) hash. Hash is a
one way function – it cannot be decrypted
back. This makes it suitable for password
validation, challenge hash authentication,
anti-tamper, digital signatures.”
[Link] - Fantastic Resource For Beginners to understand some of the workings
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Hashing / SHA
• Hashing , given from cryptography is an irreplaceable feature within
the BTC Network.
• It is used throughout
• Verifying Transactions
• Ensuring No Modifications / Immutability
• Used to Perform Computational work
• Those workings are then used for POW , proof of work
• Demo of SHA-256 – SHA Calculator

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Consensus “To Achieve a
Consensus”
• BTC uses a POW consensus Mechanism
• Proof of Work
• There are several Variations of Consensus mechanisms across
differing Blockchains.
• Ethereum recently converted to a POS , proof of stake.
• We will investigate some other Consensus Mechanisms as we
progress.
• BTC First with POW

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 Hashcash was proposed in 1997 by Adam Back and described
more formally in Back's 2002 paper "Hashcash - A Denial of
Proof Of Work Service Counter-Measure".

• Proof of Work:
• Based on Adam Back’s Hashcash (2002) the PoW involves scanning for a value that when
hashed, the hash begins with a number of zero bits.
• Miners (which we will discuss in more detail later) confirm proof of work by incrementing
a nonce in the block until a value is found that gives the required zero bits to solve the
block’s hash.
• This PoW also solves the problem of determining representation in majority decision
making.
• Proof-of-Work is essentially ‘one-CPU-one-Vote’. The majority decision is represented by
the longest chain, which has the greatest PoW efforts invested in it.
• To modify a past block, an attacker would have to redo the PoW of the block and all blocks
after it and then catch up with and surpass the work of the honest nodes.
The likelihood
•HashCash PDF of this diminishes exponentially as subsequent blocks are added.
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The Miners

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The Miners

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 • Miners validate new transactions
Mining and record them on the blockchain,
the global, distributed and shared
ledger. Blocks are mined every 10
minutes, with a block containing all
transactions since the last block was
• This is the process by which new mined. Once the block is added to
Bitcoin is added to the money supply. the blockchain the transactions are
It also serves to protect the network confirmed
against fraudulent transactions and • Miners receive rewards for mining
double-spend and is based upon the blocks; new coins for creating a new
key concepts discussed to this point. block and transaction fees for the
• Essentially, miners provide transactions within the block.
processing power to the network in • The party who successfully mines
exchange for the opportunity to earn the block is the party who first
bitcoin as reward. solves the Proof-of-Work algorithm
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Difficulty & Rewards
• The Current Difficulty Level in • The Current Reward :
BTC : • The current bitcoin block reward
• [Link] is composed of 6.25 newly
ng/bitcoin/difficulty-chart generated coins per block.

• https://
• 17 Leading Zeros [Link]/
• [Link] halving/
ty

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