1. PRESENTS
“Bitcoin, the future of payment?”
By Wessel Kooyman, CEO, Cole Street

3. Currency (n.):
Representative currency: deriving its worth from a
link to some physical store of value like gold, silver
or gemstones.
Fiat currency: Derives its value from the fact that a
government or central authority guaranteed it.

4. How to build a digital currency?
Requirements:
- Decentralized (Peer to peer)
- As anonymous as possible
- Fraud proof: No double spending, no theft
- Gradual availability of more currency, effort required

5. What is a hashing algorithm?
Hashing d7a8fbb307d7809469ca9abcb0082e4f8d5651e46d3cdb762d02d0bf37c9e592
File length: 12,322 bytes

6. What is a ledger?

7. How to build a digital currency?
The block chain: the innovative part of Bitcoin
The
genesis
block Dead
branch

8. Bitcoin – How the blocks in the blockchain are created
 All transactions are logged in the blockchain (ledger)
 All nodes (miners, clients in P2) have the full blockchain
 New blocks are mined by the miners, who get a reward (first transaction)
 New blocks are verified by all and refused if not valid
 If you are miner, you must also process transactions – most earn a small
fee

9. Bitcoin – The network
 Miners create blocks and process transactions
 All the miners are connected to each other peer-to-peer
 A Bitcoin client connects to the peer-to-peer network
 Transactions are written into the blockchain
 Confirmations are sent to the client

10. Bitcoin – Ways to do transactions
 Currency exchanges like Mt Gox (EUR to BTC, BTC to EUR)
 Local exchange (with other individuals)
 Using your mobile phone
 Unlimited – after all, you only need to exchange some data to do a
transaction

11. Bitcoin - Mining
 How it works
 Falling reward level
 Technology rat race: cpu, gpu, asic
 Profitability depends on BTC exchange rate, cost of electricity, cost of
hardware investment

12. Bitcoin (n.):
 Not a representative currency, because it is not
linked to anything physical.
 Not a fiat currency, as its supply is actually
finite and it lacks any central backing authority.

13. Bitcoin (n.):
 Something new, only possible because of the Internet
and high-speed processing power of modern
hardware
 Unforgeable, verifiable, secure, (almost) no
transaction fees, quasi-anonymous
 Distributed, borderless
 No trusted third party needed for transactions (bank)

14. Part two: Bitcoin and society
- Impact on government
- Context from privacy perspective
- Impact from real life events in Bitcoin (Cyprus,
Argentine)

15. Government and privacy – a tug of war
- Tor, WikiLeaks, Snowden
- Cyprus, Argentine

16. Bitcoin - History
 Created by “Satoshi Nakamoto”, an alias for the creator(s). Must be
mathematician(s) and programmer(s). Released a paper describing the
entire protocol in 2008.
 2009-2010: First implementations of the miners. First transactions
achieved.
 2011-2012: Wikileaks, EFF, Silk Road, 1000+ merchants accept BTC.
 2013: Accidental fork of the blockchain, government starts regulating,
Coinbase and MtGox run out of trading capacity, exchange rate spikes to
$266

18. Part three: Bitcoin and money
Making money with Bitcoin – how are people
doing it today?
Mining, rate speculation, currency exchanges,
casino’s, crime, payment processing, securities
exchanges.

19. Bitcoin – Has its own securities exchanges
 MPEx, BitFunder, btct are Bitcoin denominated stock exchanges
 Recent acquisition of a casino for 126315 BTC ($12.4 million
USD)
 Companies on the exchange are mining companies, exchanges,
casino’s, etc. All Bitcoin related ventures.
 The securities are priced, naturally in Bitcoin.

20. The first exit in Bitcoin
SatoshiDice acquired for 126,315 BTC (€8.69 million) on
July 18th.
Was trading publicly on MPEx, a Romanian Bitcoin
securities exchange.

21. Bitcoin – Startup investors are here and ready
 Angel network BitAngels put together $7m from 120 angels
 Boost VC in San Mateo has a incubator program for Bitcoin
startups
 VC’s: Liberty City Ventures has $15m Bitcoin fund, Union Square
Ventures, Andreessen Horowitz have invested in Bitcoin startups.
 French VC’s : on the beach

22. Bitcoin – follow up currencies are “altcoins”
 Primecoin: the mining work results in discovery of new prime
numbers
 PPCoin: Includes “Proof of stake”
 Freicoin: Includes exploration of demurrage

23. Bitcoin – Future plans
 Easier payment, more secure
 Hardware wallets
 Faster transactions
 Wider main stream adoption