Why Cryptocurrency will chang everything. Session at Stanford CEO session by Tom Ding, founder @Koinify

1. Why Bitcoin will
change everything Tom Ding, Founder @Koinify

2. Me
Religion: Cryptocurrency
Founder @Koinify
Sr. Manager @eBay U.S. and China
Marketing @ Alibaba, @Trilogy

3. https://www.youtube.com/wat
ch?v=Vd19SboRhVY

4. Part I - Bitcoin is Dollar 2.0
Bitcoin is a Digital Cash, without central authority for
issuance nor exchange

5. Blockchain Explained
Transaction amount
Input & Output address
A unique private key controls the fund
Block 101
Block 102
Block 103
Block
chain

6. Public key, Private Key &
Address
2^160 address space for Bitcoin
Private Key
Public Key
(SHA256)
(RIPEMD160)
Bitcoin address (160 bit)
Shark attack: 2^24
PowerBall: 2^28

7. Banking system: Centralized
Ledger
Bank of America
Private Server
Hai $500
$600Yu

8. Decentralized Ledger
Hai $500
$600Yu
Hai $500
$600Yu
Hai $500
$600Yu
Computer NComputer 2Computer 1
…..
Synchronize Synchronize

9. Double spending problem
Hai $500
$1000Amazon
Hai $500
$600Yu
Hai $500
$600Yu
Computer N
Computer 2Computer 1
…..

10. Solution: Proof of Work
Hai $500
$600Yu
Hai $500
$600Yu
Hai $500
$600Yu
Computer 1
…..
Computer 2 Computer N
…
Hashing
…
…
Hashing
…
…
Hashing
…
Found correct solve
Broadcast
Adopt new chain
1
2
Adopt longest chain Adopt longest chain

11. Quiz
❖ Explain what is a bitcoin wallet?
❖ Guess how large is the total bitcoin blockchain since
genesis block in 2009?

12. But where does Money and
Bitcoins come from?

13. Money = Debt = Economy
Lubrication
❖ Barter
❖ Commodity money
❖ Precious metal / Gold
❖ Fiat money (11AD)
❖ 1944 - 1971: Bretton Woods
agreement
❖ 1971: Nixon shock
❖ Bitcoin (2009)
Transaction cost
Standardization
Divisible

14. Bernanke: Let there be
money
Treasury Bonds
USD
1
2
+1,000,000 T-Bills
- 1,000,000 USD
Lend
3
+1,000,000 USD
+1,000,000
USD

15. Sad story of Zimbabwe
• First Dollar: ZWD (1980)
1.47 USD: 1 ZWD
…….
• Third Dollar
1 ZWR = 10 billion ZWN
• Fourth dollar: We’re really screwed!
A 100-trillion-dollar bill, it turns out, is
worth about $5.

16. Worldwide inflation

17. Satoshi: Let there be coins
Transaction 1
Transaction 1
Transaction N
25 reward
Block 100
Transaction 1
Transaction 1
Transaction N
Block 101
25 reward
+25 Bitcoins!
+25 Bitcoins!
Max 21,000,000
…
Bitcoin Miner/Processor
Bitcoin Miner/Processor

18. Recap
- Money = debt
- Dollar is a product (produced
by government)
- Cryptocurrency is Dollar 2.0:
Solving for Principal-Agent risk
Bitcoin / Cryptocurrency
 Predefined supply
algorithm
 Vote by money
Central Bank
- Create money
- Set interest rate & reserve
requirement
- NO opt-out
VS

19. Quiz
❖ Assuming transaction fee is zero, Is Bitcoin transaction
free? Why?

20. Part II - Permission less
innovation & Social contract

21. Innovation accelerates with
decentralization

22. How can cryptocurrency help?
❖ 5th protocol: Value exchange layer (e.g. Uber)
❖ Decentralized financial innovations - e.g. pool insurance
❖ MaidSafe: Decentralizing Internet

23. Story in Uganda
❖ https://www.youtube.com/watch?v=BrRXP1tp6Kw

24. - Thomas Hobbes <Social Contract>
“… that a man be willing, when others are
so too, … , to lay down this right to all
things; and be contented with so much
liberty against other men as he would
allow other men against himself.”Constitution
Laws
Sovereign
Corp
Business Contracts
Non-profit LLP

25. Cryptocurrency enabling new org
structure
❖ Why: Principal-Agent-Customer
❖ Distributed software foundations
❖ Charity / Investment Vehicle
❖ Autonomous public service
❖ Crowd Jury

26. Yes, it’s all happening

27. PayPal for Bitcoin: Coinbase
❖ One of the most popular wallet/ exchange
❖ Serving 31,000+ merchants
❖ $30m+ funding form A16Z, Union square, YCombinator, etc.
❖ Daily volume $20m +++

28. Derivative: ICBIT

29. Ethereum
❖ Turing complete scripting language
❖ Contract, storage and fuel (Ether)
❖ Financial contracts, Decentralized Autonomous
Organization, Voting, etc.Vitalik

30. Decentralizing Internet:
MaidSafe
http://maidsafe.net
AWS Distributed
Raised $6mil in 5hours

31. Most exciting crypto startup ever
❖ Traditional: Angel - VC - IPO
❖ Koinify: IPO on Day 1
❖ Coin Products:
❖ Game, Apps
❖ Financial assets
❖ Celebrity / Personal Coins

32. What’s Success for Koinify
❖ US Annual Tax income: $3.3 trillion
❖ Crowdfund HyperLoop - $7 billion
❖ Government projects modularized - medical research,
space projects, even university

33. Life: powered by blockchain
Birth StartupFinance for College IPO WillLawsuit
Powered by Blockchain
Bye

34. Recap – 3 layers of innovation
Money as a service: Bitcoin & Altcoins
Permission-less innovation
Social contracts: Ethereum

35. –Steve Jobs
“Life can be much broader once you discover
…Everything around you that you call life was
made up by people that were no smarter than you
and you can change it, …”

36. Quiz / Open discussion
❖ Most exciting crypto use case for you
❖ Implications for a world with abundant currencies

37. Questions?
Email: tom@koinify.com
Twitter: @tom_ding
WeChat: tomding1987
Koinify is hiring!
www.koinify.com
CTO, Founding Engineer
#full-stack #distributed
#cryptography #security
We Pay cash, equity & Koins!

38. Thought Experiment 2
If X never invented, given X and Y, would Y be a no brainer?
Appendix: Evaluating Disruptive
Technology
Often disguised as cheaper but inferior, or better but too expensive
Thought Experiment 1
Assuming 100% adoption,, would it be a better world?
Thought Experiment 3: What if it becomes 100x cheaper, AND 100x faster?

39. Appendix: Bitcoin price
❖ Miners selling bitcoin
❖ Merchant cash out
❖ Tax
❖ Stronger regulation /
Decreased liquidity
❖ User adoption growth
❖ Hoarding
❖ Fiat currency inflation /
Economy conditions worsen
❖ Cross-border remittance
❖ Institutional involvement

40. Appendix: Further Resources
❖ Bitcoin-Dev Mailing List
❖ JayWSalon BitCoin SIG
❖ Sillicon Valley Bitcoin Meetup : Every Tue @ Plug n Play
❖ Stanford Bitcoin Meetup (Palo Alto)
❖ Ethereum Meetup
❖ SV Counterparty Meetup (In progress)