Download - Evolving Your Dollars - A Journey to Bitcoin

A JOURNEY TO BITCOIN

EvolvingYourDollars

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Paper Dollars in Leather Wallets CORE IDEA

Individual Responsibility

CHALLENGE

Insecure User Counterfeiting

SOLUTION

Secure in Bank Bank Auditing

Next: Digital Dollars in Locked Bank Accounts

Digital Dollars in Locked Bank Accounts

CORE IDEA

Centralized Trust in 3rd Party Account Number (ID/Deposits) Account Password (Spending)

CHALLENGE

Bank Counterfeiting No External Auditing

SOLUTION

Transparent Accounts

Next: Digital Dollars in Transparent Locked Bank Accounts

Digital Dollars in Transparent Locked Bank Accounts

CORE IDEA

Unlimited Auditing by Anyone

CHALLENGE

Lack of User Privacy SOLUTION

Anonymize Accounts

Next: Digital Dollars in Anonymized Bank Accounts

VIS

Anonymity USER IDENTIFIED ACCOUNT ANONYMOUS ACCOUNT

John Doe265-33-74542-15-76833-23-4432Rockstr76L!fEroCKs5549

NameSSNDOB

Acct #User ID

Password

PIN

833-23-4432L!fEroCKs

Acct #Passw

ord

Digital Dollars in Anonymized Bank Accounts

CORE IDEA

Bank Does Not Know Who Owns Accounts Password Security & Management CHALLENGE

Account Metaphor• Privacy Risk if Acct #

Discovered• Payee Can Discover One’s

Balance• Limits Financial Management

SOLUTION

Key Metaphor• Lock Individual Units• Unlimited Keys• Use Few or Many

Next: Transparent Locked Dollar Sequence in Bank

Transparent Locked Dollar Sequence in Bank

CORE IDEA

Public Key (ID/Deposits) ID’s One or Many Units, Free to Create Private Key (Spending/Proof of Value) Unique to Each Public Key Transaction - Using A Private Key to Reassign A Unit’s New Public Key Wallet – Software or Hardware Used to Manage Public and Private Keys

CHALLENGE

Transparency Only In the Moment

SOLUTION

Record New Unit Keys Without Deleting Previous

Next: Transparent Locked Dollar Sequence w/ History in Bank

VIS

Keys PUBLIC KEY

1H7vmqxqA785FFH3H1FL8JH1bTi5xPDqVv PRIVATE KEY

5HpHagT65TZzG1PH3CSu63k8DbpvD8s5ip4nEB3kEsreAnchuDf

Transp. Locked D.Dollar Seq. w/ History in Bank

CORE IDEA

Transparent Ledger of Record Audits Through Time Each Line is a Transaction Record Value, Date, Previous Key, Current Key

CHALLENGE

Open to Revision by Bank Open to Challenge by Users

SOLUTION

Make Subsequent Transaction Records Dependent on Previous Ones

Next: Digital Dollars in Locked Bank Accounts

Transparent Ledger of Locked Digital Dollars w/ Transactions Chained Together in Bank

CORE IDEA

Block – Collection of Transactions from a Period of Time Validation – Each Block Proves Validity of Previous Block Block Chain – Ledger of Blocks Whose Security Increases with Time Hashing – Creation of Cryptographic Dependency Links

CHALLENGE

Bank is Single Point of Failure

SOLUTION

Duplicate the Block Chain into Limitless Copies

Next: Transparent Secure Block Chain Stored on Any User's Computer

VIS

Numerical Dependency DOMINOES HASHING

0 to 6 0 to

9999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999

Transparent Secure Block Chain Stored on Any User's Computer

CORE IDEA

Distributed Network – Peer to Peer Distributed Trust & Verification Units Controlled by Banks are Dollars Units Controlled by Users are Bitcoins CHALLENGE

Who Will Collect Transactions Create & Validate Blocks?

SOLUTION

Blocks Collected and Linked by Any Volunteer (Miner)

Next: Block Chain Stored By All & Extended by Competing Miners

VIS

Network Arrangements CENTRALIZED DECENTRALIZED DISTRIBUTED

Block Chain Stored By All & Extended by Competing Miners

CORE IDEA

Anyone Can Be a Miner Miners Compete to Solve Blocks Miners Confirm Validity of Solved Blocks Miners Who Solve Blocks First are Rewarded with Bitcoins Miners Prioritize Transactions Based on Voluntary Fees Hash Difficulty is Adjusted So a Block is Solved Every 10 Minutes

Bitcoin is A Distributed Network Crypto Currency

Core Idea Bitcoin Can Cost Nothing to Use Bitcoin Transactions are Transparent and Permanent Each User’s Self Interest Adds Security to the Network Participation Can be Mostly Anonymous The Bitcoin Network Belongs to No One and Everyone Bitcoin Has No State, Cultural, or Language Boundaries

That’s the Evolution from Dollars to Bitcoin!

The Distributed Block Chain is a World Changing Concept

Core Idea A Shared Indelible Record, Secured and Witnessed by Millions

Possible Applications Accounting Auditing Autonomous Entities Budgeting Business Structures Contracts

Copyright Insurance Records Lease Agreements Micro Transactions Prenuptial Agreements Promises

Reviews Service Ratings Speech Records Stock Ownership Warrantees Last Wills

Produced [email protected] August 7, 2014