Bitcoins The Practical Side

Judy Katzman JKatzman@infsoftware.com

NYC Code Camp Saturday September 13, 2014

1

Welcome to Bitcoin ●  Why is Bitcoin important?

●  Create an online bitcoin wallet

●  How to obtain bitcoins

●  Merchant services

●  Introduction to the block chain

2

Why Bitcoin? ●  Brings together global economy

●  Transactions times in minutes, not days

●  Fundraising - no currency transaction fees

●  No minimum deposits required (as compared to checking accounts)

●  Governments cannot confiscate savings - Cyprus

3

What Is A Bitcoin?

New digital currency No banks

Minimal fees Not tied to any country No personal information

No credit card processors

4

Fun Facts About Bitcoins ●  Created in 2008 by Satoshi Nakamoto ●  Bitcoin is also the name of the protocol used to create bitcoins. ●  Bitcoin is based on an algorithm which is solved approximately every

10 minutes, no matter how many miners and CPU power is used. The algorithm difficulty increases exponentially over time

●  Every 4 years, the number of bitcoins created is halved ●  The maximum number of bitcoins is fixed at 21 million, which will be

reached by 2140 ●  Created by the interaction of cryptography and distributed systems:

5

What Is A Wallet? ●  Place to store bitcoins

●  Allows transfer of bitcoin between people and/or businesses

●  Two basic options:

○  cell phone ○  on-line

6

Types of Bitcoin Wallets ●  web-wallet - online - trusting a third party to store bitcoins (like a

bank) ●  application (phone,computer, tablet, etc...)

●  cold storage - This is more like a safety deposit box than a saving

account - not used as often DO DUE DILIGENCE

7

Create a Bitcoin Wallet ●  https://blockchain.info/

8

Create a Bitcoin Wallet ●  https://blockchain.info/

9

New Bitcoin Wallet ●  https://blockchain.info/

10

Blockchain.info

11

Methods of Obtaining Bitcoin Bitcoin ATM machin

Mining

Old Fashion Way - Earn It

Conversion

12

What Am I Going To Do With My Bitcoins

●  https://www.bitpremier.com ●  http://coinmap.org/

13

Merchant Services ●  Online stores that accept bitcoin as payment

●  Local merchants

14

What is the Blockchain?

15

Blockchain Sample Cindy gave Scott .1 BTC and this block was created: https://blockchain.info/address/1Cdid9KFAaatwczBwBttQcwXYCpvK8h7FK

16

Blockchain Sample Scott bought coffee for .015 BTC: https://blockchain.info/address/1GdK9UzpHBzqzX2A9JFP3Di4weBwqgmoQA

17

Bitcoin Keys Cell Phone

Application Private Key

Blockchain

5aa6c862-bb47-45b7-89ac-49bdd69653f4 key

Keys are mathematically related

Bitcoin address can be calculated from the private key

private key cannot be calculated from blockchain

The key calculations are often taken care of by the “third party” wallet vendors 18

Going Forward? ●  New industry ●  US Government has declared bitcoin a “commodity”, not currency ●  New York is contemplating regulations for exchanges ●  Great potential for people who cannot afford banking ●  Replacing wire transfers, money orders or money grams ●  Other uses for bitcoin protocol

19

Resources ●  blockchain.info ●  https://bitcoin.org/en/ ●  https://bitcoinfoundation.org/ ●  http://howtobuybitcoins.info/us.html ●  http://letstalkbitcoin.com/ ●  http://www.reddit.com/r/CryptoCurrency/ ●  http://www.cryptocoinsnews.com/ ●  http://staging.spectrum.ieee.org/img/06Bitcoin-1338412974774.jpg - How a Bitcoins transaction works

●  Mastering Bitcoin -Unlocking Digital Crypt-Currencies by Andreas Antonopoulous

Contact Infoformation: Judy Katzman JKatzman@infsoftware.com

20