These are the slides from my May 2011 Talk at KPMG Zurich for "Netzzunft.ch".

1. What is Bitcoin?
A look at the world’s
first cryptocurrency.
Stefan Thomas • WeUseCoins.com

3. physical money

4. (direct transfer) physical money

5. “peer-to-peer” physical money

6. online

7. online

8. online

9. online

10. intermediary

11. intermediary
middle man

12. intermediary
cost
middle man =

13. intermediary
cost
middle man = risk

14. intermediary
cost
middle man = risk
no choices

15. intermediary
middle man = problem

16. intermediary

17. distributed intermediaries

18. distributed intermediaries
cost?

19. distributed intermediaries
cost?

20. distributed intermediaries
cost?

21. distributed intermediaries
cost?

22. distributed intermediaries
cost

23. distributed intermediaries
cost
risk?

24. distributed intermediaries
cost
risk?

25. distributed intermediaries
cost
risk?

26. distributed intermediaries
cost
risk

27. distributed intermediaries
cost
risk
choices?

28. distributed intermediaries
cost
risk
choices

29. semi-distributed intermediaries
(current situation)

30. distributed intermediaries
is it possible?

31. step 1: Decentralizing identity.

32. 1976
Solved.
Sincerely,
Ralph Merkle Martin Hellman Whitfield Diffie

33. 1976
Solved. (with digital signatures)
Sincerely,
Ralph Merkle Martin Hellman Whitfield Diffie

34. step 2: Decentralizing accounting.

35. step 2: Decentralizing accounting.

36. step 2: Decentralizing accounting.

37. step 2: Decentralizing accounting.

38. step 2: Decentralizing accounting.

39. step 2: Decentralizing accounting.

40. step 2: Decentralizing accounting.

41. step 3: Decentralizing truth.

42. step 3: Decentralizing truth.

43. A B
step 3: Decentralizing truth.

44. B B B
B
B
A B B
step 3: Decentralizing truth.
Voting?

45. B B B
B
B
A A A AA
A A A AA
A
A A
A B B
AAA A A AA A A
A
A AA A A A A
A A A A AA A
A A A A A
step 3: Decentralizing truth.
Voting? Problem: Fake nodes!

46. B B B
B
B
A B B
step 3: Decentralizing truth.
Bitcoin’s most important idea:

47. B B B
B
B
A B B
step 3: Decentralizing truth.
Bitcoin’s most important idea:
“1 CPU, 1 Vote”

48. so... how much would it take?

49. hashing power

50. hashing power
Disclaimer: FLOPS ≠ FLOPS

51. hashing power

52. hashing power
as of 24/5/2011
3500 Ghash/s
three-day window estimate

53. hashing power
as of 24/5/2011
3500 Ghash/s
three-day window estimate

54. hashing power
as of 24/5/2011
3500 Ghash/s
three-day window estimate

55. hashing power
as of 24/5/2011
3500 Ghash/s = 29.05 PFLOPS
three-day window estimate

56. hashing power
as of 24/5/2011
29.05
all values are
in PFLOPS
4.7 5.14
Sources:
bitcoin.sipa.be/speed-lin.png
fah-web.stanford.edu
Tianhe-1A Folding@home Bitcoin jcst.ict.ac.cn

57. hashing power

58. hashing power
A realistic view of hashing attacks against Bitcoin.

59. hashing power
A realistic view of hashing attacks against Bitcoin.
Capital: ~ 8000 Radeon 5870 GPUs

60. hashing power
A realistic view of hashing attacks against Bitcoin.
Capital: ~ 8000 * 250$

61. hashing power
A realistic view of hashing attacks against Bitcoin.
Capital: ~ 2 000 000$

62. hashing power
A realistic view of hashing attacks against Bitcoin.
Capital: ~ 2 000 000$
Power: ~ 220W * 8000

63. hashing power
A realistic view of hashing attacks against Bitcoin.
Capital: ~ 2 000 000$
Power: ~ 1.76 MW
Benefit: Stopping transactions/Double spends

64. step 4: Decentralizing issuance.

65. step 4: Decentralizing issuance.
Who gets to spend new coins?

66. step 4: Decentralizing issuance.
M F
M ... Money awarded
F ... Work provided

67. money supply
21 million max.
15 mil.
10 mil.
5 mil.

68. money supply
Currently:
6.28 mio

70. identity
accounting
decentralized truth
issuance

71. decentralized currency

72. economy

73. economy

74. economy
Source:
BitcoinCharts.com

75. economy
Excerpt:
Design & Webhosting
Source:
https://en.bitcoin.it/wiki/Trade

76. economy
Source:
https://en.bitcoin.it/wiki/Bitcoin_Map
http://www.weusecoins.com/globe-bitcoin/

77. economy
Existing Services
• Escrow, e.g. ClearCoin
• Online Wallet, e.g. Instawallet.org
• Trial Service, e.g. Bitcoin Faucet
• Wallet Backup, e.g. Wuala
• Press, e.g. Bitcoin Sun
• Mining Pools, e.g. Deepbit
Many more in the works...

78. identity
accounting
decentralized truth
issuance

79. applications
DDNS
Notarization
Other Currencies
Deeds
Web-of-trust
eVoting
DPKI

80. applications
Great Thing: Shared Work

81. thanks! for listening

82. questions?