1.
CRYPTOCURRENCIES
A DEEP DIVE
OWASP KHARTOUM

2.
BIO
- Khaled Farah.
- Volunteer at Owasp Khartoum .
- GM, Co-Founder at SEMICOLON ICT. semicolon-ict.com
twitter : @_khaledfarah

3.
#BITCOIN
#BLOCKCHAIN
#ETHEREUM
#DECENTRILAZED
#PUBLIC_KEY
#PRIVATE_KEY
#WALLET
#POW
#UNSPENT_TRANSACTION
#MINING
#ICO
Keywords

4.
FUN PART
‫تمهيد‬

5.
Money Value
• Controlled issuing.
• Adoption.
• Utility.
What gives bank notes value ?
• The price of the USD is calculated purely on supply and
demand.
• Dollars - or SDGs - in your pocket may lose all value one
day.

6.
Cryptocurrencies != Bitcoin
1380+ coins as of January 2018

7.
BITCOIN - History
• Founded in 2009
• Unknown founder “Satoshi Nakamoto”
• Guy named Koch bought 5,000 bitcoins in 2009 for
$27.
• Another guy paid 10,000 bitcoins for a pizza.
• Today, one Bitcoin is equal to 7500-8000$.
• Many alt-coins followed bitcoin.

8.
What makes bitcoin special
• It’s not Bitcoin, It’s what’s behind it.
• Blockchain
• What makes bitcoin special.
• Limited “21 Million”.
• Decentralised
• Secure
• Availability
• Integrity
• Confidentiality
• Low transaction fees. *
• Instant. *

9.
Bitcoin in Sudan
• We have a bitcoin community in Sudan.https://web.facebook.com/groups/
794021010648172/
• Softwex accepts bitcoin as a payment method. https://
www.softwex.com

10.
SCIENCE PART

11.
How does bitcoin work?
• What is bitcoin ?
• How is stored?
• Why is it secure?
• Where is it stored ?
• What is a wallet ?

12.
How does bitcoin work?

13.
PKI encryption

14.
PKI encryption
Confidentiality

15.
PKI encryption
Integrity

16.
Private key generation
The size of bitcoin's private key space,(2^256^) is an
unfathomably large number. It is approximately 10^77^
in decimal. For comparison, the visible universe is
estimated to contain 10^80^ atoms.

17.
Public Key Cryptography and Cryptocurrency
It’s not about encryption, it’s about signing. “integrity”
Elliptic curve multiplication

18.
Blockchain
In simple words
• A ledger.
• Write and read only “No edit”.
• Series of blocks.
• Each block contains a list of verified transactions.
• Miners compete to add the next block to the
blockchain.
• Only one wins

19.
Blockchain
In simple words
• “People” encrypting data and sending it to the pool
“Private key”.
• “People” taking this data and verifying it “public key”
• “People” claiming ownership after the data is verified
“Private key”.

20.
Storing bitcoins
- You don’t store bitcoin.
- You claim ownership of an address of unspent transaction.

21.
Bitcoin transaction
Transactions has two parts
• Input
• Address “Unspent transaction”
• Output
• Receiver address
• Your address “remainder”
Input - Output = Transaction fees

22.
Bitcoin transaction
- A transaction tells the network that the owner of some bitcoin
value has authorised the transfer of that value to another
owner.
- The new owner can now spend the bitcoin by creating another
transaction that authorises transfer to another owner, and so
on, in a chain of ownership.

23.
Mining
• Transaction verifiers.
• Compete for the chance of adding the next
“Block” in the blockchain.
• Rewarded two ways :
• Transaction fees.
• Mining fees.
• Protocols : Proof of work (Bitcoin) , Proof of
stake “Ethereum”

24.
Proof of work
• Multiple nodes compete. Only one winner ( next block ).
• Verify each transaction.
• Difficulty is adjustable.
• One block every 10 mins.
• Mekle root.

25.
Wallet
• Different types of wallets
• Pairs of keys
• Deterministic wallets
• Can be a hardware wallet, mobile app or a desktop app.
• Keyword here is “Private key” storing

26.
FUN PART AGAIN
‫حقائق‬

27.
Bitcoin price
• Difference between price and value?
• Price depends on supply and demand => volatile.
• Value depends on adoption & utility.

28.
Quick stats
- Ethereum – 20 transactions per second
- Visa – 1,667 transaction per second
- PayPal – 193 transactions per second average
- 7 transactions/second.
- 1 block per 10 mins.
- 1 Megabytes block.
- 12 Bitcoins is the miner reward per block.
Bitcoin
Other currencies

29.
How to scale bitcoin?
• Increase block size ? Including more transactions per block.
• Minimise transaction size?

30.
New trends
• Bitcoin is a store currency. “Gold”
• Other currencies are spend currencies

31.
Bitcoin issues “Not cryptocurrencies”
• Slow transaction verification “Promised to
be solved using lightening networks”.
• High transaction fees “miners”.
• Untraceable transactions. “Regulations”

32.
Reading topics
• Initial coin offering.
• Lightning network
• Smart contracts

33.
Final remarks
• Value depends on adoption & utility.
• Blockchain potential is much bigger than bitcoin
“Currencies”.
• Many applications can be decentralised.

34.
Resources
• Bitcoin official website: https://bitcoin.org/en/
• Mastering bitcoin: https://github.com/bitcoinbook/bitcoinbook
• Podcast: https://explainblockchain.io/
• Twitter Thread: https://twitter.com/Sudan_Voices (khatab Elbadawi)

35.
THANK YOU