< Assets Wallet, Transaction, Blockchain, Transaction-chain
<> Wallet: Paired Public Address and Private Key
Public Address Private Key
5KRTGZmZHVMuzpJ99GjNfCoNeUYUum8kwXoVrx9pA21JSbySvPT
> Similar to Mailbox -- Public Address for mail, Private Key to open.
>> Wallet has QR (Quick Response) codes as above. Sweeping the Private Key
(computer with app reading QR code) transfers value to another Wallet -- with
Transaction on the Blockchain
> Difference from Mailbox -- Mailbox has fixed location, Wallet does not.
>> Wallet can be accessed by anyone (from anywhere with Internet access) that has or
can see the Private Key. (More below on secure password protected Private Keys)
<> Transaction: Transfers Ownership of Value --
From Owner of Wallet A to Owner of Wallet B
> Wallets A and B (and not their Owners) are recorded on
>> Blockchain worldwide public ledger
> Blockchain (for Cryptocurrency) is similar to RTGS (for Fiat Currency)
>> RTGS is for settlements between Banks (e.g. Fedwire in U.S., Other RTGS per country)
>> Both Blockchain and RTGS provide one-way, irreversible Settlements
=> Wallet is similar to a Bank vs Bank Account
<> Blockchain: Public Ledger of Cryptocurrency
Transactions and Settlements:
Invented by Satoshi Nakamoto -- With Questions, History, Structure
> Questions: Who is Satoshi Nakamoto?
What is Peer-to-peer Electronic Cash (aka Bitcoin Cryptocurrency)?
What is a Block?
How are Blocks Chained together?
How is a Cryptocurrency (aka new Money) created via Mining?
How do you store, buy, spend new Money?
> History: Began in 2009 with Block 0 (Genesis Block)
>> Today over half million Blocks -- with a new Block every ~10 minutes
>>> Term "Mining" derives from Gold Mining -- for a scarce resource with
more difficulty and less mined over time
>>> Block Capacity is ~4,000 Transactions or ~4000T/~600 seconds = ~7 Tps
>> Miners are security service that validate Transactions and confirm Blocks
using computers as tools, and not picks and shovels
>>> Good Blocks are confirmed by Miners on main Blockchain (See *Hash)
>>> Bad Blocks get blacklisted (aka orphaned) with no confirmations or rewards
>>> Contentious Blocks can split (aka fork) to new Blockchain with new coin values
>> Miners are rewarded for work with new Money (See **Coinbase and ***Nonce)
>>> Miners can share resources and rewards as part of a Mining Pool
*Hash links Blocks and provides strong Cryptographic Security --
Every coin in a confirmed Block links back (via Hash) to confirmed mined coin(s)
**Coinbase is the 1st Transaction in each Block that contains the "new Money" =
Mining Reward = New BTC's + Transaction Validation Fees
***Nonce is a variable changed by Miners to solve a math problem.
First Miner (or Mining Pool) to solve gets Block Mining Reward
> Structure and Sustainability Intangible Value resulted in regulation as:
"money" (by FinCen), "property" (by IRS) and "commodity" (by CFTC):
Block P__ ____________
|_Header Data ___| HEADER
|_***Nonce ____| ______________
| **Coinbase | BODY
| Transactions |
| . . . |
|______ ___ _| ______________
|_Trailer Data____|
| Block P-1 *Hash | TRAILER
|_Block P *Hash__|_______________
<> Block Mining Rewards
> Block 0: Was created in 2009-01-03 with 1st (Coinbase) Transaction to
Inventor's Wallet -- 50 BTC Block Mining Reward (x ~$5K = ~$250K Unspent)
> Block Mining Reward Halving Modeled after Gold Mining Difficulty and occurs
every ~4 years (every 210K Blocks):
=> 50 BTC in 2009-01, 25 BTC in 2012-11, 12.5 BTC in 2016, 6.25 BTC in 2020, . . .
> Block P Today is # 57n,nnn with 12.5 BTC Block Mining Reward (x ~$5K = ~$65K)
to total ~17.6M mined BTC (x ~$5K = ~$90B)
> Last Block Mining Reward will be in year 2140 = 0.00000001 BTC = 1 Sat = $?
with total ~21M mined BTC (x ~$5K = ~$105B)
and if 1 Sat = $0.01, then 1 BTC = $1M
> Blocks Continue after year 2140 with Reward = Transaction Validation Fees,
and no new BTC's
<> Coin Valuations
> First Valuation: In 2010 for two pizzas for 10,000 BTC (x ~$5K = ~$50M)
x
> Historical Values: 2009: Initially No Value -- "Crypto Dust"
2010: $0.003 (if two pizzas cost $30)
2011: Parity with $1
2012: Halving of Mining Reward to 25 BTC
2013: Value near $100 -- Cyprus Bank bailout
2016: Halving of Mining Reward to 12.5 BTC
2017-03: Parity with Gold $1,200
2017-08: BTC at ~$2,700 forks to Bitcoin Cash (BCH) at ~$310
2017-12: Highest so far near $20,000
2019: Today near $5,000
> Future Values: 2020: Halving of Mining Reward to 6.25 BTC
202?: Parity with Dow Jones (DJIA)?
20??: Parity with Berkshire Hathaway (BRK/A)?
<> Chains: Past, Present and Future
> 4 Generations of Cryptocurrency Settlements (in Past 10 years):
Public, Worldwide Coins w Market Value
>> 1G-Bitcoin (BTC): Blockchain, Electronic Cash: ~10 min Blocks, ~7 Tps
>> 2G-Ethereum (ETH): Programmable Blockchain, Smart Contracts: ~15 sec Blocks,~15 Tps
>> 3G-Cardano (ADA): Scalable Blockchain (w Epoch # & Slot #), Smart Contracts+, Treasury
>> 4G-IOTA (MIOTA): Scalable Transaction-chain (w Transaction #), Block-less, Fee-less IOT
> Next Blockchain Apps:
Private, Regional Coins w Fixed Values, or Status Tracking
>> Fixed Values: Pegged To Fiat (USD, EUR, ...)
>>> Overview: StableCoins
>>> Chase: JP Morgan Coin (JPMCoin)
>>> Coinify: National Cryptocurrencies
>> Status Tracking: Of Property, Food Quality, ...
>>> Use Cases: Blockchain for Private Application
>>> IBM: Blockchain for Goods & Services
>>> MIT: Blockchain for Business
>>> U.S. Congress: Blockonomi Taxonomy
> Future: 4G Transaction-chains and 5G Wireless Telecom
>> No Miners: Validation is part of Transaction process
>> No Fees: Similar to (free) web browsing with http or https
>> No Bottlenecks: Technology is scalable for growth
>> Internet Of Things (IOT): Transactions between Things with Identity (ID)
>> IOT Transaction: Transfers Data from ID A to ID B
>>> Data: Value, Status, Quality, . . ., at Time T and Location X
>>> ID: Wallet, Phone, Car VIN, Device Serial #, . . .
>>> Transaction Examples:
Wallet A Owner transfers Value to Wallet B Owner (Similar to BTC, ...)
Food with Quality (Q1) at T1 X1 arrives with Q2 at T2, X2 (for each process step)
>> Tech Example: IOTA with Directed Acyclic Graph (DAG)
>>> Work In Progress: IOTA Roadmap
>> 5G-Enabled IOT: Will it be capacity limited Blockchain + 5G Telecom,
Or scalable Transaction-chain + 5G Telecom?
<> More On Wallets and Secure Private Keys
> Be Advised: Whoever has Private Key has access to the BTC
> Public Address -- with Private Key -- not Password Protected
1DaFwV5vM6Hsed6va2dHWRFDZgLQ71TfiQ
> Public Address -- with Secure Private Key -- Password Protected (BIP38)
1N4yP8M4yhpcKHWKrEboZ2zrjCPQGTFBeq
> Another Wallet -- with Secure Private Key -- Password Protected
>> Request to: jmwnuk@icloud.com with subject "pooky" gets the Password.
