The document provides an overview of cryptocurrencies including bitcoin. It defines cryptocurrency as a digital currency that uses cryptography for security rather than being issued by a central authority. It discusses how transactions work using a public ledger of addresses and digital signatures on a blockchain, how new blocks are added to the chain through mining, and some examples of alternative cryptocurrencies like Litecoin and Dogecoin.
2. Who am I?
• Miguel Duarte
• Robotics & AI PhD Student @ ISCTE-IUL
• Geek, Hacker, Maker
• Sci-fi, Tech and Robotics enthusiast
• IEEE, NodecopterLX, GDG, IT
4. What is a cryptocurrency?
Digital currency that uses cryptography for
security. Cryptocurrencies are generally
anonymous and not issued by any central
authority.
5. Why does it matter?
• Transactions are irreversible, fast, and have low
fees
• Universal (within the internet)
• Decentralised, no trust necessary
• The supply of coins is regulated by software and
the agreement of users of the system and cannot
be manipulated by any government, bank,
organization or individual
11. Addresses
• 27-34 alphanumeric characters
• Generated via public-key cryptography
• Any user can generate multiple addresses
31uEbMgunupShBVTewXjtqbBv5MndwfXhb
22. Blocks
Alice -> Bob (20)
Alice -> Celso (10)
…
Bob -> Marley (33)
!
Previous Block Hash
Current Block Hash
23. Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (20)
hash_block99
…
hash_block100
…
The public ledger contains transactions, not balances.
block 100
24. Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (50)
hash_block99
…
hash_block100
…
block 100
25. Block chain
Alice -> Bob (5)
Alice -> Celso (10)
…
Bob -> Marley (33)
……
hash_block100
…
hash_block101
Bob -> Alice (50)
hash_block99
…
hash_block100
…
block 100
28. Mining
• Mining is the process of adding blocks to the block
chain, thereby confirming a set of transactions
• It uses a proof-of-work algorithm
• The text of the block + a nonce are hashed
using SHA256
• A block is considered valid when the resulting
hash starts with a certain number of 0s
30. The difficulty (number of zeros) varies depending
on the hashrate of the network, which
approximates the block time to 10 minutes
31. Mining
• Miners that generate valid blocks are rewarded
• The rewards halves every 4 years (geometric
progression) — current reward is 25 BTC
• Max number of BTC: 21 million
• After 2033, rewards will be based on transaction
fees
32. Mining
• CPU (< 0.04GH/s)
• GPU (< 1GH/s)
• FPGA (< 1GH/s)
• ASIC (< 1,000GH/s)
• Pool mining
1 G = 1,000,000,000
(1 billion)
39. Litecoin
• One of the first Bitcoin forks (2011)
• Introduced the scrypt proof-of-
work algorithm
• Block time: 2.5 minutes, limited to
21 million LTC like BTC
• Currently #2 cryptocurrency
40. Dogecoin
• A fork of Litecoin
• Made as a joke, features the famous
Doge meme with the friendly Shiba Inu
• No coin limit (100 billion until 2014 + 5
billion per year afterwards)
• much fast (1 minute block time)
• Amazing community that loves to tip and
fund charities (/r/dogecoin)