Damian Ward Vocalink / Mastercard / BITUG CRYPTO CURRENCIES #102 BRING ON THE ALTCOINS Cryptocurrencies beyond Bitcoin January 6, 2018 Altcoin, what's an Altcoin.? 2 Bitcoin is a cryptocurrency and worldwide payment  system released in 2009 Today Bitcoin is one of 1000’s of cryptocurrencies  Bitcoin represents around 35% (and falling) of the  cryptocurrency market Cryptocurrencies that are not Bitcoin are known as  Altcoins January 6, 2018 Bitcoin is grabbing headlines in 2017 3 January 6, 2018 10 years ago… 4 I was helping the  search for alien lifeforms. I should have been  mining Bitcoin January 6, 2018 Crypto Currencies 101 5 A cryptocurrency is a digital asset designed to work as  a medium of exchange. Bitcoin was the first decentralized cryptocurrency created in  2009 Cryptocurrency transactions are placed into blocks and  written to a distributed ledger, the Blockchain. The bitcoin (abbreviated BTC or XBT) is the unit that was used  in the original Bitcoin wallet software created by Satoshi Nakamoto. January 6, 2018 Crypto Currencies 101 6 Most cryptocurrencies, including bitcoin have 8 decimal  places. 1 BTC = 1.00000000, 0.00000001 is called a santoshi  Move towards ISO 4217 compliant codes. (XMR, XBT etc..)  The process of solving or committing a block of transactions  to the blockchain is called mining. bitcoin's proof of work mining does two things:  it ensures that the next block in a blockchain is the one and only  version of the truth, keeps attackers from derailing the system and successfully forking  the chain. January 6, 2018 What in mining 7 Change the block to find a SHA-256 hash value beginning with  '000’. Vary the string by adding an integer ‘nonce’ and incrementing.  Finding a match for "Hello, world!" takes us 4251 tries  "Hello, world!0" => 1312af178c253f84028d480a6adc1e25e81caa44c749ec81976192e2ec93 "Hello, world!1" => e9afc424b79e4f6ab42d99c81156d3a17228d6e1eef4139be78e948a9332 "Hello, world!2" => ae37343a357a8297591625e7134cbea22f5928be8ca2a32aa475cf05fd42 "Hello, world!4248" => 6e110d98b388e77e9c6f042ac6b497cec46660deef75a55ebc7cfdf65cc0 "Hello, world!4249" => c004190b822f1669cac8dc37e761cb73652e7832fb814565702245cf26eb "Hello, world!4250" => 0000c3af42fc31103f1fdc0151fa747ff87349a4714df7cc52ea464e12dc As difficulty increases the number of required zeros also increases.  In Bitcoin there should be a new block every 10 minutes.  It doesn't matter how the nonce changes, most of the time it's just  a number counting upwards from 0 January 6, 2018 Mining rewards 8 The reward is automatically adjusted so that, every  four years, half the amount of bitcoins created in the prior 4 years are created. A maximum of 10,499,889 bitcoins were created in the  first 4 (approx.) years from January 2009 to November 2012. Every four years thereafter this amount halves, so it  should be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. The total number of bitcoins can never exceed  20,999,839 January 6, 2018 Mining proof of work 9 In proof of work, miners compete to add the next  block (a set of transactions) in the chain by racing to solve a extremely difficult cryptographic puzzle. The first to solve the puzzle, wins the lottery. As a reward for his or her efforts, the miner  receives newly minted bitcoins – and a small transaction fee. The coin value of a block is 50 BTC for each of the  first 210,000 blocks, 25 BTC for the next 210,000 blocks, then 12.5 BTC, 6.25 BTC and so on. January 6, 2018 Mining hardware evolution 10 CPU Mining Early Bitcoin client versions allowed users to use their CPUs to mine.  The advent of GPU mining made CPU mining financially unviable.  The option was therefore removed from the core Bitcoin client's user  interface. GPU Mining GPU Mining is drastically faster and more efficient than CPU mining  Uses high performance graphics cards  ASIC Mining An application-specific integrated circuit, or ASIC, designed and manufactured  for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013.  For the amount of power they consume, they are vastly faster than all previos  technologies. January 6, 2018