BITCOINCLARE JOHNSON

WHAT IS BITCOIN?

“A digital currency in which transactions can be performed without the need for a central bank”

• It is the first implementation of a concept called Cryptocurrency • It is the first decentralised peer-to-peer payment network• Specification and proof of concept first published by Satoshi

Nakamoto in 2009

KEY FEATURES OF BITCOIN

• Nobody controls the Bitcoin network• It has a decentralised structure• Anyone can view the software used to create Bitcoin• ‘Cash for the Internet’

BITCOIN STATISTICS

• Maximum number of Bitcoins is 21 million• Currently just under 15

million in circulation

No of Bitcoins0

5

10

15

20

25

Number currently in circulationTotal coins available

HOW DOES BITCOIN WORK?

• The Bitcoin network shares a public ledger or book of accounts called the blockchain• The ledger contains every transaction ever processed, allowing a

user's device to verify the validity of each transaction• The authenticity of each transaction is protected by digital

signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses

HOW DO I USE IT?

• Download an app to your computer or mobile device called a digital wallet• The wallet uses software to generate Bitcoin addresses• Acquire Bitcoins – either by buying them or by selling something for Bitcoins• Each address in your wallet has its own Bitcoin balance• To pay for something with Bitcoins you will need the Bitcoin address for the

sale• The transactions takes place within seconds, but verification can take 10

minutes or so

WHAT INFORMATION IS REQUIRED FOR A TRANSACTION?If Alice sends some bitcoins to Bob, that transaction will need the following information:• An input: this is a record of which bitcoin address was used to send the

bitcoins to Alice in the first place (she received them from her friend, Eve).• An amount: this is the amount of bitcoins that Alice is sending to Bob.• An output: this is Bob's bitcoin address• The Blockchain – this is used to verify all transactions

THE BLOCKCHAIN

• The blockchain contains all previous transactions• Alice makes a payment to Bob• Bitcoin miners look at the payment and calculate a mathematical function based

on the last transaction stored on the blockchain and the next pending transaction• The miner to solve the function first adds the transaction and result to the

blockchain• The miner gets paid in Bitcoins for her efforts• The transaction is verified

RESOURCES

• https://youtu.be/ZT26y_l-jtI (Video explaining bitcoin basics, Mashable)• https://www.weusecoins.com/ (Video explaining bitcoins, WeUseCoins.com)• https://bitcoin.org/en/faq#who-created-bitcoin (Bitcoin FAQ, Bitcoin.org)• https://www.bitcoinmining.com/ (Video explaining bitcoin mining,

Bitcoinmining.com)• https://youtu.be/l9jOJk30eQs (Block chain explained video, CuriousInventor)• https://blockchain.info/charts/total-bitcoins (Bitcoins in circulation,

Blockchain.info)