Bitcoin EconomyThe raise of the crypto coins

pancake @ NN2k13

What is bitcoin?Peer to peer currencyPowered by cryptographyProfitability decreases in timeSecure by computing powerValue defined by market

Interesting for...EconomyP2P networksCryptographyHacking

What is 1 bitcoin?That's a bit difficult to explain...

In short~100€

In long...

BlockchainRecords all transactionsGroups transactions in blocksCryptographically chainedStored by all clientsLightweight clients relay on server

The Genesis BlockFirst block was hand-crafted

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

Rewards 50 unspendable btc

http://blockexplorer.com

WalletThe bitcoin address is the public key.

Private key used to sign transactionsUnlimited free addressesNo tx concept... use address aliasesvanitygen

TransactionsCreated by any clientSigned with source address priv keyMultiple destination addressesNeed to be verified ~6 timesVerification times depend on feeCant be revokedUser defined fee

MinersEnforce the blockchain creating blocks

Group some random transactions(even invalid)Bruteforce a seed to get a small hashDifficulty depends on network powerReward for solved block (25btc + fee)

PoolsMiners cant solve blocks fast enough tobe profitable

Join forces and reward sharesProof of work with lower difficultyPPS/PPLS/Prop/DGM/..

HardwareJS/JAVA (~1 MH/s)CPU (~6 MH/s)GPU (~60 MH/s)FPGA (less power consumption)ASIC (600 GH/s)

Other currenciesBitcoin is based on SHA256 and ECDSA

Known as ALT coinsSeveral forks appearImplement new core rulesMost use SCRYPT to avoid ASICs

LitecoinCompared to silverUses SCRYPT instead of SHA256Faster verifications2x more coinsDifficulty redefined block~$3

NamecoinDNS serverTransfers to register domainsUses .bit41.2 mBTC

FreicoinDemurrageAlways profitablePromotes quick spendsSHA2560.2601 mBTC

Terracoin,Zerocoin, PPCoin,Novacoin,Zetacoin, ...http://www.coinchoose.com

Fix 51% attack (proof of stake)Less power consumption (ppcoin)More coins (feathercoin)Unlimited coins (Novacoin)Faster transactions (terracoin)Enhance anonymity (zerocoin)Mixed transactions (anoncoin)

AnonymityEvery transaction is publicMost trading sites require personal IDMany addresses can be tracked downfrom web/tw/fb/mail signatures.Not designed to be anonymous

GatewaysThere are payment gateways thatsellers can use to accept bitcoins aspayment and receive euro/dollar inchange without any extra effort.

or you may also want to trade..

TradingMany sites allow to trade betweencrypto-currencies, and also with realcash like euros or dollars.

https://bitstamp.nethttps://vircurex.comhttps://mtgox.comhttps://btc-e.com

SecurityWith enough power transactionvalidations can take forever.

See BBQCoin..

AlertsBroadcasted messages signed bySatoshi, Gavin, or Theymos.

Notify about network problems orsecurity vulnerabilitiesPut client in safe mode (isolate node)

CrackingBruteforce private keys!

Well, there are ...~2̂256 (secp256k1) =

115,792, 089,237, 316,195, 423,570,985,008, 687,907, 852,837, 564,279,074,904, 382,605, 163,141, 518,161,494,337 private keys...

Android to therescue!openssl bug was reducing entropysource which caused predictable keys

NetworkSupports TORTransactions are verified by all nodesDoS happened and got fixed quickly

RainbowsImpossible to cache all combinations

prevhash (32 bytes)tx counter (1-9 bytes)timestamp (4 byte)seed (4 byte)N random transactions

HackingLite clients and bitcoin banks have beenshown to be weak.

Many btc banks or pools got hackedSniffing weak client communicationsDoS manipulates the mining powerSCAM (social engineering?)Trojans/Games/Webs with miners

HandjobBitcoinToolsVanityGenBrainWalletJSON-RPC on bitcoind

Real useTradingGamblingDonationsBuying stuffLaundry (ID required)Bypass VISA censorship

FutureATMsCredit CardsMore clientsMore gatewaysMake it legal

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Any questions?