A comprehensive guide to teaching Crypto Curious Course
This guide will give you a rundown on the basics of cryptocurrency and blockchain with the aim of getting you comfortable with cryptocurrencies and blockchain technology. Before going over the specifics you will take a look at the context in which Bitcoin was launched into the world.
This course is 2-3 hours long. Breaks may be helpful for discussion, but the content has been disnged to hold questions until the end.
You are free to:
Copy and redistributed the material in any medium or format
Remix, transform, and build upon the material for any purpose
Examine the mechanics behind a cryptocurrency transaction
Know where to look when something goes wrong
Explain how cryptocurrency is different than cash
Understand how blockchain technology may impact YOU!
2008-2009 Global Financial Crisis
The Problem Bitcoin Solves
Investment Bank Collapse
Subprime Mortgage Crisis
Banks Declared “Too Big to Fail”
Digital Uniqueness without Banks
Blockchain are ledgers that track transactions in a decentralized way
Anyone can make a database that maintains uniqueness
Digital uniqueness is easy for one computer to enforce
Maintaining transactional state across a network is much harder
Transactions can reprepresent the transmission of money, goods, or data
All transactions are time stamped, ordered, and cannot be altered (immutable)
Avoids repeat entries
Creates a digital fingerprint
The History of Cryptocurrency
The Web and Digital Currency
Cash for the Internet
Digital Currency Experiments
1998: PayPal Launched
The Central Server
The Decentralized Network
Digital currency that is created and secured through a “mining process” that uses cryptograph. “Small b” bitcoin is the unit of account for the Bitcoin network
Technological backbone that allows cryptocurrencies to function. The “Big B” Bitcoin network is an example of blockchain technology in action
“b”itcoin vs “B”itcoin
“b”itcoin, the cryptocurrency token changes ownership on the “B”itcoin network—which uses blockchain technology
The Values Behind Blockchain
Resilient to infrastructure problems, intentional or accidental
Transactions cannot easily be stopped from reaching the network
Triple-entry accounting means proving a cryptographic receipt
Malicious server administrator can't make changes
Trusting Trustless Transactions
Transactions can be made even in the absence of trust
You want trust, but can't always be with each other in person
Internet transactions lack trust that you are used to when dealing in person, instead relying on consumer protection laws to mitigate risk
Bitcoin As Money
Most Money is Already Digital
The Functions of Money
Store of Value
Medium of Exchange
Unit of Accounts
Bitcoin Pizza Day
Early Bitcoin Use
Bitcoin Pizza Day
May 22, 2010 by Laszlo Hanycz
10,000 BTC for 2 pizzas
First recorded use of bitcoin to purchase a good
The Transaction Process
It's All Virtual
Broadcasting the Transaction
Mempool: Before Mining
Inclusion in a Block
Do you need to be online?
Inside a Mini-Miner
How the Network Makes a Decision
The purpose of this activity is to show how decentralized networks made up of competing miners reach network consensus.
In this scenario, we are going to slow down the mining race between two miners. Each miner has a copy of Charlie’s transaction for the block they are going to compile. Whichever miner that wins the race has included Charlie’s transaction in the block they are creating. No matter which miner wins, Charlie’s transaction gets included in the blockchain. The transactions compiled by non-winning miners are sent back to the mempool until they are added into a block by another miner.
Who determines which transactions get added to the block?
What happens if my transaction does not get mined?
What happens to Charlie's transaction if it is not immediately included in a block?
Which Transactions are Included?
The Block Joins the Chain
Consider cost of maintanance and management
More cost effective to buy Bitcoin directly than converting electricity
Where Do Fees Go?
Token Creation Cycle
Exchange Tokens for Resources
Transaction Fees Generated
Bitcoin Issuance Schedule
Maintains block production around 10 minutes
Adjusts every 2048 blocks (approximately 2 weeks)
Original rewards was 50 BTC
Has halved three times
Current reward is 6.25 BTC
Reward is reduced every 210,000 blocks (approximately 4 years)
Blockchains Beyond Bitcoin
Easy things to change
Hard things to change
Other notable networks
More Than Money
What is a Smart Contract?
First Smart contracts were on Bitcoin
Form of crowdfunding
Advanced multi-signature transactions
Decentralized Finance (DeFi)
Loan & savings
What is block time?
Bitcoin introduced 10 minute block times, a huge improvement from 3 day bank transfers
Blockchain innovation has pushed block times down to seconds
Why Blockchains Aren't Free
Limited-use resource that costs money to transact
This reduces spam, otherwise blockchains would become overrun like email
Freedom of speech
Credit Cards vs. Cryptocurrency
“Push” versus “Pull”
Data storage security
Keeping Crypto Secure
Transparency or Privacy?
Details are often public (i.e. to prevent double-spending)
Addresses are pseudo-anonymous
Possible to make lots of addresses cheaply
No gatekeeper or tangible cost to do so
Projects exploring different methods of obfuscation
Address Reuse and Privacy
What Are Cryptocurrency Wallets?
Public and Private Keys
Custodial vs. Non-custodial Wallets
Restoring Your Wallet
Types of Cryptocurrency Wallets
Different wallets support different tokens
Different wallets function differently
Hot Wallet (“spending”)
Cold Wallet (“savings”)
Inspecting a Transaction
What Happened to My Transaction?
Stuck in mempool?
Insufficient fee or gas?
Check for your transaction ID on a public block explorer
How Blockchains May Differ
The amount of time it takes for miners to solve that math problem and compile valid transactions into a block. Different blockchains have different block times.
Certain cryptocurrencies limit the amount of data that is publicly visible in order to ensure the maximum possible level of privacy.
Each community is different, and are motivated by different values.
Blockchains require lots of computation, so a variety of consensus algorithms, state tracking, and hashing algorithms may be used.
How Blockchains Are Secured
51% Attack: Controlling A Network
Possible to buy computing power (AWS, Azure, etc.)
Controlling majority hash power could allow re-writing of historical chain data
Important to ensure diversity of network participants while maintaining incentive alignment
What You Can Do With Cryptocurrency
Companies Accepting Crypto
Overstock (General merchandise)
Expedia (Hotel bookings)
Microsoft (Microsoft Store credit)
Virgin Galactic (Space flight)
CheapAir (Airline bookings)
NewEgg (Technology equipment)
Money Without Borders
Future Vision and Blockchain Use Cases
Blockchain and Business
Smart contracts have the possibility to revolutionize how business is done over the internet
May lead to innovation in a variety of industries:
Certifications and Credentials
Blockchains are not Perfect
Blockchain require transparency
Some information must be shared
Different types of Privacy
Scaling for Global Usage
Expensive due to inefficiency
Network bandwidth & disk space are finite resources
Current technology cannot support global population of 8 billion
Transaction backlogs and high fees would result
What do you do when things go wrong?
Are you too dependent on the technology?
Is this data useful/needed forever?
Not User-Friendly Enough
But Still Worth Using!
Resiliency against fragile internet infrastructure
Defend our freedoms to transact value directly
Cryptography as digital armor
Bringing Decentralized Technology to our internet
Removing intermediaries means you can transact more directly
Gives creators more options on how to generate revenue
Decentralizing the web could lead to better capacity allocation
The introduction of digital uniqueness may give rise to control over our personal data
Re-assert the internet as a playground for everyone
Not only large corporations
Protect from state attacks
Storing Cryptocurrency Securely
Hands-on Crypto Experience
Understand how a blockchain transaction works
Define cryptocurrency and how it's different than traditional money