8lLcoln 101

LllzabeLh Lasher
CcLober 2013
v0.6 updaLed 2 nov 2013
1oplcs
WhaL ls blLcoln and whaL makes lL dlerenL?
Pow do l geL a blLcoln? WhaL ls lL worLh?
Where can l keep my blLcolns?
Pow can l use my blLcolns?
Where do blLcolns come from?
Pow does blLcoln work?
WhaL are Lhe challenges Lo blLcoln becomlng more wldespread?
ulspelllng some of Lhe blLcoln myLhs
8efore l geL blLcolns, whaL ls Lhe mosL lmporLanL Lhlng l should know?
!"#$%&'()*
use Lhe hyperllnks Lo sklp Lo a
Loplc.
8eLurn Lo Lhe maln page by cllcklng
Lhe ln Lhe Lop le of each sllde
WhaL ls blLcoln? WhaL makes lL dlerenL?
8lLcoln (81C) ls a currency, [usL as Lhe uS dollar, Lhe !apanese yen and Lhe 8rlush
pound are currencles
unllke Lhose currencles, 81C has some unlque characLerlsucs LhaL make lL
speclal:
uecenLrallzed
1here ls no cenLral auLhorlLy, such as Lhe lederal 8eserve, LhaL manages Lhe currency, lLs
value ls solely deLermlned by markeL demand
Advocacy groups llke Lhe 8lLcoln loundauon may have lnuence, buL no one can
unllaLerally change Lhe characLerlsucs of blLcoln
LlmlLed ln quanuLy
lL ls oen llkened Lo gold ln LhaL Lhe currency ls released lnLo Lhe world (mlned) ln a
sLeady, ever decreaslng raLe
1ransferable
Sendlng 81C Lo anyone else ls lnsLanLaneous, pracucally free and does noL requlre Lrusung
a Lhlrd parLy (such as a bank). unllke credlL cards, 81C Lransacuons cannoL be dlspuLed
and reversed by a Lhlrd parLy
Clobal
1here are no naLural geographlcal or pollucal boundarles
Pow do l geL a blLcoln? WhaL ls lL worLh?
1here are a number of exchanges where oLher currencles can be Lraded for 81C, you
can also buy blLcolns Lhrough apps llke Colnbase
As of 29 CcLober 2013, 14:30 LasLern 1lme 81C ls valued aL:
8lLcolns are dlvlslble Lo 8 declmal places. So lf l wanL Lo send someone 0.01 81C, l
am sendlng Lhem Lhe equlvalenL of abouL $2 uSu Loday (0.01*$201=$2.01)
WlLhln Lhe unlLed SLaLes, Lhe way 81C wlll be Laxed or regulaLed ls sull Lo be
deLermlned. Powever, lL ls llkely, lndlvlduals wlLh 81C wlll be sub[ecL Lo caplLal galns
Laxes when Lhose 81C are exchanged Lo Lhe dollar. 81C are LreaLed as lnvesLmenLs
raLher Lhan lncome (unless you are gemng pald ln 81C) - galns are Laxable and losses
are applled Lo Laxable lncome
,-##$(%. /0, 12! 3/4 5-#' 6$(
value 1 201 133 133 20,300
Lxchange 8lLSLamp ML Cox ML Cox ML Cox
More
Who or whaL seLs Lhe prlce of blLcoln?
1he prlce of 81C ls deLermlned ln a markeLplace, [usL llke Lhe SLock MarkeL.
1he markeLplace provldes a place for people Lo buy and sell 81C
1he followlng screenshoL ls from blLcolnlLy.org, a slLe LhaL Lracks exchanges
1hls
secuon
deplcLs
Lhe value
of 81C
over ume
(2 years)
1hls value
reecLs Lhe
lasL 81C
purchase
prlce
1hese values
reecL
recenL 81C
purchase
prlces
1hls secuon deplcLs Lhe bld (green) / ask (red) curve. 8lds are whaL people
are wllllng Lo pay for 81C, asks are whaL people are wllllng Lo accepL for 81C
More
Who or whaL seLs Lhe prlce of blLcoln?
1he blds (green) are people wlLh dollars who wanL blLcoln. 1he asks (red) are people wlLh blLcoln who wanL
dollars. Lveryone wanLs a good deal, so buyers wlll bld low and askers wlll ask hlgh. And Lhe furLher away you geL
from Lhe currenL prlce ln elLher dlrecuon, Lhe more buyers or sellers you wlll nd
1hls creaLes Lhe spread, whlch ls Lhe dlerence beLween Lhe hlghesL bld and Lhe lowesL ask. lor example, Lhe
hlghesL bldder may wanL Lo spend $200 / blLcoln buL Lhe lowesL asker won'L Lake anyLhlng less Lhan $210
1he order book ls a llsL of Lhe currenL blds and asks. 1hroughouL Lhe day, blds and asks are accepLed by sellers
and buyers, and deals are made. ln Lhe graph below, Lhls acuon ls deplcLed where Lhe bld /ask curves meeL
1he prlce of 81C changes when a deal ls made because Lhe prevlous bld or ask oers are removed from Lhe order
book, leavlng behlnd Lhe less generous blds or asks. When an ask ls accepLed, Lhe prlce goes up. When a bld ls
accepLed Lhe prlce goes down. Lveryone oers a prlce, as well as a quanuLy (e.g., 20 81C oered aL $203 / 81C).
1he blgger Lhe deal, Lhe more Lhe prlce of 81C wlll move:
Accepung an ask: lf l wanL Lo buy 100 81C, Lhe lowesL ask ls $200 / 81C. 8uL Lhls seller only has 20 81C. l buy Lhem, and Lhen
move onLo Lhe nexL lowesL seller who ls selllng 30 81C for $201 / 81C. l keep movlng Lhrough Lhe order book unul l have my
100 81C - and Lhe rsL 81C l buy ends up belng cheaper Lhan Lhe lasL 81C l buy
Accepung a bld: lf l wanL Lo sell 100 81C, l look for a buyer who ls wllllng Lo pay Lhe hlghesL prlce. Pe ls only wllllng Lo pay
$201 / 81C for 30 81C. l sell Lhem, Lhen move on Lo a second buyer who ls only wllllng Lo pay $200 / 81C, eLc
Lvery ume l make a deal, l change Lhe prlce of 81C. ?ou can observe Lhls ln Lhe markeL as Lhe value of 81C shls
up and down. Llke Lhe SLock MarkeL, Lhe 81C markeLplace wlll go up and down LhroughouL Lhe day. unllke Lhe
SLock MarkeL, 81C markeLplaces Lend Lo be open 24/7
Where Lhe acuon ls
Ask curve 8ld curve
Where can l keep my blLcolns?
81C are kepL ln walleLs. eople can have more Lhan one walleL ln
whlch Lhey keep Lhelr 81C
Lach walleL has one or more addresses wlLh assoclaLed keys. l can
send 81C Lo an address ln someone's walleL lf Lhey glve me Lhelr
(publlc) address. Powever, no one can Lake money from Lhls walleL
address unless Lhey have my (prlvaLe) key
More
1ypes of walleLs
1here are Lwo Lypes of walleLs, PoL and Cold, and Lhere are pros
and cons Lo each Lype
PoL walleLs have keys LhaL have been exposed Lhe lnLerneL. 1hey
lnclude:
Soware, such as deskLop or moblle apps, LhaL connecL Lo Lhe lnLerneL
Cnllne 81C managemenL webslLes such as 8lockchaln.lnfo
Cold walleLs have keys LhaL have never been exposed Lo Lhe
lnLerneL. 1hey lnclude:
aper walleLs LhaL can be prlnLed from your compuLer
Soware LhaL ls downloaded, and ls never opened when you are
connecLed Lo Lhe lnLerneL
More
Chooslng a walleL: pros / cons / examples
More
7899$: :.;$ 7899$: )-<:.;$ 4#') ,'() 5=8>;9$)?
PoL
Cnllne managemenL
ConvenlenL access
8ecoverable
1rusung vendor and
Lhelr securlLy
8lockchaln.lnfo
Colnbase
Soware & apps
(ueskLop or Moblle)
More prlvacy
More secure
Plgher llkellhood of
loslng walleL les
Armory
8lLcoln-C1
LlecLrum
Mulu-8lL
Cold
aper
MosL secure
1anglble
Can be mlsplaced
Can be physlcally
sLolen
8lLaddress.org
Self-generaLed
uownloaded soware
LncrypLed backups
Low rlsk of Lhe
8lLcolns noL readlly
avallable
Armory
*LlsL noL exhausuve
Why have muluple addresses ln your walleL?
When you wanL Lo send some of your 81C Lo a dlerenL address, Lechnlcally
speaklng, Lhe blLcoln program sends all 81C from your address before your change ls
reLurned
?ou can equaLe Lhls Lo glvlng $20 Lo a parklng garage auendanL Lo pay your $13
parklng Lab, and recelvlng $3 ln change
8esL pracuce enLalls LhaL you use a new address for Lhls change (Lhls ls called a
change address) because lL ls sllghLly more secure. ln oLher words, addresses should
only send blLcolns once (Lhey can recelve as many Lransacuons as you wanL)
81C managemenL soware (everyLhlng buL paper walleLs) handles Lhese deLalls
auLomaucally, hence glvlng each user hundreds of addresses ln your walleL. 1he
caveaL ls Lo choose your soware wlsely or you mlghL noL end up gemng your change
@AA#$)) B
CrlglnaLor
0.3 81C
A few more blLs and bobs Lo know
More
@AA#$)) C
8ecelver
0.3 81C
@AA#$)) D
Change
0.2 81C
A few more blLs and bobs Lo know
WhaL ls a passphrase, aka, a seed?
WalleL keys and addresses are really [usL very long numbers. ln facL, Lhe number of an
address can be derlved from lLs key
Slmllarly, a passphrase, or seed, ls a phrase LhaL you can memorlze and use Lo derlve your
walleL key lf forgouen
1echnlcally speaklng, muluple passphrases can derlve Lhe same key. And muluple keys can
derlve Lhe address. robablllsucally Lhls wlll noL happen so you can conslder lL a 1:1:1
relauonshlp
More
assphrase key Address
092432hv2
dva023323
1obeornouob
eLhausLhe?
supercallfragal
lsucexp
123b32b02n caveaLempLor
Chooslng a passphrase allows you Lo
sLore your walleL ln your memory raLher
Lhan ever wrlung lL down, Lhls ls known
as a braln walleL
SuggesLed guldellnes:
unlque and long
Symbols, numbers, caplLallzauon and
spaces are greaL - buL only lf you can
remember Lhem!
Cne meLhod could be Lo wrlLe ouL /
comblne 12 unlque and unrelaLed words
lor example: !"#$%!&%$$'(#)'$*+",-.%*,./,*0&"#.#11,10'2!-#%$&,#3"&'$,!444
A few more blLs and bobs Lo know
Pow fasL do Lransacuons happen? Can l make lL fasLer?
1he blLcoln program ls essenually one blg ledger LhaL has loLs of people (mlners) whose
role ls Lo slgn o on your Lransacuons as leglumaLe, and add Lhem Lo Lhe omclal copy of
Lhe ledger (lor more Lechnlcal deLall, see Pow does blLcoln work?)
Mlners are mouvaLed Lo mlne because Lhey are pald ln 81C
aylng a small opuonal fee (ex: .0001 81C ls preuy sLandard Lhese days) ensures your
Lransacuons wlll be prlorluzed and conrmed ln a umely manner
WhaL ls a dlglLal slgnaLure?
Slmply puL, a dlglLal slgnaLure ls a way of provlng you have Lhe key for an address, wlLhouL
sharlng your key, l.e. provlng Lo Lhe person you are Lrylng Lo send 81C LhaL you own and
can spend Lhe 81C LhaL you say you have
81C soware auLomaucally does Lhls for you
0E8(F)G
BH /0,
IHHHB /0,
Pow can l use my blLcolns?
81C can be used ln a number of places:
Cnllne vendors, such as Wordress, 1he8lLcolnSLore, 8lLMlL and Colnglg
A growlng number of brlck and morLar sLores, such as laneL Llnux Cafe ln
Mlaml, lL and 1helonlous Monksh ln Cambrldge, MA
Companles LhaL oer compensauon ln 81C, such as Colnbase and 8lLay
lnvesung ln blLcoln sLarLups Lhrough companles, such as Pavelock lnvesLmenLs
Lxchanglng Lhem for oLher currencles
C8 codes are oen used as a way Lo sLore addresses and keys. 1hls
makes uslng moblle apps for 81C managemenL very useful for spendlng
C8 for Lhls
paper walleL's
address
C8 for Lhls
paper walleL's
key
Where do blLcolns come from?
1he blLcoln program was wrluen by an anonymous programmer, or group of
programmers, known as SaLoshl nakamoLo. Pls orlglnal 2008 whlLe paper can
be found aL hup://blLcoln.org/blLcoln.pdf
1he codebase for Lhls soware ls open source, meanlng LhaL people can and
have revlewed Lhe code Lo ensure lL does noL conLaln malware or back doors
volunLeers updaLe Lhe blLcoln program on a regular basls, Lhese updaLes are
veued and adopLed by Lhe wlder communlLy
8lLcoln ls a crypLocurrency, meanlng:
lL ls a dlglLal currency, noL unllke Lhe uS dollar (even Lhough we have physlcal dollars ln our
walleLs, over 93 of dollars are sLored on hard drlves ln banks)
lL uses crypLography Lo ellmlnaLe Lhe rlsk of counLerfelung, removlng Lhe posslblllLy LhaL
someone can spend Lhe same colns Lwlce (double spend)
More
Where do blLcolns come from?
8lLcoln ls decenLrallzed, meanlng:
- lL uullzes a peer Lo peer neLwork over Lhe lnLerneL (known as Lhe whlsper neLwork)
lnsLead of a cenLral auLhorlLy such as Lhe lederal 8eserve
- lndlvlduals on Lhls peer Lo peer neLwork, known as mlners, run Lhe blLcoln program and
conLrlbuLe Lhelr compuLer processlng power Lo solve very compllcaLed maLh equauons
(proof of work)
Why solve Lhese compllcaLed maLh equauons?
- 81C are released aL a raLe whlch halves every four years. ln 2140, all 81C wlll have been
mlned and Lhere wlll be 21 mllllon 81C LoLal
- Solvlng Lhe maLh equauons releases blLcolns. 1hls ls akln Lo mlnlng gold: Lhe more eorL
mlners puL Lowards lL, Lhe more llkely Lhey are Lo nd gold. ln Lhls scenarlo, Lhe gold ls
called a blLcoln 'block'
- Mlners are mouvaLed Lo conLrlbuLe processlng power Lo solve Lhe maLh equauons because
Lhey are rewarded wlLh blocks. 1hls same process ls also used Lo conrm Lransacuons,
from whlch mlners are pald Lransacuon fees
Pow does blLcoln work?
A core Lechnlcal concepL behlnd blLcoln ls Lhe block chaln:
AL lLs essence, Lhe block chaln ls one very large ledger LhaL records all Lransacuons,
lncludlng Lhe release of new blLcoln blocks Lo mlners
1he blockchaln ls publlcally vlewable
8ecause Lhe blLcoln program runs over Lhe whlsper neLwork, mlners download a local copy
of lL onLo Lhelr compuLers
When a mlner nds a block and conrms a group of pendlng Lransacuons, Lhe program
sends Lhls work (Lhe solved maLh equauon) Lo be double checked by oLher mlners. ln
oLher words, Lhls block becomes a checkpolnL ln Lhe ledger
lf a ma[orlLy of Lhe oLher mlners (30) agree Lhe work ls correcL, Lhls new verslon of Lhe
block chaln becomes Lhe omclal verslon of Lhe block chaln
More
Pow does blLcoln work?
1he maLh equauons LhaL are solved are relaLed Lo Lhe crypLography used for walleL keys
and address
1hey boLh uses hashlng algorlLhms LhaL obfuscaLe Lhe Lhlng you are Lrylng Lo hlde
lor example, every address ls hldden ln a near lnnlLe sea of addresses. 1heoreucally, a
compuLer could nd LhaL address uslng bruLe force (golng Lhrough every posslble address) buL lL
would Lake hundreds of bllllons of years
Searchlng for a slngle address represenLs Lhe hlghesL dlmculLy ln Lhe hashlng algorlLhm,
l.e. lL's essenually lmposslble. ?our walleL keys and address wlll noL be cracked Lhls way
8uL lf you can search for an address LhaL fullls a cerLaln crlLerla, your odds of ndlng such
an address are much hlgher
lor example, searchlng for addresses LhaL sLarL wlLh Lhe numbers 123. llndlng any slngle address
LhaL sLarLs wlLh 123 would be a success (an average deskLop C can do Lhls ln abouL 1 second)
ln order Lo malnLaln a sLeady raLe of blLcoln creauon, Lhe blLcoln program regularly ad[usLs
Lhe dlmculLy semng of Lhe maLh equauons for mlners Lo accounL for new mlners and
beuer equlpmenL
Lven Lhough mlnlng and walleL keys and addresses boLh use Lhe same cyropLographlc
prlnclple Lo operaLe, Lhey are oLherwlse unrelaLed.
lor example, anyone who wanLs Lo send or recelve 81C does noL need Lo have knowledge of nor
a relauonshlp wlLh mlnlng Lo use Lhem
More
Pow does blLcoln work?
1he hashlng algorlLhms used ln Lhe blLcoln program were selecLed by SaLoshl nakamoLo,
and are used Lo for encrypuon of addresses and keys. 1hey lnclude:
SPA236
8lLMu
LCuSA
1he hardware LhaL mlners use Lo conLrlbuLe processlng power has become more and
more sophlsucaLed and expenslve
ASlC chlps are Lhe currenL sLandard and are speclcally deslgned Lo hash SPA236. eople
can buy Lhese unlLs, or Lhey can buy a share ln Lhe hardware Lhrough companles such as
CloudPashlng.com
Mlnlng equlpmenL ls expenslve and energy lnLenslve, so pracucally speaklng, mlners musL
alm Lo earn more 81C from whaL Lhey mlne Lhan whaL Lhey spend ln hardware and
elecLrlclLy
More
Pow does blLcoln work?
1echnlcally (noL eLhlcally) speaklng, why should we pay mlners Lransacuons fees?
lf Lwo mlners lndependenLly nd a block wlLhln a few seconds of each oLher, Lhey compeLe
Lo propagaLe Lhelr verslon of Lhe block chaln before Lhe oLher
LvenLually Lhe neLwork as a whole wlll recognlze one of Lhe Lwo blocks, whlch wlll Lhen go
lnLo Lhe omclal verslon of Lhe blockchaln. ln Lhe meanwhlle Lhe oLher block becomes
orphaned and re[ecLed by Lhe neLwork
1he more Lransacuons a mlner conrms ln Lhelr block, Lhe slower Lhe propagauon speed.
8ecause mlners Lake unconrmed Lransacuons from a pool, Lhey musL welgh how many
Lransacuons Lhey wanL Lo conrm so Lhey can geL fees wlLh how fasL Lhey Lhlnk someone
else wlll nd a block
Mlners can seL parameLers ln Lhelr soware Lo only conrm Lransacuons LhaL are above a
cerLaln fee Lhreshold. 1hls allows Lhem Lo propagaLe blLcoln blocks fasLer, ouLpaclng oLher
compeuLors who nd a block around Lhe same ume
WhaL are Lhe challenges Lo blLcoln becomlng more
wldespread?
8egulaLory
1he quesuon of how Lhe governmenL wlll LreaL 81C perslsLs, parucularly from a Lax as well
as anu-money launderlng (AML) perspecuve
Many people ln Lhe blLcoln communlLy feel very posluve LhaL Lhe uS governmenL ls now
recognlzlng, explorlng and lssulng regulaLory clarlcauons around 81C
lrom a Lax perspecuve, when 81C ls exchanged Lo uSu, lndlvlduals are sub[ecL Lo caplLal galns Lax
lrom an AML perspecuve, and because blLcoln ls decenLrallzed, Lxchanges are now LreaLed as
money servlce provlders and musL meeL AML regulauons wlLh regards Lo k?C/Cuu (know ?our
CusLomer, CusLomer uue ulllgence), waLchllsL checklng for L (pollucally exposed persons) and
agalnsL Lhe ClAC llsL, eLc
undersLandablllLy
1he upLake of blLcoln sLarLed wlLh very Lechnlcally lncllned lndlvlduals, and conunues Lo
have mosLly Lechnlcal paruclpanLs
1ranslauons of Lhese Lechnlcal concepLs for a lay audlence ls crlucal Lo wldenlng Lhe user
base of Lhe currency, parucularly explalnlng how Lo keep users' money secure
Many buslnesses are Laklng on Lhls challenge
Cne of my personal measures for wheLher blLcoln ls a success:
6#$ 7 ,2"1#%$ &'- *' 8!, 9%*0'%$ *' :+ :'*&,.;
More
WhaL are Lhe challenges Lo blLcoln becomlng more
wldespread?
8epuLauon
1he same beneLs LhaL blLcoln can brlng Lo Lhe world have also noL gone unnouced by Lhe
crlmlnal underworld
Crganlzed crlme ls oen much fasLer Lo adapL Lo opporLunlues as Lhey musL be shrewd Lo
sLay proLable and avold law enforcemenL Lacucs
8ecause of Lhe assoclauon beLween blLcoln and crlme, many lndlvlduals assoclaLe blLcoln
wlLh companles such as Sllk 8oad
Powever, Lhe recenL shuLdown of Sllk 8oad and evldence LhaL lLs demlse dld noL lmpacL
81C valuauons, conLrlbuLes Lo Lhe decoupllng of Lhe blLcoln world belng synonymous wlLh
crlme
ubllc awareness and messaglng around blLcoln wlll help Lo conunue Lhls Lrend as
buslnesses conunue Lo bulld and grow around 81C Lechnology
More
WhaL are Lhe challenges Lo blLcoln becomlng more
wldespread?
8uslnesses LhaL use 81C
Whlle Lhere are a number of buslnesses ln Lhe blLcoln domaln, Lhelr success, maLurauon
and accesslblllLy for consumers wlll have a ma[or lmpacL on Lhe fuLure successes of blLcoln
/-)"($)) 0.;$ J-(%&'( 5=8>;9$)?
Advocacy groups rovlde lnformauon and resources abouL 81C 8lLcoln loundauon
8anks Lscrow servlces, loans, sLorage, eLc for 81C !"#$ &'()$
Cold sLorage SecurlLy ln 81C wealLh sLorage 81CClobal
ConsulLancles LxperL professlonal and Lechnlcal advlce around 81C 81CLxperLs
Lxchanges Converslon Lo / from oLher currencles 8lLSLamp, 81C-L,Colnbase
lnformauonal charung vlews on Lhe 81C sLock markeL 8lLcolncharLs.org
lnvesLmenL managed funds Managed muLual funds around 81C buslnesses !"#$ &'()$
lnvesLmenL LrusL rovlde 81C llquldlLy Lo accredlLed lnvesLors SecondMarkeL
MarkeLplaces urchaslng / selllng goods ln 81C 8lLMlL, ColnClg, 1he8lLcolnSLore
Mlnlng LqulpmenL roduce mlnlng hardware AslcMlner, Avalon, knC
Mlxers rlvacy around Lransacuon hlsLory and esumauons of worLh 8lLcolnlog, 8lockchaln.lnfo
Cnllne caslnos Cambllng ln 81C SaLoshlulce
non proLs Mlsslon based blLcoln accepLors Sean's CuLposL
aymenL processors Companles LhaL faclllLaLe 81C paymenLs for merchanLs 8lLpay, Colnbase
ubllshers 81C news Colndesk, Cenesls8lock
Securlues llrms 8uylng / selllng blLcoln company sLock Pavelock lnvesLmenLs
WalleL Soware Soware Lo manage 81C walleLs 8lockchaln.lnfo, LlecLrum
*LlsL noL exhausuve
ulspelllng some of Lhe blLcoln myLhs
8lLcoln ls a onzl scheme
onzl schemes are fraudulenL lnvesLmenL programs where old lnvesLors are pald o by new
lnvesLor money. 1hey are fundamenLally unsusLalnable because evenLually Lhere are noL
enough new lnvesLors
81C ls noL an lnvesLmenL program, lL ls a currency. 1here are no promlses around reLurns,
and no parLy Lo make Lhose promlses because Lhere ls no cenLral 81C company or auLhorlLy
lncreases ln 81C value are susLalnable even once Lhe lasL adopLer [olns Lhe group, l.e. lL
does noL rely on new lnvesLors or adopLers Lo supporL lLs worLh because Lhe worLh ls
deLermlned by lLs usefulness as a sLore of value and a means of exchange
1here are rlsks assoclaLed wlLh holdlng 81C, buL Lhey are noL Lhe same rlsks assumed by
Lhose paruclpaung ln a onzl scheme
8lLcoln has been hacked
Whlle exchanges and companles have been hacked, Lhe blLcoln proLocol has never been
compromlsed. Packlng blLcoln exchanges can be equaLed Lo cyber auacks agalnsL 8CA and
! Morgan Chase
Anyone who could hack or compromlse Lhe blLcoln proLocol sLands Lo make a loL of money.
And as a resulL, many people have Lrled and conunue Lo Lry
now 3 years ln, blLcoln has proven reslllenL and ls lmproved on an ongolng basls Lo make
Lhe llkellhood of successful auacks even more remoLe
More
ulspelllng some of Lhe blLcoln myLhs
8lLcoln ls anonymous
An lndlvldual can have many many walleLs, each of whlch are essenually long numbers
LhaL are noL necessarlly ued Lo an lndlvldual's ldenuLy
Powever, wlLh AML regulauons now ln place ln many Lxchanges, more and more ldenuues
can be assoclaLed wlLh walleLs (dependlng on how much money ls belng exchanged)
Addluonally, because Lhe blockchaln ls publlc, Lransacuons beLween walleLs are vlslble Lo
Lhe world. 1herefore lL ls posslble Lo follow where 81C goes
AL Lhe same ume, an enure lndusLry (mlxers) ls belng bullL around hldlng Lransacuons by
essenually Lumbllng Lhese Lransacuons Lhrough a muluLude of addresses ln hopes of
obscurlng Lhelr orlglns
WhaL's Lo sLop oLher currencles from [usL copylng blLcoln?
noLhlng, Lhls has already happened wlLh alLernauve currencles such as llLecoln, namecoln
and feaLhercoln whlch use Lhe same fundamenLal properues, buL have addluonal feaLures
ln facL, oLher companles lssue alLernauve currencles LhaL oer fundamenLally dlerenL
properues, such as Lhe cenLrallzed currency from Amazon. l oen llken Lhls Lo my PllLon
Ponors or Amerlcan Alrllnes polnLs whose value (Lo book hoLels, or reserve lghLs) can be
changed aL Lhe wlll of a company
ln Lhe end, [usL as lacebook beaL ouL MySpace, Lhe success of 81C compared Lo oLher
currencles wlll be dependenL upon lLs adopuon
8efore l geL blLcolns, whaL ls Lhe mosL lmporLanL
Lhlng l should know?
81C are llke cash - lf you lose your walleL, lL's gone forever!
Powever, unllke cash, even a plcLure Laken of your paper walleL
means your 81C could be sLolen
1he mosL lmporLanL Lhlng you need Lo learn before gemng 81C
and all Lhe beneLs LhaL come wlLh, ls how noL Lo lose your 81C
uon'L posL Lhls
plcLure Lo
lacebook.
1he spend C8 lS
your key!
1hank you
*+&#,-. /0$&-$ -$#1 '"22$#3- "4 -566$-("#- 3"7
Llz Lasher
sallors[gmall.com
Speclal Lhanks Lo commenLs / suggesuons provlded vla reddlL aL:
hup://www.reddlL.com/r/8lLcoln/commenLs/1phdLc/
lm_seelng_a_loL_of_new_faces_around_here_welcome/