1. ENTER THE MATRIX:
THE WORLD OF BITCOIN,
CRYPTOCURRENCY, AND BLOCKCHAIN
BY MAX WHEELOCK
2. WHAT WEâLL DISCUSS
⢠What it is
⢠How it began
⢠How it works
⢠How it will change the world
3. CREDENTIALS
⢠Been researching in this space for 7
months
⢠Been investing for 6 months
⢠Have made a return of 160% over that
period
⢠Have introduced into this space and
educated over 50 people
4. WHAT IS IT?
⢠Bitcoin â a peer-to-peer electronic cash
system
⢠Deflationary
⢠Finite amount
⢠Cryptocurrency â a virtual currency that
uses encryption to prevent âdouble
spendingâ
⢠Blockchain â a decentralized, trustless
ledger (list of transactions), on which only
additions can be made
⢠The ledger history can never be changed
⢠All computers on the blockchain have the
ledger
5. WHAT IS IT?
⢠A system that allows for the digital exchange of tangible
assets
6. HOW IT BEGAN
⢠Satoshi Nakamoto
⢠Bitcoinâs anonymous creator
⢠Believed to be a pseudonym
⢠Published bitcoinâs white
paper in 2009
⢠Dive Deeper? Yes/No
⢠1990s Cyberpunks
⢠Digicash, Bitgold and others
⢠First known experimentation with virtual
currency
⢠Could not figure out how to make it trustless
⢠Financial collapse of 2008
⢠Poor fiscal management by banks, investment
firms, and government
⢠The world had a need to get away from the
central authority of money
7. BLOCKCHAIN EXPLAINED
⢠The Yap Tribe
⢠All tribespeople know and keep track of every
transaction within their village
⢠They all know who owns what and how much
⢠Any time a transaction is made all the people in
the tribe are gathered and are told of the
transaction
⢠Subsequently, they all âupdateâ the database in
their head of who owns what
This giant stone is their
currency
9. HOW IT WORKS
⢠Hashing â takes input of any
size, performs an operation,
and returns an output of a
fixed size
⢠Common for password
storage
⢠This is how the blockchain is
able to securely encrypt
transactions
10. WHERE DOES IT COME FROM?
⢠Mining (mining rigs) â
computer processors
connected to the blockchain
that validate transactions by
solving complex
cryptographic hashing
algorithms
⢠Coins are given as rewards
to the machine/person that
solves the algorithm
12. WHAT GIVES IT VALUE?
⢠It is worth what people will pay for it
⢠Supply and Demand
⢠What gives our dollars value?
13. FIAT VS CYRPTOCURRENCY
Fiat (USD, Euro, GBP) Cryptocurrency (Bitcoin, Ethereum, IOTA)
⢠Controlled by banks and governments
⢠Created by governments
⢠Inflationary
⢠Infinite supply
⢠Can be created at any time
⢠Open M â F, 9 to 5
⢠Controlled by the people that use it
⢠Created by solving math algorithms
(mined)
⢠Deflationary
⢠Finite supply
⢠Set amount released every year
⢠Open 24/7/365
14. IS IT SAFE?
⢠Blockchain is unhackable
⢠Altering the ledger would require 51%
ownership/takeover of the network
⢠Personal
⢠Hashing and cryptography hide
password input
⢠Private keys are 64 characters long
⢠XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXX
⢠Danger still lies in 3rd party
exchanges holding your wallet
Typical Database Security = 1
central point for hackers to focus
on
Blockchain Secutiry = millions of
points, hacker would have to
simultaneously hack every
computer
15. HOW IS IT TAXED
⢠IRS Notice 2014-21
⢠https://www.irs.gov/irb/2014-16_IRB#NOT-2014-21
⢠Has yet to make a formal statement on 1031 exchange
16. HOW IT WILL CHANGE THE WORLD
⢠People are in control of their money
⢠Electronic trading of tangible assets
⢠real estate
⢠vehicles
⢠Instantly and extremely cheaply send money abroad
⢠Avg transaction fee (Ethereum) = $1.10
⢠Avg transaction fee (Western Union) = 9-10%
⢠Avg transaction fee (Visa) = 3%
⢠Give access of the global financial market to the nearly 2 billion people who
do not/cannot get bank accounts
⢠Prevent fraud
⢠Voting
⢠Banking
17. IS IT TOO LATE TO INVEST?
⢠According to a study
by Cambridge
Center for
Alternative Finance
in May 2017
approximately 3
million people own
cryptocurrency